Increasing dredging requirements resulting from Enbridge's massive oil spill into Michigan's Kalamazoo River in 2010 could push the cleanup bill to almost $1-billion, above and beyond what is covered by the insurance of the company's U.S. affiliate, that unit reported on Wednesday.
Earlier this month, the U.S. Environmental Protection Agency ordered Enbridge to perform additional dredging to remove submerged oil and to maintain sediment traps throughout the river as a result of the Line 6B rupture. On Wednesday, Enbridge Energy Partners L.P. estimated it will incur approximately $175-million more in costs to pay for the additional work. "This estimate is an increase to the total estimated costs of $820-million related to the Line 6B crude oil release that was previously disclosed and excludes any additional fines and penalties," it said in a filing with the U.S. Securities and Exchange Commission.
"The actual costs incurred may differ from the foregoing estimate as we discuss our work plan with the EPA and work with other regulatory agencies to assure that our work plan complies with their requirements. Any such incremental costs will not be recovered under our insurance policies as our expected costs for the incident will exceed the limits of our insurance coverage."
The partnership operates the U.S. portion of Enbridge's oil pipeline network, which moves more than two million barrels a day to the U.S. Midwest, Midcontinent and Southern Ontario from Western Canada.
Late Wednesday, a spokesman from parent company Enbridge Inc. said at this point the company won't discuss its total out-of-pocket costs. But he noted the annual report, which stated claims for the Line 6B release are covered by Enbridge's comprehensive insurance policy. That policy had an aggregate limit of $650-million (U.S.) for pollution liability.
"We are still in the middle of this process and cannot determine what total costs will be," Graham White said in an e-mail.
More than three million litres of oil leaked into wetlands, Talmadge Creek and the Kalamazoo River after a pipeline ruptured near Marshall, Mich., on July 25, 2010. A ruling last year by a U.S. regulator pummelled Enbridge's response, describing it as being so poor that "you can't help but think of the Keystone Kops."
The spill, the largest onshore oil spill in U.S. history, has given significant ammunition to opponents of new projects, including TransCanada's proposed Keystone XL pipeline and Enbridge's Northern Gateway.
With a report from Reuters