Minnesota regulators reject Enbridge’s request to limit pipeline fines

In an August 2017 report, Enbridge pleaded guilty to violating United States pipeline safety laws, for a pipe rupture and spill in Michigan in 2010 that spilled more than 20 million gallons of crude oil onto a river and its tributaries, killing some wildlife and contaminating the nearby Great Lakes.

The federal pipeline regulators formally recommended Enbridge be fined for this unprecedented failure, and on Wednesday, in a unanimous decision, the pipeline commission denied Enbridge’s offer to pay $87 million and have the cap reduced on future penalties.

In a news release, the commission said “Enbridge has failed to demonstrate substantial evidence that it made substantial effort to fully implement the legislative provisions for the separation of its upstream operations from its downstream operations” for the Mainline Pipeline System.

The Minnesota regulators voted 6-0, along party lines, in their case against the Enbridge proposal, and the decision is in accordance with earlier rulings by the commission.

“This was something that was like putting oil back into the water where it came from, and that’s against law,” Janice Nolen, environmental coordinator for Minnesota Gov. Tim Walz, said about the 2010 pipeline spill.

For the past three years, Enbridge has been awaiting a decision by the Minnesota commission on what to do with the pipe assets remaining from the 2010 pipeline rupture. The storage tanks and pumps that run underneath the Mississippi River are the largest residual asset; the company is proposing to move the remaining assets, and its liability, to a new third-party entity.

Enbridge says it’s the only pipeline company in the U.S. that owns these assets, and it wants to get them safely off its balance sheet, but the commission has been all over Enbridge. The 2009 report from the pipeline safety regulators suggested Enbridge sell the assets and take over the operating risk, but Enbridge took one last look at the report and decided the assets should remain.

Commissioners rejected the company’s latest proposal to solve the problem — throwing out proposed values from recent appraisals of the assets on Wednesday.

“I think the Minnesota Public Utilities Commission and the state of Minnesota are acknowledging this company’s failure,” said John Hoffer, an attorney at Perkins Coie representing the Minnesota Department of Natural Resources. “The question now is, does this company really have a plan for the assets?”

Read the full story at The Pioneer Press.


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