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Oil leak in Michigan shines negative spotlight on Canada's Enbridge

Oil leak in Michigan shines negative spotlight on Canada's Enbridge

By: Lee-Anne Goodman, The Canadian Press

3/08/2010

WASHINGTON - The leak of more than three million litres of Alberta crude from a Canadian pipeline into a rural Michigan creek is shining a harsh spotlight on Canada's Enbridge Inc. in a country increasingly fed up with Big Oil after months of devastation in the Gulf of Mexico.

Like BP before it, a company helmed by foreigners has been going to great lengths to assure the Americans affected that it will clean up the mess, even promising Tuesday to buy up to 200 homes put up for sale before last week's spill at full list price.

"We are going to make this right and we are responsible for it," Patrick Daniel, CEO of Enbridge (TSX:ENB), told a news conference in Marshall, Mich., west of Detroit.

His pledge to purchase the homes of those most affected by the spill came as two U.S. congressmen sent a stern letter to the Calgary-based Enbridge, demanding answers on how it maintains and inspects its oil pipeline after a rupture on July 26 resulted in the leak.

The 41-year-old pipeline was transporting the oil _ tar-like bitumen from Alberta's Cold Lake oil sands region mixed with a diluting agent _ from northern Indiana to oil refineries in Sarnia, Ont.

"This should never have happened," said Mark Schauer, the Democratic representative for the area and one of the letter's authors.

"This company was negligent in maintaining and repairing their pipe ... this company is going to have to do a lot to make sure that property values are restored, that all of the financial loss as well as other losses are repaid to this community," he told a town hall meeting in Marshall on Monday night.

Schauer and James Oberstar, a Democratic congressman from Minnesota who's the chairman of a congressional committee on transportation and infrastructure, demanded Enbridge provide information about its monitoring and inspection practices.

They've accused the company of a woefully slow response to the leak, and have given Enbridge officials until Aug. 13 to respond to their demand for information.

The letter was also sent to Ray LaHood, the U.S. Secretary of Transportation, and Lisa Jackson, the head of the Environmental Protection Agency.

"We are active and fully co-operative in responding to all requests from regulators, government agencies and congressional committees in a timely manner," Alan Roth, an Enbridge spokesman, said from Calgary.

But in the aftermath of the leak, Enbridge has found itself under a glare of negative media publicity in the United States at an awkward moment: the Canadian industry had been working to promote the oilsands as a safer alternative to offshore drilling in the aftermath of the continuing oil disaster playing out in the Gulf of Mexico.

The Detroit Free Press recently reported that Enbridge's American subsidiaries have been targeted 31 times for safety violations by the Pipeline and Hazardous Materials Safety Administration, or PHMSA, the U.S. agency that oversees pipelines.

The agency has twice notified Enbridge this year about safety concerns regarding its Lakehead system that encompasses the Great Lakes, including corrosion monitoring along the pipe that ruptured last week.

In Canada, the National Energy Board says Enbridge pipelines have ruptured eight times since 1994.

The Detroit-based Great Lakes Environmental Law Center has also notified Enbridge that it intends to file suit for violations of the Clean Water Act over the spill. The federal law allows fines that could exceed US$26 million dollars.

A U.S. congressional committee plans to probe the spill. On Capitol Hill, in fact, there's been growing discomfort about oilsands pipeline prior to the Michigan leak.

The U.S. State Department announced last week that it was delaying a ruling on TransCanada Corporation's so-called Keystone XLline to the gulf coast. It wants more time to assess a critical submission from the Environmental Protection Agency that said the environmental impact of Alberta's oilsands needed to be studied more closely before the pipeline is approved.

In June, Democratic congressman Henry Waxman, chairman of the House of Representatives committee on energy and commerce, joined 50 other Democratic members in criticizing the State Department for failing to analyze "the most significant environmental impacts" of the Keystone pipeline.

Canadian officials in Washington have been in overdrive assuring congressional leaders that Canadian crude remains a safe energy source despite the oil spill, and have made offers to help in Michigan.

"Canada stands ready to consider any request for assistance from U.S. or Michigan authorities," an embassy spokeswoman said Tuesday.

Lewis Reynolds, an economist whose new book "America The Prisoner" details how the U.S. grew so dependent on foreign oil, said oil spills are getting more attention now in the aftermath of the disaster in the Gulf of Mexico.

"They're clearly frequent, and we know that now," he said in an interview Tuesday from North Carolina.

"This spill has brought the issue to the forefront once again _ we need cleaner energy supplies because oil is simply not a friendly substance to have in your rivers, streams and oceans."

http://www.winnipegfreepress.com/business/breakingnews/oil-leak-in-michi...

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