MADISON — Dane County will hire an environmental insurance expert to analyze whether the Enbridge Corp. pipeline expansion project has the right kind of insurance, and enough of it, to handle a potential spill.
David Dybdahl, who helped insure containment operations after the Chernobyl nuclear disaster in 1986, will advise the Dane County Zoning and Land Regulation Committee after supervisors asked for more guidance on the company’s conditional-use permit request.
Environmental groups are applauding the county’s decision, but Enbridge officials said they have enough insurance to handle a spill.
Enbridge is proposing to increase the volume of oil transported in Line 61 from 560,000 barrels per day to 1.2 million barrels, with an intermediate increase of 560,000 barrels until the maximum volume is reached.
Enbridge’s existing pipeline — built in 2007 — runs from Superior to northern Illinois. It enters Jefferson County near Waterloo, heads south and crosses under the Rock River south of Fort Atkinson and just north of Lake Koshkonong. Additionally, there are two lines running through western Walworth County and two lines running through eastern Rock County near the City of Whitewater.
Line 61 transports tar sand oil, from Canada, which has a higher density than regular oil. Because tar sands oil is denser than traditional oil, it does not float in water, thus creating more expenses in cleaning up any potential spill or leak in or near bodies of water because dredging would be required.
A company spokesperson has said that the oil flows at 3 to 5 miles per hour in the pipeline, and that Line 61 was “designed, permitted, engineered, constructed and safety tested” before becoming operational because it “had the goal of operating at 1.2 million barrels a day at some point in time.”
The Dane County portion of the project includes pumping station upgrades at the Town of Medina near Waterloo, which require approval from Dane County zoning officials.
The county delayed a decision on the permit for a second time in January. The committee on Feb. 10 OK’d hiring Dybdahl at an estimated cost of $5,000, which is expected to be paid by Enbridge.
Enbridge has $700 million in general liability insurance per incident, and in a meeting with county lawyers, it offered an additional $100 million per incident in which it would name Dane County as the insured. The additional insurance will allow the county to collect directly from the insurance company in the event of a spill.
Environmentalists have said that isn’t enough insurance, pointing to the $1.2 billion cleanup costs of Enbridge’s July 2010 pipeline rupture in an older pipeline that released 843,000 gallons of crude oil into the Kalamazoo River in Michigan and cost more than $1 billion to clean up. Enbridge since replaced that line with new pipe.
Federal funds, up to $1 billion per incident, also are available from the Oil Spill Liability Trust Fund. The fund was set up after the 1989 Exxon Valdez spill in Alaska.
Enbridge spokesperson Aaron Madsen, who was at the Feb. 10 said the company’s insurance is adequate, and there is no more insurance available on the marketplace.
“The type of insurance and the level of insurance that Enbridge carries is not like getting car insurance or home insurance, where you can spend more money and get additional coverage,” Madsen said. “Enbridge buys as much insurance available on the market — it’s in our best interest for our company to do so — and $700 million is what we’re are able to get on the market right now.”
But representatives from the environmental group Madison 350 disagreed and said they are glad to see county zoning officials stand up to the company.
“This insurance is not intended for pollution cleanup, and if it were adequate, why is the company suing in a previous case, in 2010, to get payment?” said Peter Anderson, a Madison 350 spokesperson.
Anderson said there is more insurance on the market, adding that if the company can’t get it, Enbridge must be a bad risk.
Enbridge spokesperson Steve Rolstad said the company has the funds to clean up spills and uses insurance as a final measure to recoup costs.
He also said Enbridge has spent $4.4 billion since 2010 to help prevent spills. This includes a new control center in Edmonton that monitors pressure and flow and implementing Smart Pigs, a device that is inserted in the pipeline that acts like an MRI and can show restrictions and deformations.
For now, the Pipeline 61 expansion is stalled in Dane County, and there’s no word yet on how long the consulting process will take.
Approvals already were granted by the other 11 municipalities for pump station upgrades along the pipeline.
Officials from the Town of Medina near Waterloo, where the pump station is located, recommended the conditional-use permit to the county.
The company also has received a state Department of Natural Resources permit for the expansion project, as well as federal approval to operate at the project expanded oil pumping output.