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Michigan Fires Oil Pipeline Risk Assessor Over Conflict Of Interest

Pipeline

The state of Michigan has terminated a contract with Det Norske Veritas (DNV GL)—which was preparing a risk analysis report on Enbridge’s Line 5 pipeline below the Straits of Mackinac—over a violation of conflict of interest prohibitions contained in the contract, the Department of Environmental Quality said on Wednesday.

Within the past month, the state’s project team became aware that an employee who had worked on the risk analysis at DNV GL subsequently worked on another project for Enbridge Energy Co., Inc., which owns the Line 5 pipeline, while the risk analysis was being completed,” the DEQ said in a statement.

“The evaluations of Line 5 were supposed to be independent, not tainted by outside opinions or information, but that’s not what happened. Instead, our trust was violated and we now find ourselves without a key piece needed to fully evaluate the financial risks associated with the pipeline that runs through our Great Lakes, this is unacceptable,” Michigan Attorney General Bill Schuette said.

The contract was terminated before the draft report was delivered to the state’s project team.

The State of Michigan commissioned a risk analysis report on the Line 5 pipeline following a recommendation in the 2015 Michigan Petroleum Pipeline Task Force Report.

According to Enbridge’s website, Line 5 supplies 65 percent of propane demand in the Upper Peninsula, and 55 percent of Michigan’s propane needs. Overall, Line 5 transports up to 540,000 bpd of light crude oil, light synthetic crude, and natural gas liquids (NGLs), which are refined into propane.

At the time it hired DNV GL, the state also hired another firm, Dynamic Risk Assessment Systems, to prepare an alternative analysis report on the Line 5 pipeline. Dynamic Risk Assessment System’s draft report is proceeding and will be delivered to the state project team by the end of this month, the DEQ said, adding that representatives from Dynamic Risk Assessment Systems will present their findings to the public on July 6, 2017.

Last summer, Enbridge and the U.S. government reached a settlement for US$177 million over the largest inland oil spill in U.S. history. The deal was reached after years of negotiations, following the rupture of Enbridge’s pipeline in 2010, which led to the spilling of hundreds of gallons of heavy crude into Michigan’s Kalamazoo River.

By Tsvetana Paraskova for Oilprice.com

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