Michigan pipeline break, oil spill clean-up costs mount for Enbridge

By Phaedra Friend Troy

Costs related to the Lakehead pipeline system oil spill in Michigan may top $400 million for embattled Enbridge Energy Partners (NYSE:EEP), the operator of the torn pipeline.

This amount, before insurance recoveries, includes emergency response, clean-up efforts, pipeline repair and inspection, third-party claims, and lost revenue.

This amount excludes any fines related to the oil spill that entered the Kalamazoo River system.

The company estimates costs have reached up to $45 million after insurance payments.

On July 26, a portion of the giant Lakehead pipeline system, the Line 6B pipeline burst spilling nearly 20,000 barrels of oil into the Kalamazoo River system in Michigan.

After being rejected once, Enbridge resubmitted a plan for restarting the pipeline that delivers crude to numerous Mid-US refineries. The Line 6B pipeline plan is still under review with the Office of Pipeline Safety.

Earlier this week, the US Department of Energy fined the company $2.4 million for violations of federal pipeline safety regulations related to a 2007 accident. While performing repairs to the Lakehead system in Clearbrook, Minnesota, the crude oil ignited, claiming the lives of two service workers.

Additional fines of $57,800 were issued in relations to violations involving facilities in Louisiana and Oklahoma.

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