EPA fines Enbridge $6.7 million for response to pipeline-safety issues

Federal environmental regulators have fined Enbridge $6.7 million for allegedly violating a 2017 consent decree, saying the company failed to remedy pipeline-safety issues in a timely manner.

Enbridge announced Thursday that it has settled with the Environmental Protection Agency and agreed to pay the fines, which were levied in May.

The EPA noted among other things that Enbridge neglected to properly evaluate thousands of "shallow dents" on its Lakehead Pipeline System, which runs across northern Minnesota and through northwestern Wisconsin.

Just over $3 million of the $6.7 million in fines involved Enbridge's failure to repair or mitigate small dents that showed "indications" of "metal loss" and "cracking," according to an EPA letter.

Mike Koby, Enbridge's vice president, U.S. liquids operations, said the company and the EPA disagreed over the nature of the small dents. However, Enbridge did further pipeline-integrity assessments to address the EPA's concerns, he said.

"There were never any safety or pipeline-integrity concerns," Koby said.

Enbridge signed a consent decree in 2017 with the U.S. Justice Department to resolve claims from a massive oil spill in Michigan and another significant pipeline leak in Illinois, both in 2010.

The company paid $177 million and vowed to improve pipeline safety under the consent agreement.

Enbridge said it reports compliance issues to the EPA and that most of the recent fines relate to self-reporting and were "administrative in nature."

Enbridge transports oil through a corridor of six pipelines — the largest conduit of Canadian crude into the United States — that ends at the company's terminal in Superior, Wis. From there, several Enbridge pipelines carry oil through much of the Great Lakes and Midwest.

The company has proposed a $2.6 billion pipeline to replace its aging and corroding Line 3 across northern Minnesota. After five years of regulatory review, Enbridge has received its main state approval for the controversial new Line 3, but still needs other important permits.

The pipeline dents that distressed the EPA were primarily on Line 1, Koby said. Built in 1950, Line 1 is the oldest of the six pipelines on Enbridge's Minnesota corridor with an average annual capacity of 237,000 barrels of oil per day.

"Enbridge failed to complete timely identification and evaluation of thousands of 'shallow dent' features on Lakehead System pipelines to determine whether such dents met dig selection criteria," according to the EPA.

Essentially, the EPA said that Enbridge should have done more "integrity digs" to visually inspect the pipelines.

Koby said that there isn't any criteria or definition of a "shallow dent," but the company did do more integrity digs in light of the EPA findings.

The consent decree stems largely from a pipeline rupture in 2010, which spilled 834,000 gallons of oil into a tributary of the Kalamazoo River in Michigan. It was one of the worst onshore U.S. oil spills, costing Enbridge $1.2 billion to clean up. Federal safety regulators conclude Enbridge didn't adhere to its own safety procedures.

In 2018, the EPA fined Enbridge $1.8 million for violating the consent decree by missing deadlines for pipeline inspections.

Mike Hughlett • 612-673-7003