Tuesday, August 3, 2010

PHMSA issues Corrective Action Order to Enbridge in Michigan spill

DETROIT, Mich. - U.S. regulators have ordered Canada's Enbridge (NYSE: ENB) to prepare a safety and repair plan for a failed oil pipeline in Michigan after warning in January the company appeared to be in violation of safety standards because it was not monitoring corrosion in the 41-year-old-pipe.
The order from the U.S. Department of Transportation was sent on July 28 and raises the stakes in an oil spill that sent some 19,500 barrels of crude into a Michigan river.
Separately, the Environmental Protection Agency said on July 29 that the spilled oil did not pose a threat to the Great Lakes since the spill appeared to be contained about 50 miles inland from Lake Michigan by work crews with booms.
In its safety order, regulators told Enbridge that it will have to take a number of precautionary steps before the 286-mile pipeline carrying oil from northern Indiana to Sarnia, Ontario, can be restarted.
Those steps include digging up 100 feet of the failed pipeline in the oil-clogged marshes near Marshall, Mich., submitting a safety plan for its renewed operation and holding pressure to 80 percent of capacity after a restart.
At its capacity, the pipeline flows at a rate of 190,000 b/d.
Enbridge will also have to tell the government regulators how it will monitor and test the pipeline in the future to avoid accidents, and detail every failure along its span for the past two decades.
In January, the Department of Transportation's pipeline regulatory arm had warned Enbridge that it appeared to be in "probable violation" of safety regulations.
It said then that inspectors found that the company had discontinued monitoring corrosion in the pipeline in 2007, and was only in the planning stages of implementing a new method of checking the pipeline using an electrical imaging technology.

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