What fines could Enbridge face for its oil spill in Marshall, Mich.?
The size of any fines will depend, in part, on how much oil was spilled when Pipeline 6B ruptured.
The EPA's latest estimate, released on June 7, is that 1,148,229 gallons (or 27,339 barrels) have been recovered since the cleanup began on July 26, 2010.
Enbridge maintains that it spilled only 843,444 gallons (20,082 barrels), an estimate the company hasn't changed since November 2010.
The discrepancy between these numbers matters, because penalties levied under the Clean Water Act are figured on a per-barrel basis.
Enbridge's civil penalties could reach $4,300 per barrel of oil spilled if the government can prove gross negligence under the Clean Water Act. If gross negligence can't be proved, civil penalties could still be as high as $1,100 per barrel. Criminal penalties under the Clean Water Act could be up to twice the losses associated with the spill.
Defining those losses is a gray area because no case law exists, said David Uhlmann, a professor at the University of Michigan Law School and former chief of the U.S. Department of Justice’s environmental crimes section. Losses incurred by victims of the spill and the cost of the cleanup are likely to be counted, but lost revenue to Enbridge would not.
Generally, the government chooses either criminal or civil penalties except in the most egregious cases, such as the Gulf spill, Uhlmann said.
Fines also could be levied against Enbridge under the Pipeline Safety Act. If federal authorities find that the company violated any of the standards set by that legislation, it could face civil penalties of $200,000 per violation per day. At a minimum, the penalties would likely include the days 6B was leaking.
Criminal penalties under the Pipeline Safety Act are similar to those under the Clean Water Act: up to twice the losses associated with the spill. Federal authorities would have to prove knowing and willful violations to levy a criminal fine under the Pipeline Safety Act but only would need to show simple negligence under the Clean Water Act.
The results of the National Transportation Safety Board's investigation of the spill will likely factor significantly into the levying of penalties. That report will be released on July 10, according to the NTSB.
Just as the government isn't required to accept Enbridge's estimate of the number of barrels spilled, neither is Enbridge required to agree to the government's estimate. If the federal government and Enbridge go to court, the number of barrels spilled would be determined at trial.
Uhlmann predicts a settlement, not a trial, is the most likely outcome with this case. If so, the number of barrels spilled and the fine levied per barrel are negotiable. Uhlmann expects the government would insist on its estimate in exchange for a slightly lower fine per barrel.
Enbridge's price tag for the spill is already $765 million, with $650 million covered by the company's insurance. That insurance doesn't cover fines or penalties.
What happened to the oil and debris that was hauled away from the spill site?
Enbridge said it was able to recycle 766,288 gallons (18,245 barrels) of the oil it vacuumed up shortly after the spill. It returned the oil to 6B, which reopened two months after the spill.
Contaminated soil and debris that was collected was disposed of off-site. According to the EPA, so far crews have disposed of 17,109,012 million gallons of oiled water and 187,041 cubic yards of oil-contaminated soil, downed logs and other debris.
The 766,288 gallons of oil that Enbridge recycled—plus the amount of oil the EPA estimates was trapped in the oily water and debris—is how the agency calculated its latest figure of 1.14 recovered gallons.
Was the Oil in 6B Tar Sands Oil?
About 75 percent of the oil that spilled from 6B was a type of dilbit called Cold Lake blend. In an email to InsideClimate News, Enbridge spokesman Jason Manshum made the same argument that CEO Patrick Daniel made shortly after the spill when he spoke with Natural Resources Defense Council reporter Kari Lyderson: That the oil in 6B shouldn't be classified as oil sands crude, which is also known as tar sands crude.
"Oil sands and heavy crude such as Cold Lake are typically blended at the production site with diluent to assist in the transport of the crude," Manshum said. "Cold Lake heavy crude is not located in the oil sands region around Fort McMurray, Alberta and retrieving this crude is done by way of drilling not by open pit mining. It is part of overall formation, but since it's not from the same area, it [is] not typically associated with oil sands crude."
Both the industry and the spill investigation documents say otherwise. The Cold Lake and Fort McMurray regions of Alberta contain separate oil sands deposits that are part of the same general formation. These oil sands are mined for the bitumen, which is classified as either "extra heavy" or "heavy" crude oil under the American Petroleum Institute gravity scale. Once the bitumen is diluted with liquid chemicals, the resulting dilbit is considered heavy crude oil.