Enbridge Pushes Off Kalamazoo Penalty Despite Strong Profit
Calgary pipeline operator Enbridge Inc. won a further extension to federal penalties for its actions in the worst on-land oil spill in U.S. history, while posting nearly C$500 million in fourth-quarter earnings.
The 2010 failure of Enbridge’s Line 6B pipeline allowed toxic diluted bitumen to spill for several days, contaminating a 65-kilometre stretch of the Kalamazoo River. An investigation by the U.S. National Transportation Safety Board determined that a “culture of deviance” at Enbridge contributed to its inadequate response. Cleaning up the spill has so far cost the company US$1.2 billion, and state and other federal fines a further US$83 million.
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However the company has resisted paying a fine for violations of the U.S. Clean Water Act. In securities filings, Enbridge disclosed that it has won a second extension of an Environmental Protection Agency deadline to settle a penalty that could be over US$100 million.
It was the second regulatory reprieve in a week for Enbridge: earlier, Canada’s National Energy Board cut C$104,000 from a previously-assessed penalty arising from its Canadian operations.
At the same time, Enbridge CEO Al Monaco conceded that his company’s chances of proceeding this year with its proposed Northern Gateway pipeline from Alberta to tidewater in British Columbia, are “remote.” The completion of other pipelines, however, contributed to $494 million in adjusted earnings for the company’s fourth quarter, exceeding analysts’ expectations.