An offer from oil pipeline owner Enbridge Energy to add Dane County as a named party to its $700 million insurance policy is nothing out of the ordinary, a company official says.
Enbridge — which is seeking a permit to add a pumping station near Marshall that will allow it to triple capacity of an existing line running from Superior to Illinois — on Tuesday said it would add the county for up to $100 million in coverage in the event of a spill.
Dane County, at the urging of environmental groups, has been trying to make something of a stand against Enbridge, the largest exporter of tar sands oil from western Canada. The granting of a conditional use permit has been delayed for months as the county weighs its legal options.
But the public offer to add Dane County to its general insurance policy is not a major concession, given the firm has done the same in the past with other local governments. It would only allow the county to seek direct reimbursement from the insurer in the event of an incident.
Enbridge spokeswoman Becky Haase was unable to provide a list of other communities with similar insurance agreements but said it was not unprecedented.
“Each municipality requires a different level of comfort,” said Haase. “Our goal is keeping our pipelines safe.”
Dane County’s Zoning & Land Regulation Committee is now weighing that offer and has again delayed a decision on issuing a conditional use permit to Enbridge. It will discuss the issue at its Feb. 10 meeting and try to determine how to pay for an outside consultant to assess the options.
“The discussion became pretty convoluted so we chose postponement to get some expertise to determine what the risk is and whether this is an appropriate level of coverage,” said committee chairman Patrick Miles, a county supervisor from McFarland.
Miles on Wednesday said he was not aware that Enbridge has made similar arrangements with other communities to add them to the insurance policy.
Enbridge’s Line 61 running through the town of Medina in the northeast corner of the county has become a lightning rod for those concerned about global climate change and the increasing use of heavy tar sands oil from North America.
A group called Madison 350 which is committed to reducing carbon levels in the atmosphere has been an outspoken critic of the line.
“We can’t stop the line but we can protect ourselves financially in the event of a disaster,” said longtime environmental activist Peter Anderson.
Anderson’s group is pushing for Dane County to demand a separate environmental impairment liability policy which Enbridge to date has not been willing to do.
“What they are proposing now is not going to fly,” he said.
The line has been operating without incident since opening in 2009, ferrying up to 400,000 barrels of oil per day to refineries in the Chicago area. But Enbridge wants to expand its capacity to 1.2 million barrels. And as new pumping stations have begun operations, the line has already upped production to more than 560,000 barrels.
By comparison, the highly controversial Keystone XL pipeline would carry 860,000 barrels on its route from Canada across the Great Plains.
Since Enbridge is only expanding capacity, not adding a new route, it doesn't need additional state permits. When construction was OK'd by the Department of Natural Resources in 2006, the line was designed to handle 1.2 million barrels, according to the company.
Enbridge is best known for a 2010 spill that polluted a 35-mile stretch of the Kalamazoo River in Michigan. Cleanup costs came in at $1.2 billion, making it the most expensive oil pipeline failure in U.S. history. After alarms went off, crude continued to leak for 17 hours.
The company has already agreed to build an earthen berm around the Medina pumping station that would hold an hour’s worth of oil at the maximum flow of 1.2 million barrels in the event of a problem. That is double the capacity of the holding ponds at other pumping stations along the line.
A local Sierra Club official said Wednesday she was aware the offer to add Dane County to the existing insurance policy was standard procedure.
“Yes, which is why we are happy to see the committee looking into hiring an expert to actually determine the risk, potential damage, and adequate type and amount of insurance needed,” said Elizabeth Ward, conservation program coordinator for the John Muir Chapter of the Sierra Club.