Enbridge Energy Partners has reached a $176 million settlement for the costliest inland oil spill in U.S. history.
The spill occurred after a pipeline ruptured in southwestern Michigan and polluted a nearly 40-mile stretch of the Kalamazoo River.
The agreement between U.S. government agencies and Canada-based Enbridge wrapped up years of negotiations following the release of at least 843,000 gallons of heavy crude in July 2010.
In addition to a $61 million penalty, the deal requires spending on measures to prevent future spills, detect leaks and prepare for emergencies across Enbridge’s Lakehead network, a series of 14 pipelines extending over 2,000 miles across seven states.
The agreement with the Department of Justice (DoJ) and the Environmental Protection Agency (EPA) focused on twin underwater pipelines that cross the Straits of Mackinac, the waterway linking Lakes Huron and Michigan in northern Michigan.
Enbridge said it will replace 300 miles of a pipeline, pay $1 million for a separate 2010 spill in Romeoville, Illinois, and hire an independent auditor to make sure the company complies with the deal.
The penalty is the largest ever assessed for violations of the federal Clean Water Act except those stemming from the Deepwater Horizon spill in the Gulf of Mexico six years ago, said John Cruden, assistant attorney general for the Justice Department’s environment and natural resources division.
“We think these very strong measures will go a long way to make sure this kind of disaster will not happen again,” said Cynthia Giles, the EPA’s assistant administrator for enforcement.
The settlement adds to the expenses Enbridge has incurred for the spill near Marshall, Michigan, which oozed into Talmadge Creek and then the Kalamazoo River. It damaged shorelines and wetlands, prompted an evacuation warning for some riverfront residents and harmed thousands of animals, birds and fish.
The Calgary, Alberta-based company has paid $1.2 billion for cleanup and environmental restoration, which completed in 2014. It reached a $75 million deal with the state last year and bought 154 residences in the affected area. Company officials said the stepped-up inspections and spill prevention action under the federal settlement will cost an additional $110 million. A $5.4 million payment will reimburse federal costs and resolve Enbridge’s liability under the Oil Pollution Act.
An investigation by the National Transportation Safety Board found instrument tests had signaled the pipeline’s degraded condition five years before the spill, but no one dug up the line for a closer look.
As oil oozed into the waterways, control center personnel in Canada misinterpreted alarms and made things worse by pumping even more oil into the line, investigators said. It took 17 hours for the company to realize what was happening.
“The experience, which has been very humbling, has made us a better organization today, and we’re more focused than ever on ensuring the safety and reliability of our systems,” said Brad Shamla, Enbridge’s vice president for U.S. operations.