How Enbridge Avoided Local Insurance Regulations

Canadian pipeline company Enbridge will move forward with operating an oil pumping station in Waterloo, Wisconsin—without special insurance—after the Wisconsin Supreme Court ruled in favor of the company in a 4-1 decision, with two justices abstaining.

Enbridge’s Line 61 cuts through the northeastern corner of Dane County. The pipeline brings 400,000 barrels of heavy crude oil from the Alberta, Canada Tar Sands region through Wisconsin every day. Enbridge needed additional pumping stations to reach their goal of tripling the number of barrels per day (bpd). Enbridge Energy, the company that operates the pipeline, hopes to reach a staggering 1.2 million bpd.

In 2014, Enbridge completed construction of a pumping station in Waterloo, Wisconsin. But operation of the facility required a conditional use permit from the Dane County Zoning Committee. The county granted the permit on the condition that Enbridge would carry $25 million in special pollution insurance, which would cover spills.

Line 61 has the potential to cause significant environmental damage, such as the 2010 oil spill in Kalamazoo, Michigan—the largest and most expensive inland oil pipeline spill in the history of the United States—which occurred when one of Enbridge’s pipelines ruptured. One million gallons of Tar Sands oil flooded into the Kalamazoo River, causing environmental damage and more than $1 billion in cleanup. Dane County did not want to take the risk. Enbridge chose to appeal the insurance requirement. Still, it was well within the county’s authority to impose the condition—until Act 55.

Act 55 was a Motion 999, a last minute addition in Wisconsin’s 2015 budget session. This meant that Act 55 was not well-publicized and passed without much input from the public.

Peter Anderson, risk management subcommittee chair of the Tar Sands campaign for the 350 Madison Climate Action Team summed up the problems with Motion 999s. “It’s not required to have any author identified. It’s not required to have any hearing on the issue, and it’s not required to have any separate vote on the amendment,” he stated.

Act 55 was passed only two months after Enbridge’s appeal, before any final decisions had been made. Under Act 55, towns and counties would not be allowed to impose “insurance requirements on an operator of an interstate hazardous liquid pipeline operating company is the pipeline operating company carries comprehensive general liability insurance coverage that includes coverage for sudden and accidental pollution liability.”

Dane County decided to move forward with the insurance requirements regardless on the Act, claiming that Enbridge had not submitted proof of the insurance. The case moved to court, with the 4th Circuit Court of Appeals ruling that Enbridge would be required to show proof of their insurance if they wanted to avoid Dane County’s conditions under Act 55. Enbridge and Dane County both chose to appeal, with Enbridge petitioning to move the case up to the Wisconsin Supreme Court. Wisconsin’s highest court accepted.

A group of landowners, worried about the damage the pipeline could create on their property, had sued Enbridge for not obeying the conditional use permit. Their case was combined with Dane County’s.

“A lot of our property could be really destroyed by an oil leak out of that pipeline,” said Keith Reopelle, one of the landowners. “We just think that it’s important that they have the resources and…have the awareness and responsibility to act.”

Ultimately, the Supreme Court’s conservative majority ruled against Dane County. Four conservative justices sided with Enbridge, one liberal justice sided with Dane County, and two liberal justices abstained. The majority contended that the only obligation was that Enbridge had the insurance when the permit was granted. They did not have to keep the insurance afterwards.

“The Zoning Committee had authority to attach condition to the (permit) to ensure compliance with Dane County’s zoning ordinances and standards,” wrote Justice Rebecca Bradley, who had sided with Enbridge, “but not conditions violative of Wisconsin law”.

“Enbridge is pleased with the decision of the Supreme Court to uphold the Dane County Circuit Court’s decision to strike unenforceable insurance requirements from the (conditional use permit),” stated Enbridge spokeswoman Jennifer Smith.

However, there was also discontent surrounding the verdict.

“This is a blatant political decision and a payoff to large corporations at the expense of taxpayers of this state who can no longer be ensured that the cleanup costs and the kinds of accidents that Enbridge is notorious for, won’t be laid on them to bail out this company,” Anderson claimed, believing that the verdict was a result of corruption.

Patricia Hammel, the attorney for the landowners, lamented the verdict. “We now have no way of knowing whether Enbridge has pollution insurance, because the court has read that requirement out of state law, and no one has seen their insurance policies,” said Hammel. “We mourn the loss of an independent Supreme Court in Wisconsin.”

[Sources: Wisconsin State Journal ; Wisconsin Public Radio; Minneapolis Star Tribune; Milwaukee Journal Sentinel ]

This is excellent reporting!! No, I did not know the pipeline runs through Dane County. Thank you for writing this. – Shoko Miyagi , UW-Madison (2019-11-08 11:09)