After 2-month shutdown, Enbridge gradually restarting service on oil pipeline in Michigan

By Tim Martin, AP
Monday, September 27, 2010

Enbridge gradually restarts Michigan oil pipeline

LANSING, Mich. — After a two-month shutdown, oil flowed Monday through a pipeline that leaked more than 800,000 gallons of oil in southern Michigan this summer, with some of it polluting a major river.

Enbridge Inc. confirmed the gradual restart of the pipeline running between Griffith, Ind., and Sarnia, Ontario, was under way in a short statement released Monday evening. The pipeline had been shut down since the company reported a massive oil leak July 26. An estimated 820,000 to 1 million gallons spilled near Marshall and some reached the Kalamazoo River.

Enbridge said the restart is a “staged process” run in accordance with a restart plan approved by the federal Pipeline and Hazardous Materials Safety Administration. Monday was the earliest a gradual return to service was permitted by federal regulators.

The pipeline will restart at lower pressure. An independent third party that reports to federal regulators will help monitor the restart.

The Pipeline and Hazardous Materials Safety Administration issued a statement saying it also was keeping tabs on Enbridge during the restart and had staff located throughout the pipeline system to oversee it.

Enbridge will have to make multiple repairs on the pipeline within 180 days, and it will have one year to replace a section of dented pipe running under the St. Clair River in southeast Michigan.

In August, Enbridge estimated cleanup and other costs from the spill could be $300 million to $400 million. The charges include the emergency response, cleanup, repairs, claims by third parties, lost revenue and other items. It excludes possible fines and penalties.

Insurance is expected to cover most of the cost.

About 2,000 workers were involved in the cleanup and related activities at their peak. The company expects more than 500 workers to remain on the job through October.

Enbridge had bought eight homes near the spill site as of last week. The company is in the final stages of buying another 14 homes, chief executive officer Patrick Daniel said last week.

More than 1,500 oil-damaged birds and animals have been rescued from the spill site. More than 1,300 turtles, more than 100 Canada geese and several muskrats, swans, herons, snakes and frogs have been rehabilitated and released into new homes.

The restart of the pipeline might not have much influence on oil or gas prices. The line approved for a restart Monday has a capacity of roughly 283,000 barrels per day and had moved closer to 190,000 barrels per day — much less than the 670,000 barrel per day Enbridge pipeline between Superior, Wis., and Griffith, Ind., that was shut down from Sept. 9 to 17 because of a spill in Romeoville, Ill.

The Illinois spill caused a brief spike in Midwest gas prices.

“That was a major feeder to some of the larger refineries in the Midwest,” said Phil Flynn, an analyst at PFGBest in Chicago. By comparison, Flynn said, the pipeline that leaked in Michigan didn’t have as big an impact on the market.

Most analysts expect retail gasoline prices to stay steady in October and November, as supplies remain plentiful and demand is listless compared with a peak summer driving season.

(This version CORRECTS the story to say that some, but not all, of the spilled oil reached the Kalamazoo River.)

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