Enbridge: Worst-case Line 3 spill would cost $1.4 billion

Oct. 18--Enbridge Energy said the worst-possible oil spill along its planned Line 3 oil pipeline would cost up to $1.4 billion, according to an assessment filed with the Minnesota Public Utilities Commission Tuesday.

The Calgary-based company's assessment said "a full-bore rupture scenario where the pipeline is shut down and isolated after 13 minutes from the release occurring" could cost $1.4 billion if it occurred on the Red, Mississippi or Red Lake rivers.

"Flowing water has the potential to transport product much further than a land based spill, which heightens the potential impact to sensitive areas and increases clean-up costs," Enbridge wrote.

The five-member PUC unanimously granted the project a certificate of need, but requested Enbridge make additional compliance filings, or modifications, which included "an updated cost model for a full-bore pipeline rupture."

Once completed, the 340-mile pipeline will carry 760,000 barrels of oil per day across northern Minnesota on its route from Alberta to the Enbridge terminal in Superior.

In an emailed statement Wednesday, Enbridge emphasized the report was designed to show the absolute worst damage a spill could do.

"This engineering analysis, by design, did not take into account timely response or mitigation efforts. Incident records from past pipeline operations, as well as analyses of failure frequencies, demonstrate that a large release would be unlikely for a new and modern pipeline, like (Line 3 Replacement)," Enbridge said.

Enbridge's hypothetical $1.4 billion worst-case-scenario spill exceeded the company's 2010 Line 6B oil spill near Kalamazoo, Mich., which released more than 800,000 gallons of oil into the Kalamazoo River at a cleanup cost of more than $1.2 billion.

In early September, the Minnesota Department of Commerce, which has long opposed the pipeline, said Enbridge's total liability coverage of $940 million for Line 3 was "insufficient" and "designed not to cover most crude oil pipeline spills."

At the time, the company argued "Enbridge's response efforts are not contingent on insurance coverage" and would pay for emergency response out of pocket first, then seek insurance reimbursement.

On Wednesday, Enbridge said the worst-case scenario assessment proves they can cover even the worst spills.

"The report confirms Enbridge has the ongoing financial ability to cover cleanup costs in the unlikely event of a worst case pipeline release in a high consequence area."

Enbridge still has to obtain a number of permits before construction can begin in Minnesota.

Enbridge began working three years ago to get the project approved.

While the company and project supporters argue the new pipeline is needed to replace the existing and aging Line 3, opponents argue the line contributes to climate change, violates indigenous rights and is ultimately unnecessary.

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