Pipeline giant Enbridge, Inc., is in a standoff with a Wisconsin zoning committee over the company's plans to vastly increase the amount of tar sands oil pumped through one of its lines.
In an unusual move, the Dane County Zoning and Land Regulation Committee slapped additional insurance requirements on Enbridge before letting it build a new high-capacity pump station along its Line 61.
Boosting pumping power is critical to Enbridge's plan to triple the capacity of the six-year-old pipeline that runs from northern Wisconsin to refineries near Chicago. Adding the insurance is one of few precautions the county can take to prepare for a potential spill on the expanded line.
At its new capacity Line 61 would carry 1.2 million barrels of heavy crude oil from Canada's tar sands region a day—more oil than the proposed Keystone XL pipeline, which has inspired fierce public opposition and debate for seven years.
Enbridge officials say there's no need for additional insurance––and that the county committee overstepped its bounds and crossed into the jurisdiction of federal pipeline regulators by trying to regulate safety operations. The company has asked the county's 37-member board of supervisors to overturn the zoning board's requirement. A June 4 hearing has been set.
"Enbridge's current insurance coverage and our existing insurance policies, as well as Enbridge's overall financial position, are more than sufficient to address the unlikely event of any release on the pipeline system in Dane County," said Enbridge spokesman Michael Barnes.
This flexing of muscle by Dane County is another example of the growing trend of local governments standing up to pipeline companies.
For more than a year the York County, Neb. Board of County Commissioners considered imposing zoning conditions on underground pipelines that would have affected the Keystone XL. Pipeline company ET Rover faced such heavy opposition last year from a few county governments in Michigan that it decided to reroute a gas pipeline to through less densely populated counties.
Enbridge encountered feisty resistance from local governments during its work to replace the aging pipeline 6B, which burst and sent oil into the Kalamazoo River near Marshall, Mich., in 2010.
The cleanup of the Kalamazoo was unusually difficult because the pipeline was carrying tar sands oil, which sinks in water. The effort has cost the company more than $1 billion, exceeding the cap on Enbridge's liability insurance by nearly $600 million and leaving the company to make up the difference.
The lessons learned from the Michigan spill persuaded Dane County zoning officials to impose the insurance requirement, according to Patrick Miles, one of the group's five members.
Although there are no nearby rivers or streams that could be jeopardized by a spill in Dane County, Miles said there are wetlands, farms and open space that would be in danger if Line 61 ruptured. The Democrat-leaning county is home to the University of Wisconsin-Madison and more than a half a million people.
"We've seen the catastrophic consequences of a spill," Miles said. "Because we are tasked with looking out for the public interest and public safety, we wanted to make sure that there was as much protection in place as possible."
Howard Learner, executive director of the Environmental Law & Policy Center, said the county was careful not to impose conditions on the pipeline itself, which would have infringed on federal regulations. "Dane County isn't seeking to regulate pipeline integrity or shut off valves. Dane County is seeking to...make sure there are sufficient insurance funds to clean up if there is an oil spill."
Damon Hill, a spokesman for the federal Pipeline and Hazardous Materials Safety Administration, said a requirement for pollution insurance would not cross the line into the areas governed by his agency.
The policy is a unique approach to satisfying pipeline safety concerns, according to Rebecca Craven, program director for the Pipeline Safety Trust, a nonprofit watchdog organization.
"I'm not aware of any other situations where an insurance policy of this nature has been asked for as a condition of work," she said. "It can be seen as another way by which a local agency can make sure their concerns are addressed."
No Insurance, No Permit
The Dane County zoning committee is requiring Enbridge to obtain a policy that specifically covers environmental damage surrounding the pump station ––in addition to the company's existing $700 million general liability insurance policy. The insurance requirement is among a number of conditions the committee imposed, including repairs to any damaged roadways, a spill containment basin around the pump station and limits on noise.
The unanimous vote April 14 by the non-partisan committee represents the final obstacle to Enbridge's plans to increase the capacity of the 450-mile Line 61, part of an industry-wide push to repurpose and build thousands of miles of pipelines.
The company has obtained the necessary approvals from the 10 other Wisconsin counties and four Illinois counties where new construction or upgrades are planned. The Wisconsin Department of Natural Resources approved the plan in 2006.
The committee settled on the $25 million figure based on a consultant's assessment of the potential damage that could be done by a rupture at the pumping station. The consultant advised the committee that the separate pollution insurance policy would help prevent cleanup delays if Enbridge's general liability policy didn't cover the spill.
The Dane County Board of Supervisors will consider an appeal by Enbridge to overrule the zoning committee in June.
Enbridge has suggested that if the insurance requirement is not repealed, it may take the matter to court.
In a related case in 2012, a federal appeals court in Maryland upheld the authority of local agencies to impose zoning requirements.
The case involved an attempt by a Washington, D.C., gas company to build a liquefied natural gas storage site in the D.C. metro area. Zoning officials in Prince Georges County had denied permits. The land was better suited for housing and open space, they said.
The gas company went to court, using essentially the same argument being made by Enbridge––that federal energy law overrides local zoning rules. The three appeals judges disagreed, saying federal law pertains to safety regulations, and zoning rules are not safety regulations.
What's happening in Dane County, Prince Georges County and in the small townships of Michigan all point to an empowering of local officials, said the Environmental Law & Policy Center's Learner.
"Local governments are more frequently now taking stands to protect the public from damage to natural resources or communities," Learner said. "There's a growing feeling that local government can make a stand on behalf of their citizens."