Commerce: Enbridge's liability insurance won't cover oil spill
Even at nearly $1 billion, the Minnesota Department of Commerce said Enbridge Energy's Line 3 liability insurance would not cover an oil spill, adding to the department's opposition to the 340-mile long oil pipeline poised to cross Minnesota.
In a filing Friday, Department of Commerce attorney Kathleen Finnegan argued Calgary-based Enbridge's total liability coverage of $940 million would cover some pollution, but fails to cover a crude oil spill.
"In the Department's assessment, the policies do not cover damages from crude oil spills to any significant degree, if at all," Finnegan wrote.
In late June, the five-member Public Utilities Commission unanimously granted the project a certificate of need, but requested Enbridge make additional compliance filings on the parental guarantee for environmental damages, landowner choice program, decommissioning trust fund, neutral footprint program, and general liability and environmental impairment liability insurance.
Specific terms of the liability insurance were not filed as they are "trade secrets," according to the document.
"Coverage terms are insufficient to protect the public interest, and appear designed not to cover most crude oil pipeline spills," Finnegan wrote.
In an emailed statement to the News Tribune on Wednesday, Enbridge spokesperson Jennifer Smith said the company's $940 million will include "sudden and accidental pollution liability" and maintained "Enbridge is responsible for clean-up in the unlikely event of a release anywhere along our pipeline system."
"We disagree with the Department of Commerce's assessment. During the contested case hearing, the Department's own witness acknowledged that Enbridge's insurance program has performed well in the past, and there is no basis for the Department's most recent statements to the contrary," Smith said.
Smith said Enbridge would pay out of pocket for emergency response first, then seek insurance reimbursement.
"Enbridge's response efforts are not contingent on insurance coverage," Smith said.
The PUC will consider the certificate of need modifications at its Sept. 11 meeting, and Commerce has pushed back against some of Enbridge's other proposed modifications too.
In July, Commerce's Division of Energy Resources recommended the PUC not approve the company's decommissioning trust fund, a condition guiding the removal of the old Line 3, because it didn't fit into current law.
In PUC papers filed Wednesday, staff said it was "unclear" which Commerce recommendations Enbridge would accept.
"The Commission may want to ask Enbridge to address this issue first, so there is clarity about which insurance recommendations Enbridge opposes and why before the Commission considers what action to take," PUC staff wrote.
The Department of Commerce has pushed back on the project throughout the process.
In September 2017, the Department of Commerce also determined Enbridge failed to demonstrate that the state needed a new pipeline.
Enbridge still has to obtain a number of permits before construction can begin.
Once completed, the pipeline will carry 760,000 barrels of oil per day across northern Minnesota on its route from Alberta to the Enbridge terminal in Superior. Enbridge began working three years ago to get the project approved.
Though the company maintains the new pipeline is needed to replace the existing and aging Line 3, opponents argue the line contributes to climate change, violates indigenous rights and is ultimately unnecessary.