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Oil Markets Ignore Growing Geopolitical Risk

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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.

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The Going Rate For The Largest Inland Oil Spill in US History: $177 Million

Pipeline

Eaton Rapids, Michigan— Canada’s Enbridge Energy Partners will pay $61 million in civil penalties for its 2010 oil spill near Michigan’s Great Lakes, according to U.S. government agencies in Wednesday news conference in Marshall, Michigan.

The settlement, such that it is, was reached after years of negotiations between Enbridge and the U.S. government after Enbridge’s pipeline ruptured in 2010, spilling hundreds of gallons of heavy crude into Michigan’s Kalamazoo River. The spill covering nearly a 40-mile stretch, leaving the river polluted for years.

In addition to the $61 million in civil penalties for the spill in and around the Kalamazoo River, Enbridge will also pay $1 million for a spill in nearby Romeoville, Illinois that same year, $110 million to improve its operations and prevent spills from its pipelines that are near the Great Lakes, and $5.4 million in costs footed by the government in cleaning up the Michigan spill. As part of the deal, Enbridge will also be required to replace almost 300 miles of one of its pipelines in the area.

In the years that followed the Marshall spill, over 1.2 million gallons of oil were recovered from the river. Enbridge, who has also been the cause of numerous other oil spill accidents in recent history, has since spent more than $1 billion cleaning up after their Kalamazoo River pipeline fiasco—a figure that does not include today’s settlement.

An investigation of the Marshall spill by the National Transportation Safety Board found that the Kalamazoo spill was the result of errors seen in prior Enbridge accidents. Related: Oil Markets Panic After EIA Reports Surging Gasoline Inventories

At the time of the Marshall investigation, NTSB Board Member Robert Sumwalt said, “It’s evident that this accident did not just occur because of corrosion in a pipeline. What this investigation has shown is that this accident was the result of corrosion throughout many vital safety aspects of the Enbridge organization.”

Other Enbridge spills include nine spills from a single Canadian pipeline due to stress corrosion cracking and metal fatigue from cyclic stress of seam welds—precisely the cause of the pipeline rupture that spilled oil into the Kalamazoo River in 2010.

A separate 2014 investigation into Enbridge’s Line 9 pipeline in Ontario revealed that it was responsible for 35 spills at the time of the investigation.

By Julianne Geiger for Oilprice.com

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