Spills put pipeline firm afoul of feds

The federal government has ordered Enbridge Energy not to reopen a major Wisconsin crude oil pipeline after its latest oil spill, citing a history of failures that suggests an inadequate safety program.

Though the spill near Grand Marsh, Wis., is relatively small -- about 1,200 barrels -- it raises fresh questions about the Calgary, Alberta-based company's oversight of its massive pipeline system, which spans northern Minnesota.

Enbridge faces a record $3.7 million federal penalty over a large oil spill two years ago in Michigan.

"Pipelines operate safely across the country every single day. That's why accidents, like the one in Wisconsin, are absolutely unacceptable," U.S. Transportation Secretary Ray LaHood said in a statement Tuesday announcing that the line wouldn't reopen.

Enbridge spokeswoman Lorraine Little said Wednesday that company officials hope to meet with LaHood in the next day or two to hear his concerns, but she could not say how long the line would be out of service.

The 467-mile line carries North Dakota and Canadian oil from Superior, Wis., to Chicago. It is part of Enbridge's Lakehead system, capable of carrying 2.5 million barrels of oil per day.

The section between Superior and Chicago has been closed. If the shutdown means oil can't move as easily to Eastern markets, it could exacerbate an existing oversupply of crude in the Upper Midwest, but it's not expected to have broad effect on prices.

The spill on the 24-inch pipeline in south-central Wisconsin happened at 2:45 p.m. Friday. Federal investigators reported a split along 4 feet of the pipe's seam. Enbridge said the spilled crude was a light sour blend from Canada that often is refined into diesel fuel.

Repairs were underway Wednesday, but a county road remained closed and two nearby residents remained out of their homes, said Adams County Sheriff Sam Wollin. The spill didn't affect local water supplies.

Yet it comes less than three weeks after the National Transportation Safety Board issued a highly critical report about Enbridge, which in July 2010 didn't recognize for 17 hours that 840,000 gallons of crude oil were spilling into a wetland, and eventually into two waterways, near Marshall, Mich. The cleanup bill has exceeded $767 million.

The NTSB concluded Enbridge didn't "exercise effective oversight of pipeline integrity and control center operations" and that these and other "organizational failures ... resulted in the accident and increased its severity."

Similarly, the Transportation Department's Pipeline and Hazardous Materials Safety Administration said of the Wisconsin spill that Enbridge's "history of failures" on the Lakehead pipeline and defects during construction suggest the company's "integrity management program may be inadequate."

Anthony Swift, an attorney for the Natural Resources Defense Council and co-author of a 2011 pipeline safety report, said the spill comes at a time when Enbridge is proposing a massive expansion to carry more crude oil from the Canadian tar sands and North Dakota's Bakken region.

"We have a pipeline company that has been responsible for one of the largest spills in recent history, and the Wisconsin spill suggests that the company hasn't addressed the safety problems on its pipelines," Swift said.