Source: http://www.hngnews.com, April 24, 2015
By: Jennifer Fetterly
A Dane County zoning committee is requiring an energy company to come up with $25 million of additional insurance before moving forward on a pipeline expansion project.
The conditional use permit (CUP) approved Tuesday, April 14 by the Dane County Zoning and Land Regulations Committee would allow Enbridge Corp. to double the volume of tar sand oil being transported through the county on Line 61 that runs from Superior to northern Illinois.
Environmentalists and energy company workers packed the City-County Building meeting room in Madison to hear the discussion and vote. The majority, 43 to 37, registered in opposition of the CUP approval that allows pipeline substation upgrades in the Town of Medina.
The committee’s decision occurred following a months-long delay while insurance expert David Dybdahl analyzed the company’s risk and recommended the additional environmental impairment insurance (EIL) on top of the $100 million in general liability insurance that Enbridge said it would provide to the county.
Dybdahl, who insured the Chernobyl containment operations, said EIL coverage specifically covers clean-up, restoration and natural resources damage and fills in the gap of the general liability coverage.
Dybdahl pointed out that Enbridge is in litigation with its insurance carrier in connection with the July 2010 pipeline spill into the Kalamazoo River, which cost the company more than $1 billion to clean up. He said general liability insurance policies contain pollution exclusion that may require companies to take part in lengthy court battles to get unrecovered funds. He also the additional coverage would protect the county and its residents, should the company’s financial outlook decline if consumer demand for less fossil fuels falls in the future.
Enbridge has $700 million in general liability insurance per incident and offered the county an additional $100 million per incident in which it would name Dane County as the insured, allowing the county to collect directly from the insurance company.
Environmental groups — including the Sierra Club and 350 Madison — advocated for the additional insurance coverage because of the threat of an oil spill, citing the company’s track record with previous spills.
Enbridge officials have contended over the last couple of months that it has the funds to clean up spills and uses insurance as a final measure to recoup costs. Federal money up to $1 billion per incident, is also available from a fund that was set up after the 1989 Exxon Valdez spill in Alaska.
At the meeting, Enbridge legal counsel Tom Pyper said the company is already covered and shouldn’t have to purchase additional insurance.
“Forcing the company to get this is just not necessary,” Pyper said.
Dane County has been the last holdout with approvals already granted by the other 11 municipalities for pump station upgrades along the pipeline. Medina town officials recommended the county approve the CUP, which now goes back to the Town of Medina for approval or denial. Enbridge has 20 days from town’s decision to appeal the process.
On Thursday, an Enbridge spokesperson said the company was pleased by the county board’s decision and expected Enbridge to begin substation upgrades as soon as possible.