PHMSA Proposes Record $3.7 Million Penalty against Enbridge for Oil Spill
On July 2, 2012, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”) proposed a record $3.7 million penalty in its Notice of Probable Violation and Proposed Civil Penalty (“NOP”) against Enbridge Energy, Limited Partnership (“Enbridge”). The NOP stems from an oil spill on one of Enbridge’s pipelines in Marshall, Michigan. In the NOP, PHMSA details 24 separate violations of hazardous liquid pipeline regulations, each of which triggers a separate civil penalty. Enbridge has 30 days to respond to PHMSA’s NOP.
The oil spill occurred on July 25, 2010 during a scheduled pipeline shutdown of Enbridge’s Line 6B. According to PHMSA, the oil spill was exacerbated by Enbridge’s multiple attempts to re-start the line despite “multiple alarms and indications of abnormal operations” after Enbridge’s pipeline ruptured. PHMSA also claims in the NOP that Enbridge failed to initiate suspected leak or emergency procedures. Instead, the NOP states that a local gas company notified the Enbridge control center of the oil spill on July 26, 2010. By that point in time over 20,000 barrels of crude oil had spilled, most of which ended up flowing into the Kalamazoo River.
PHMSA’s proposed $3.7 million fine represents a new record since it was authorized under the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 to increase the maximum penalty level for an individual violation from $100,000 to $200,000 per day. Enbridge has spent over $700 million to remediate the pipeline oil spill thus far.
A copy of the NOP is available here.