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Workers attempt to clean oil from the banks of the Kalamazoo River in Marshall, Mi. July 30/2010 after Enbridge's oil pipeline ruptured spewing more than 3 million liters of crude into the waterway.Kevin Van Paassen

Enbridge Inc. has been slammed in a scathing review of its massive Michigan pipeline spill, with a U.S. watchdog saying the company acted like "the Keystone Kops" and ignored safety procedures while suffering "pervasive organizational failures."

More than 3 million litres of oil leaked into wetlands, Talmadge Creek and the Kalamazoo River after a pipeline belonging to Enbridge ruptured near Marshall, Mich., on July 25, 2010. The company expects to spend $765-million cleaning up – five times more than the next costliest onshore cleanup effort – with its insurance footing most of the bill. A worker from a local gas utility reported the spill to Enbridge's control centre 17 hours and 19 minutes after the line had failed, the U.S. National Transportation Safety Board said at a hearing Tuesday.

"Learning about Enbridge's poor handling of the rupture, you can't help but think of the Keystone Kops," Deborah Hersman, NTSB's chair, said in her opening remarks at Tuesday's hearing. "Why didn't they recognize what was happening? What took so long?"

Enbridge noted Tuesday it has taken full responsibility for the spill from the beginning, but it will wait until the final report is issued before commenting on the board's findings. "Enbridge believes that at the time of the accident it met or exceeded all applicable regulatory and industry standards in its operations," the company said in a statement.

In its report, the NTSB said that not only was Enbridge's response to the spill slow, but the Calgary-based company knew at least five years before the massive leak that the pipeline was corroded and cracked. External corrosion and cracking caused the 471-kilometre pipeline to rupture, the NTSB said. Roughly 15,000 defects were identified in a 2005 report, a presenter at the hearing said. About 900 of those were dug up, he said, with Ms. Hersman noting the one that spilled was not among those tapped for digging.

While Enbridge has already been fined $3.7-million for the July, 2010 spill, the NTSB's review is likely to damage both the company and its competitors as they vie for permission to build even bigger oil-sands pipelines across Canada's West Coast and the United States' Gulf Coast.

Should those controversial pipeline proposals be thwarted, Canada will lose out on diversifying its export market, which proponents of the energy industry – including Prime Minister Stephen Harper – argue will dent economic growth and job opportunities.

David Mayer, a managing director at the NTSB, who delivered part of the NTSB's findings, said "pervasive organizational failures at Enbridge" added to the company's slow response and prolonged spill.

Enbridge staff twice pumped more crude – about 81 per cent of the total release – after the pipeline ruptured, Ms. Hersman said.

Enbridge, at the time, was adamant it dealt with the problem swiftly and effectively.

The NTSB's five-member panel argued industry regulators are also at fault.

"Delegating too much authority to the regulated [companies] to assess their own system risks and correct them is tantamount to the fox guarding the hen house," Ms. Hersman said in her closing comments.

"Regulators need regulations and practices with teeth – and the resources to enable them to take corrective action before a spill, not after."

In a statement, Enbridge said it has "already implemented, in 2010 and 2011, appropriate operational and procedural changes based on our own internal investigation.

The findings in the NTSB factual reports posted to date are generally consistent with the findings in the Enbridge report."

It added: "As a result of our detailed investigation into the accident, and as part of our ongoing continuous improvement efforts, we have taken steps to address lessons learned and make incremental improvements aimed at preventing a similar accident from happening again in the future."

Follow Carrie Tait on Twitter: @CarrieTaitOpens in a new window

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