Federal pipeline safety regulators have announced that Enbridge, the Canadian pipeline company responsible for spilling over a million gallons of tar sands into Michigan’s Kalamazoo River watershed in 2010, likely violated two dozen regulations in connection with that spill. In a letter to Enbridge, regulators at the Pipeline and Hazardous Materials Safety Administration (PHMSA) outlined each of the 24 violations and proposed a $3.7 million civil penalty, the largest fine ever proposed by the agency. Of course, this penalty is dwarfed by the costs of the tar sands spill, which has become the most costly pipeline accident in U.S. history, with damage and cleanup costs approaching a billion dollars.
These findings come after Enbridge applied with regulators to double the capacity of the same pipeline to accommodate more tar sands. It's notable that Enbridge is attempting to expand its tar sands pipeline system before getting the report back from the National Transportation Safety Board which will highlight the causes of the accident and issues that should be handled differently, or the National Academy of Science report detailing whether tar sands oil can be safely moved in these types of pipelines. Clearly, Enbridge’s failure to adhere to minimum federal safety standards provides a poor reference for its application, as does their unwillingness to wait for all of the information necessary to ensure public safety. But more broadly, PHMSA’s investigation demonstrates the folly of relying on pipeline operators to self regulate. Unfortunately, due diligence and regulatory oversight often happens after a preventable spill has occurred. The U.S. needs strong pipeline regulations focused on the prevention of spills and a pipeline agency with the authority to enforce those regulations. In addition, the Kalamazoo spill highlights the need to understand the risks of tar sands pipelines and tar sands spills before embarking on projects by companies like Enbridge to expand tar sands pipeline infrastructure.
The federal investigation of the Kalamazoo tar sands spills clearly shows that the most expensive pipeline accident in U.S. history could have and should have been prevented. PHMSA identified 24 probable violations of minimum federal safety regulations. These violations can be placed in four major categories:
- Enbridge was aware of corrosion on its line for years and did nothing to fix it. Enbridge identified corrosion on its pipeline in a 2004 in-line inspection. One year later, the company found crack-like anomalies on the same pipe segment. Despite knowing of a threat to the integrity of its pipelines, Enbridge did not attempt any remediation of the corrosion or cracks, and the pipeline ultimately ruptured on July 25, 2010, spilling over a million gallons of tar sands into the Kalamazoo River watershed.
Pipeline companies and trade groups often argue that strong pipeline safety regulations aren’t necessary because it’s already in their interest to prevent spills. PHMSA’s investigation shows flaw with this argument. When forced to choose between expensive safety measures and saving money, pipeline operators face strong pressures to make the wrong choice.
At $3.7 million, federal pipeline regulators are proposing the largest fine in the agency’s history for noncompliance with minimum safety standards – and yet it’s a tiny fraction of what compliance will cost Enbridge. Nearly a year after the Kalamazoo River spill, Enbridge announced that it would finally replace 75 miles of corroded pipeline on its Line 6B pipeline at an expected to cost $286 million. In this context, the PHMSA fine hardly amounts to a slap on the wrist, amounting to a small cost of doing business than a meaningful incentive to make the business decision that protects the public and environment.
Of course, the cost of the Kalamazoo spill, at over $750 million, far exceeds both PHMSA’s paltry fining authority as well as the cost of replacing corroded pipe and complying with regulations. However, remember that the Kalamazoo River tar sands spill was an order of magnitude greater than the worst case spill scenario anticipated by Enbridge. Overly optimistic risk assessments seem to permeate the pipeline industry. The National Transportation Safety Board (NTSB) found overly optimistic risk assessments to be one of the causes of the tragic, and preventable, San Bruno explosion which killed eight people.
Indeed, TransCanada has proposed the same methodology for calculating the worst case scenario for its proposed Keystone XL tar sands pipeline that PHMSA found so lacking with Enbridge’s pipeline. Both Enbridge and TransCanada assume that a major spill will be instantly identified, and the only variables will the time necessary to shut the pipeline down. PHMSA is fining Enbridge $100,000 for not incorporating the possibility that leak detection itself may take time. However, the agency has made no comment when TransCanada proposed the same mechanism for calculating worst case spills.
While PHMSA actively engages following a pipeline spill, our nation’s pipeline safety regulators often take a passive role with spill prevention and regulatory compliance, delegating these roles to the pipeline operators themselves. Enbridge's inability to adhere to minimum safety standards is yet another of a long list of examples of this policy's failure - San Bruno, Yellowstone, and TransCanada's Keystone I tar sands pipeline to name just a few.
The movement of increasing volumes of tar sands crude on aging pipelines like Enbridge’s Line 6B is a prime example where more due diligence is necessary - particularly as the company proposes to double the amount of tar sands it moves on that line. And Kalamazoo offers a cautionary tale to the communities along the proposed routes for Keystone XL, Northern Gateway and other tar sands pipeline projects currently under consideration.