Enbridge’s Kalamazoo River Oil Spill Settlement Greeted by a Flood of Criticism

After considering and rejecting nearly all public suggestions for penalizing Enbridge over the largest ever oil spill into an inland U.S. waterway, federal authorities are asking a judge to approve a settlement negotiated with the Canadian pipeline company.

The U.S. Department of Justice and the Environmental Protection Agency are seeking the court’s approval to assess a $61 million fine and require more than $100 million in safety improvements by the company.

If approved, the settlement would close the books on the federal government’s oversight of the massive 2010 oil spill that fouled a 40-mile stretch of Michigan’s Kalamazoo River. The company’s $1.2 billion cleanup effort took nearly five years.

The federal agencies made the request after rejecting thousands of public pleas that Enbridge face steeper fines, criminal accountability and the shutdown of two of the company’s major pipelines.

A flood of more than 17,000 comments poured into the Justice Department since the announcement of the consent decree in July. They ranged from measured arguments from environmental, watchdog and tribal organizations to often harsh remarks submitted by individuals.

“This is wrong and encourages Enbridge to continue its shoddy pipelines,” read one comment. “Fine them huge or they will just continue as is.”

Honor The Earth, a non-profit organization dedicated to Native American environmental justice, said the government failed to consider the negligence of Enbridge—a factor that could have triggered a criminal case under the Clean Water Act. A National Transportation Safety Board investigation in 2011 blamed “a complete breakdown of safety at Enbridge” for causing and worsening the spill.  

“Enbridge’s negligent handling of the spill in Marshall is surely evidence of a criminal act,” Honor the Earth’s letter said. “The message from the EPA and the Department of Justice seems to be that no behavior, no failure to act, no decision is bad enough to warrant a criminal charge under the Clean Water Act.”

The federal agencies said the settlement was “fair, reasonable [and] adequate.”

The agencies asserted that the settlement adequately addresses the concerns of critics, sets a high bar for safety, and forecloses the possibility of losing a court battle if more strident penalties were pursued.

“After considering these comments, the United States continues to believe that the proposed Consent Decree is highly favorable and in the public interest,” according to the government’s memorandum in support of the settlement.

In response to some specific points made by opponents, federal officials made four revisions to the settlement that included more specific language about the replacement of one of the company’s old pipelines.

Enbridge has agreed to the proposed consent decree, which is now being considered by Judge Gordon J. Quist in Michigan. He will review the terms before deciding whether to approve the settlement. The review could take months.

Representatives of DOJ and EPA did not respond to requests for comment.

Michael Barnes, a spokesman for Enbridge, said the company worked closely with the government to fashion a settlement it could accept.

“We respect the process that was put in place, which includes allowing interested parties to comment on the settlement,” he said.  “Those comments have been addressed by the Department of Justice and we support its findings.”

If the settlement is approved, it will constitute the largest fine ever imposed for an inland oil spill. The spill sent more than one million gallons of toxic tar sands oil down a 40-mile stretch of the river, resulting in a complicated cleanup that kept the river closed for nearly two years.

Stiffer Penalties, Yes, but at a Risk

Andy Levine, a former EPA attorney in private practice in Philadelphia, said government prosecutors take to heart the wishes of the public but their primary objective is to secure the best possible resolution to a case.

“The government knows full well the perception that any kind of negotiation is considered a sacrilege by many who want a heavy fist brought down on violators,” he said. “But the government has to weigh what is in the best interest of the public.”

In this case, he said, the size of the fine and requirements for safety improvements satisfy the balancing of punishment with the public good.

“Yes, the government could have sought stiffer penalties, but at the risk of seeing this become a drawn-out legal case that in the end may not have resulted in an outcome any more favorable than what they agreed to,” Levine said. “And they may not have gotten everything that they got through negotiations.”

The National Wildlife Federation, which has sued Enbridge over pipelines it says threaten sensitive environments, called  the settlement “woefully insufficient.”

“[It] will not deter Enbridge or other oil pipeline operators from taking the necessary steps to protect our communities and wildlife from the next oil disaster,” according to Mike Shriberg, executive director of the National Wildlife Federation’s Great Lakes Regional Center.

Considering Enbridge’s reported $378 million profit for the fourth quarter of 2016, Shriberg said, a $62 million fine and assurances that Enbridge conduct inspections and maintenance could be considered the cost of doing business, “rather than true deterrent to prevent negligent oil disasters that devastate our communities.”

Although approval of the settlement will end the federal government’s oversight, Michigan environmental officials will continue to monitor the river and direct Enbridge to make further restoration if necessary.

The EPA and Enbridge reached the settlement in July after nearly two years of negotiations that saw the two sides more than $60 million apart when they started talks. Discussions began in 2014 with the EPA and lawyers for the Justice Department seeking an $85 million penalty and Enbridge asking for a $22 million fine.

The monetary fine is the largest ever assessed for violations of the federal Clean Water Act involving oil spills, except the $5.5 billion fine levied against BP for the 2010 Deepwater Horizon spill in the Gulf of Mexico. In addition to the proposed EPA fine, Enbridge had paid $2.8 billion for cleanup costs and other fines and penalties associated with the Line 6B spill.

The fine will go into the Oil Spill Liability Trust Fund, which pays for emergency responses to oil spills and cleanup operations that the responsible party cannot fund. Federal officials anticipate the fund will have a balance of nearly $4 billion. Yet in their public comments, people suggested the money should compensate victims of the spill or pay for environmental projects.

Enbridge owns the largest pipeline system in the United States, delivering an average of 1.7 million barrels of oil from Canada each day––a figure that accounts for 23 percent of the U.S. crude oil imports.

‘Complete Breakdown of Safety’

The Enbridge spill resulted from one of six cracks that had previously been detected in the 41-year-old pipeline by Enbridge but went unrepaired.

Enbridge had failed to repair more than 300 defects it had detected in 6B, prompting the National Transportation Safety Board to blast the company in 2011.  

Federal officials stressed that the primary objective of the consent decree is to ensure that Enbridge implement safety improvements to its Lakehead system, a 1,900-mile network of 14 pipelines that have been in operation for as long as 40 years.

The settlement requires Enbridge to:

• Upgrade leak detection measures on its U.S. pipelines.
• Install more shutoff valves.
• Enhance the company’s emergency response plan.
• Train employees to be more watchful of alarms and other indicators of pipeline ruptures.

The proposed settlement includes requirements for spending $110 million on a series of spill prevention safeguards in the Great Lakes region, though opponents of the settlement say that is deceptive because Enbridge would most likely have done much of that work anyway.

New language in the settlement also makes it clear that Enbridge must comply with all state environmental requirements for replacing Line 3, a 292-mile pipeline that cuts across the Minnesota on the way from Neche, N.D., to Superior, Wisc.

Several comments addressed the concerns of Indian tribes, which contend the proposed consent decree affects various rights under treaties with the United States.

The tribal comments tackle issues associated with the potential replacement of Enbridge’s Line 3 in Minnesota and the impact of possible spills from Enbridge’s Line 5, which crosses under the Straits of Mackinac, connecting Lake Michigan and Lake Huron.

Federal authorities assured the tribes that the settlement would not preclude them from pursuing their ongoing challenges to Enbridge and the two pipelines.