County committee requires pipeline operator Enbridge Energy to carry pollution insurance
Source: http://host.madison.com, April 15, 2015
By: Jeff Glaze
Dane County officials will require a Canada-based company to carry special pollution insurance in order to gain permits for planned upgrades to a pipeline running through the county.
The Dane County Zoning and Land Committee’s unanimous decision follows a consultant’s recommendation that the county require Enbridge Energy to carry $25 million in pollution insurance in order to proceed with its pipeline capacity expansion.
The pollution insurance is on top of a $100 million general liability insurance requirement.
Enbridge is adding pumping horsepower at 13 locations along its Line 61 route, including a station in northeastern Dane County.
The pipeline, which carries Canadian tar sands crude across Wisconsin on its way to refineries, has averaged a 400,000-barrel-per-day flow since it began operating in 2009. The planned upgrades would triple the flow rate.
County officials have delayed approvals of permits necessary for Enbridge to upgrade the Dane County pump station to gain additional environmental protections following a 2010 Enbridge spill that cost $1.2 billion to clean up. That spill fouled miles of Michigan’s Kalamazoo River.
Enbridge has said that government cleanup funds and its own cash reserves can cover any costs insurance doesn’t cover.
But the report from David J. Dybdahl Jr., a Middleton-based broker and expert on environmental insurance, warned that the federal and state funds aren’t guaranteed to be in place forever, and Enbridge may not always be as rich as it is now.
Dybdahl told committee members Tuesday that spills do not fall under the definition of property damage in insurance policies, but an Enbridge attorney said only one insurer has ever refused to pay on that basis. Enbridge is in litigation with that insurer.
Dybdahl said he recommended $25 million in pollution insurance because it exceeds the cost of cleanup for most on-land spills on record.