Enbridge responds to state report alleging the company could not be required to pay for a spill

Nov 6, 2019

State officials and Enbridge Energy continue to spar over whether the company is legally bound to pay for cleanup of a potential oil spill in the Straits of Mackinac.

Last week, the Michigan Attorney General released a report which found it was a subsidiary of Enbridge that signed an agreement with the state in 2018, meaning that if a spill were to occur the company could not legally be required to pay for cleanup.

The report went on to say that while Enbridge has the financial holdings to clean up a spill, it’s not clear whether their US subsidiary does.

Ryan Duffy is a spokesperson for Enbridge. He said the 2018 agreement is clear.

“I think if you look at the agreements we made with the state they are clear that any financial assurances can be met by the parties that are signing or their parent company. That’s laid out in the agreement.”

Duffy pointed to a section of the 2018 agreement with the state which he said makes this clear:

 “Enbridge nonetheless agrees that, so long as it continues to operate the Dual Pipelines, the Enbridge entity or entities that own and operate Line 5, or the parent companies of such Enbridge entity(ies), will maintain in force financial assurance mechanisms that meet or exceed the $1,878,000,000 estimate of Enbridge’s potential total quantifiable response liability for a worst-case discharge from the Dual Pipelines that is identified in the Independent Risk Analysis.”

According to Duffy, the report mischaracterizes the relationship between Enbridge and its subsidiaries.

“Federal law actually imposes an obligation on the responsible party for an incident to pay all costs for cleanup, restoration, and remediation,” he said. “We would do that in part because we are required but also because it’s the right thing to do.”

And, Duffy said, Enbridge’s subsidiaries do have the financial holdings to cover a potential spill.

“The subsidiaries that signed the 2018 agreements with the State of Michigan, including Enbridge Energy Partners L.P. , all do business in the U.S. and own billions of dollars of assets in the U.S., more than enough to cover any risk and the assurances made to the State.”

Officials with the office of the Attorney General disagreed, saying the Canadian parent company is not legally bound by the 2018 agreement and the US subsidiary has not documented its own financial ability to cover a spill.

In a written statement Duffy wrote that  “If the State has any concerns about Enbridge’s financial assurances, Enbridge stands ready to discuss and address those concerns as soon as the State is ready to convene discussions.”