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Paul Sancya

The Enbridge spill into Michigan's Kalamazoo River has been contained, but it's left a nasty sheen on the company's reputation and its sprawling network of aging pipelines in North America.

This week's spill of about 20,000 barrels of oil came after a "warning letter" from a United States government official in January that said Enbridge wasn't doing enough to mitigate corrosion on the pipeline that burst Monday, and had likely violated federal regulations.

In Battle Creek, home to 53,000 people, residents feared the damage had already been done, despite increased effort to contain and clean up the oil. Some had to leave their homes as the noxious smell polluted the air and oil lapped the river's shore.

"We've already been devastated in Battle Creek," said vice-mayor Chris Simmons. "The oil's here and it's had a tremendous impact on our river, the environment and the community."

Out by the river, a sign from the local county public health department warned that swimming, boating and fishing were prohibited because of the spill.

Several families who were evacuated from homes along the shoreline have been put up at a hotel in downtown Battle Creek. Displaced people continued to trickle in on Thursday night, staff at the McCamly Plaza Hotel said, but they were being turned away because the hotel was full.

Renee Carpentier and her family wearily packed their belongings back into their white minivan at the McCamly Plaza Hotel in Battle Creek Thursday night. They were evacuated from their home on the river shore in Marshall earlier this week, and then forced to move again to another hotel that had room for them.

"We're exhausted," Ms. Carpentier said as her husband lifted a room fan onto the backseat.

Resident Steven Schwartz stood on a bridge, clapping his hands to scare birds away from the water. "I'll be here all night," he said tearfully.

Enbridge's spill is far smaller than the millions of barrels that poured into the Gulf of Mexico after a disastrous blowout on a BP oil rig, but financial analyst Bob Hastings of investment bank Canaccord Genuity said the incident has "badly tarnished" the Calgary company's reputation.

The spill is the latest in a series of similar missteps over the past decade for Enbridge, North America's largest oil pipeline operator with more than 13,000 kilometres in the ground. The pipelines can carry 2.6-million barrels a day - mainly along an Alberta-Chicago route - and much of them are decades old, like the 41-year-old line that burst in Michigan.

The Polaris Institute of Ottawa tallied about 600 Enbridge leaks in the decade to 2008, at an average of roughly 200 barrels. The last largest spill comparable to the one in Michigan happened at a hub near Edmonton in 2001, where most of the oil was eventually recovered.

The Michigan spill also pokes a hole in arguments put forward by Canada's oil sands industry in recent months - that its production methods, including delivery via pipelines, are environmentally safer than offshore drilling.

Responding on Thursday to questions of safety in the U.S. regulator's warning letter, Enbridge insisted it has been in close contact with government officials throughout the year and had dug up ground in 139 locations to investigate potential problems on Line 6B, the pipeline that failed.

The spill location, in a marshy area at an Enbridge pump station southeast of Battle Creek, was not flagged by earlier tests as a place for worry, the company said. Enbridge had started this year implementing new technology to monitor corrosion.

Pat Daniel, chief executive officer of Enbridge, apologized to Michigan residents for "the mess we have made."

As the spectre of BP's multibillion-dollar bill in the Gulf loomed over Enbridge, the company was pressed about the cost of cleanup and its ability to pay. It didn't provide a figure but said it could well afford it. As of the end of June, it had $409-million in cash on hand.

The spill could cost Enbridge a total of $40-million, Mr. Hastings, the financial analyst estimated.

"We will spend whatever it takes to clean it up," a sombre Mr. Daniel said at a press conference on Thursday afternoon in Battle Creek.

Of the 20,000 barrels spilled in the pipeline rupture, about half had been pulled from the water as of Thursday afternoon, according to U.S. officials, who warned much more work remained.

"We expect this will go on for a while, certainly a number of weeks, if not a couple of months before all the oil can be cleaned up," said Ralph Dollhopf, the federal on-scene co-ordinator for the U.S. Environmental Protection Agency.

Oil poured out of a pipe on a small tributary of the Kalamazoo River and some of it travelled about 40 kilometres downstream, past Battle Creek, before it was stopped at the head of a local lake. The spill was halted quickly and the oil that travelled the farthest was still about 80 kilometres upstream from Lake Michigan, which U.S. officials said was safe.

A first hint of the cause of the spill emerged on Thursday. Line 6B was shut down as part of regular business operations for 10 hours overnight Sunday and it appears the burst pipe is linked with the restart on Monday morning. As of late Thursday, the broken portion of pipe was still in the swampy ground, as Enbridge worked to expose it to sever and extract the section, which will be inspected by U.S. officials.

Mr. Hastings said the spill could "galvanize" opposition to the company's controversial proposal to build a new pipeline called Northern Gateway from Alberta through northern British Columbia to export oil sands production.

A group of Battle Creek residents have set up a tent in a church parking lot in nearby Marshall, where they are collecting donations such as towels for wildlife cleanup efforts, said volunteer co-ordinator Matt Davis.

"We're just doing it. No one from the government or Enbridge asked us to do this," Mr. Davis said. "It's a real hardship for everyone."

The phone at the Circle D Wildlife rescue agency has been ringing steadily the past couple of days with reports of animals covered in oil, agency staff member Jeff DeCuypere said.

Most of the animals in distress are found on the river's shore, he said.

"We've been busy responding to calls all day," he said.

Enbridge's initial response to the spill has been lambasted as "anemic" by Michigan Governor Jennifer Granholm. On Thursday, Enbridge said it had 450 people working on the spill, up from 250 on Wednesday.

The broken Line 6B carries 190,000 barrels a day of oil from the Chicago area through Michigan to refineries in Sarnia, Ont. It's not known how long the pipeline will be closed.