Yesterday the State of Michigan announced a settlement agreement with Enbridge Energy for the 2010 tar sands oil spill into the Kalamazoo River watershed. This settlement, which gives large credits to Enbridge for their spill cleanup work, raises some interesting questions about the State’s long-term focus on pipeline safety.
$18 million spent by Enbridge to remove the Ceresco Dam and restore the historical flow to that part of the river.
$10 million spent to construct and improve recreational and boating access sites for the public at five locations and provide an endowment for perpetual maintenance of these sites.
$12 million paid in reimbursement of the state’s costs in conducting and overseeing cleanup work, restoration and mitigation, and attorney’s costs.
Money to be spent by Enbridge:
$5 million “mitigation payment” to the state for additional enhancement and restoration of the Kalamazoo River, to be paid within 30 days of the entry of the agreement.
$30 million as estimated costs for Enbridge to restore or construct 300 acres of wetlands in the watershed for permanent protection.
First let me say that I’m pleased to see that there’s secure funding going towards the restoration of the Kalamazoo River. As a lifelong resident of this watershed, this investment is a wonderful development and one that we all should celebrate.
That being said, the rest of the settlement is a little hairy for me. It appears as if the State is crediting the responsible party for what should be required clean-up. This is not the approach I would have expected. The dam removal, in particular, raises a lot of questions. While I applaud Enbridge for restoring the river to its natural flow, that is not the sole reason that structure was removed. This dam was the first major stopping point for all the oil, so incredible amounts were pooled all around it. Enbridge faced major problems addressing this point so their removal of the dam allowed for additional oil recovery. Because of the way the State chose to classify settlement projects, it appears that Enbridge is now okay to say that $18 million went towards restoration efforts vs. clean-up costs.
Overall, I wish the State would have looked holistically at the issue and focused some of their power on pipeline safety improvements. This could have taken the form of additional conditions for improving the pipelines in the State or applying a fine that carries some real weight with both Enbridge and their shareholders.
By not applying punitive penalties, is there a disservice to the folks living along the river or to those landowners that continue to live with pipelines in their backyard? Are we sending the right message to ensure our resources are a priority for protection?
The simple fact is that Enbridge has only been fined a couple million by PHMSA, and that’s it. And while we know the PHMSA penalty was pathetically low, it at least had some safety requirements, both with their agreement and through several corrective action orders.
The big picture is this: all pipeline operators run cost benefit analyses when considering safety investments and without fines attached to spills like this, how can we ensure that safety is being taken seriously? This is a critical point for the State of Michigan since we are a major epicenter for oil and gas pipelines in the Great Lakes. Can we now expect this kind of approach for all major water spills, including in the event of a rupture in the Straits? We can expect that Enbridge (and their lawyers) will use this as a precedent for future negotiations.
I love that there will be major improvements made to the Kalamazoo River, but in my eyes those should be additional conditions and not the entire settlement.
To end on a positive note: sometime within the next few months we should hear from the Environmental Protection Agency on their fines around this spill and Clean Water Act violations. I truly hope the agency will take a big picture look at the spill and how their actions can help reinforce the need for regional action on pipeline safety for our citizens and Great Lakes protection.