By Mary Beth Elliott, PhD, 350 Madison Climate Action Team, Sierra Club
On Thursday, June 4, (Editors note: delayed to July 16th) the Dane County Board will consider an appeal from Alberta, Canada–based pipeline giant Enbridge, Inc., to overrule an April 14 decision by Dane County’s Zoning and Land Regulation Committee requiring Enbridge to obtain special environmental cleanup insurance. Public testimony will be taken at the meeting, at 7:30 p.m. in Room 210 of the City County Building, 210 Martin Luther King, Jr., Blvd. in Madison.
The committee unanimously voted to require Enbridge to obtain the insurance as a condition for the upgrade of its pump station in Dane County, in the town of Medina. A conditional use permit is required because the pump station is located in a region zoned for agricultural use.
Upgrade of the pump station is critical to Enbridge’s plan to dramatically increase the flow of tar sands through its Line 61, which bisects Wisconsin from Superior to Delavan on the way to Pontiac, Illinois. The pumping upgrade would allow the flow rate to increase from the current 560,000 barrels per day (bpd) to 1.2 million bpd.
That rate corresponds to 2.1 million gallons per hour, 45% greater than the embattled Keystone XL pipeline.
Overturning the committee’s decision would require a three-fourths majority vote by the County Board. If the appeal fails, a lawsuit is expected from Enbridge.
The zoning committee’s precedent-setting decision required Enbridge to carry $25 million in environmental impairment liability (EIL) insurance, considered crucial to protect the county in case of a tar sands spill. General liability insurance held by Enbridge does not reliably cover environmental cleanup and restoration, as evidenced by the slow cleanup after the company’s disastrous tar sands spill in and around the Kalamazoo (MI) River in July 2010. That was the largest inland oil spill in U.S. history, with cleanup costs totaling $1.2 billion. Enbridge has battled its insurance companies for years over the spill.
Another concern is that, with diminishing demand for fossil fuels over coming decades, it is risky to assume that Enbridge will always have sufficient “deep pockets” to cover what insurance does not. One appealing and practical aspect of insurance is that it is probabilistic. The premium does not depend on regulations or public pressure, but reflects the risk posed by a pipeline company as evaluated by the insurance company actuaries.
Citizens of Dane County, as well as local environmental groups such as 350 Madison and the Sierra Club, have participated in the debate about the risk to the county in the event of a spill. Concerns raised relate to several factors:
1. A tar sands spill could devastate rivers, lakes, wetlands, and recreational areas, and could also wreak havoc on property owners and farmers.
2. Enbridge’s dangerous safety record—more than 800 reported spills, including 6.8 million gallons of hydrocarbons released into the land, water, and atmosphere—has been the focus of withering criticism and huge fines from the state of Wisconsin, the Environmental Protection Agency (EPA), the Pipeline and Hazardous Materials Safety Administration (PHMSA), and the National Transportation Safety Board (NTSB).
Notably, the Enbridge emergency response plan that was on file with PHMSA at the time of the Kalamazoo spill stated that a rupture would be detected within five minutes and the damaged segment closed in three minutes. In fact, the leak was not discovered or addressed for more than 17 hours, by which time almost a million gallons had been spilled.
3. A tar sands spill of unprecedented magnitude could occur. At the proposed rate of 1.2 million bpd, a full rupture of Line 61 could equal the Kalamazoo spill in less than half an hour.
4. Tar sands spills are even more devastating than classic crude oil spills. Tar sands oil is much more viscous than traditional crude oil. To allow flow through a pipeline, it must be mixed with toxic, volatile organic chemicals, including benzene, a carcinogen. After the lighter chemicals evaporate, the heavy tar sands can sink to the bottom of waterways, making cleanup incomplete and expensive.
According to Anthony Swift of the National Resources Defense Council, the average cost of every crude oil cleanup over the last 10 years was $2,000 per barrel. The actual cost of cleanup for the Kalamazoo spill was $29,000 per barrel.
5. The risks compared to benefits are problematic. Some of the tar sands oil pumped through Wisconsin is refined in the Midwest and ends up in people’s gas tanks. However, much of it is refined at the Gulf Coast and eventually exported to foreign countries. Moreover, although Enbridge does pay taxes to the state of Wisconsin, the counties through which the pipeline runs do not directly receive tax monies from Enbridge. Meanwhile, the risk of a pipeline rupture is real. At a flow rate unprecedented in the U.S., a Line 61 rupture could have potentially devastating effects on Dane County.
Federal agencies, particularly PHMSA, govern pipeline safety. State and local authorities cannot require a pipeline to shut down or remain at its current flow rate. However, Dane County does have the authority to impose conditions on Enbridge’s pump station upgrade. Such authority was noted in a recent article from Inside Climate News: Damon Hill, a PHMSA spokesperson, said a requirement for pollution insurance would not cross the line into the areas governed by his agency.
Requiring insurance is a unique approach to satisfying pipeline safety concerns, according to Rebecca Craven, program director for the Pipeline Safety Trust, a nonprofit watchdog organization. “I’m not aware of any other situations where an insurance policy of this nature has been asked for as a condition of work,” she said. “It can be seen as another way by which a local agency can make sure their concerns are addressed.”