Enbridge Appeals Dane County’s Requirement For It To Carry Insurance Against Oil Spills

A Canadian energy firm is appealing a Dane County zoning committee’s decision to require special insurance in order for the company to move forward with an oil pipeline expansion.

Dane County’s zoning committee is requiring Enbridge Energy Corp. to obtain a $25 million environmental liability policy to get a permit to build a pump station. The station is part of of a plan to send 1.2 million barrels per day through a pipeline running from Superior to the Illinois border.

Enbridge spokeswoman Jennifer Smith said they’re appealing the permit with the county board. Smith said Enbridge can’t guarantee it could meet the conditions.

“If there was some sort of environmental disaster that had nothing to do with Enbridge or any of our assets, that could adversely impact the market for that type of insurance, therefore, limiting our ability to get it,” said Smith.

Smith said she couldn’t offer specifics on what factors in the insurance market may affect their ability to get environmental impairment liability insurance other than to say “insurance is risk-driven.”

“Any time there’s a market-driven product, Enbridge cannot control how the availability or the amount of insurance would be available to us,” she said. “Since we cannot control the availability of that particular insurance that they’re looking for us to get, there’s no way that we as Enbridge can guarantee that we would be able to comply with the conditional use permit requirement.”

Dane County Zoning Committee Chair Patrick Miles said Enbridge’s ability to obtain that coverage is a sign of risk to the county and the reason for requiring such coverage in the event of a spill.

“If Enbridge is confident in their safety protocols and technology and everything else that they say are going to keep us all safe from the risk of a spill, then they should have the confidence that they will find insurance in the market,” said Miles.

Smith said the company’s current insurance and finances are enough to address the unlikely event of a spill. Miles, however, said Enbridge’s current insurance may have gaps in coverage.

Enbridge has been involved in ongoing litigation with one insurance carrier that’s disputing the recovery of some costs related to Enbridge’s claim for the Kalamazoo River Spill. The company has spent more than $1 billion cleaning up the river after 843,000 gallons of crude oil spilled from its Line 6B pipeline near Marshall, Mich., in 2010.

Since then, Smith said Enbridge has spent more than $4 billion to upgrade pipeline technology to improve safety.

“This pump station is going to have the most state-of-the-art alerts and monitoring systems that we’ll be building right into there,” said Smith.

Mary Beth Elliott, with the environmental group 350 Madison, said she’s concerned about Enbridge’s statements regarding their commitment to safety.

“At the time of the Kalamazoo spill, on their written records were that they could detect the spill within five minutes and shut it down within a few minutes if there were to be any kind of a spill,” said Elliott. “Shortly after that, they had this Kalamazoo spill, which was not shut down for 17 hours.”