Enbridge workers clean up the oil spill in Romeoville, Ill.,Michael R. Schmidt
Two months after one of its pipelines spilled 20,000 barrels of oil into a large Michigan river, embattled Enbridge is set to reopen the taps under restrictions and new demands from United States regulators.
Line 6B, which runs from the Chicago area through Michigan to refineries in Sarnia, Ont., is scheduled to restart on Monday morning, pending final regulatory approval. It has a capacity of almost 300,000 barrels a day.
The pipeline, opened in 1969, ruptured on July 25 and the first alarms sounded at Enbridge operations in Edmonton at about 6 p.m. ET, according to information gathered by U.S. regulators. It wasn't until 18 hours later that Enbridge itself confirmed the spill on the ground in Michigan.
Regulators are restricting how much oil can flow through the reopened Line 6B. Also, as part of an updated "corrective action order" issued last Friday, Enbridge must make detailed safety assessments of the entire pipeline, fix "154 specific known anomalies" within 180 days, and replace 1,160 metres of pipeline under the St. Clair River that divides Michigan and Ontario.
Most of the spilled oil has been recovered but the cleanup is not complete.
"Line 6B will only return to gradual operations under the watchful eye of [U.S.]investigators to ensure that it is done safely and without incident," John Porcari, deputy secretary of the U.S. Department of Transportation, said in a statement.
Some oil producers and refineries were hurt by the two-month shutdown and Enbridge has had to restrict oil shipments elsewhere on its network, which delivers 12 per cent of daily U.S. imports, more than any other supplier, including Saudi Arabia and Venezuela.
Last week, Rick George, chief executive officer of oil sands producer Suncor Energy Inc., said the company was starting to see crude "back up" in Canada because of the closed Enbridge line.
Others, however, have not been affected, including Cenovus Energy Inc., another large oil sands producer.
The price of Canadian oil has recovered from a major decline owing to the disruption in the Enbridge network. At the time of the rupture, the price differential between the heavy oil called Western Canadian Select and the widely followed light sweet crude West Texas benchmark was $17 (U.S.) a barrel.
During the long shutdown, the differential widened to as much as $30. In recent weeks, the gap has steadily narrowed and on Thursday morning it returned to the prerupture level of $17.
"We've had a big jump in prices," said Tim Gunn, CEO of Net Energy Inc., an oil-trading service.
Enbridge has estimated the cost of the spill to the company to be $300-million to $400-million, which may increase given the new requirement to replace the pipeline under the St. Clair River. The replacement will be complete by mid-2011, said Patrick Daniel, Enbridge CEO.
Mr. Daniel, speaking at a press conference in Michigan on Thursday, said the company is still trying to figure out why the rupture happened. "Understanding the metallurgy will be very important to us," he said.
"We will take all of the learnings from this and apply them right across our organization," Mr. Daniel said.
Local opposition against Enbridge has ebbed somewhat with the regulatory demands placed on the company. A week ago, Congressman Mark Schauer, a Michigan Democrat who represents the area where the spill happened, said he had "no confidence that Enbridge can operate this pipeline safely, certainly not until all of those defects are taken care of."
After the federal regulator approved Enbridge's restart plan, Mr. Schauer said it "is just the beginning of a long process in which Enbridge has strict deadlines" to complete repair work.
Mr. Schauer said he was "encouraged" by the additional regulatory requirements and said he would keep a "close eye" on Enbridge and the federal regulator.
David Ebner