U.S. Markets open in 2 hrs 21 mins

Regulators OK Michigan oil pipeline replacement

John Flesher, AP Environmental Writer

TRAVERSE CITY, Mich. (AP) -- Regulators granted permission Thursday for Enbridge Inc. to finish replacing the underground pipeline that ruptured and spilled more than 800,000 gallons of oil into a southwestern Michigan river.

The state Public Service Commission approved the last of three permits the company needs to construct the Michigan portion of the $1.6 billion project. The Canadian company plans to replace the entire 286-mile-long pipeline, which runs from Griffith, Ind., to Sarnia, Ontario.

In a news release, the commission said the line "will serve a public need, is designed and routed in a reasonable manner, and meets or exceeds current safety and engineering standards."

The project includes about 110 miles of pipeline 36 inches in diameter and an additional 50 miles of pipeline 30 inches in diameter. It will extend through 10 Michigan counties: Berrien, Cass, St. Joseph, Kalamazoo, Calhoun, Jackson, Ingham, Oakland, Macomb and St. Clair. Additionally, the commission authorized Enbridge to install new facilities at stations along the route.

The company, based in Calgary, Alberta, also is seeking permits to replace a 60-mile section of the line in northern Indiana.

Enbridge says the line replacement is part of plan to boost the flow of oil to refineries that are being upgraded and expanded in the eastern U.S. and Canada through a network that runs beneath portions of Michigan and other Great Lakes states. When completed, the pipeline's capacity will be 500,000 barrels per day, more than double the present daily maximum of 230,000 barrels, the company says.

"In addition, the replacement project will reduce the amount of future maintenance activities that would otherwise be required to maintain the integrity of the pipeline," spokeswoman Lorraine Little said.

Some parts have been replaced since the July 2010 leak into the Kalamazoo River and a tributary called Talmadge Creek near Marshall, about 70 miles southeast of Grand Rapids, which fouled more than 35 miles of waterways and wetlands. About 320 people reported symptoms from crude oil exposure. The cleanup is in its final stages.

Federal agencies ordered Enbridge to pay a $3.7 million penalty and said it had failed to deal adequately with structural problems detected years earlier.

Enbridge says after the new line is installed, existing segments will be purged and filled with an inert gas as required under federal regulations.

The National Wildlife Federation, one of the environmental groups that criticized Enbridge for the spill, said it was disappointed that the Michigan commission approved the permit. While replacing the pipeline is a good idea, the company shouldn't have been allowed to divide the project into segments, which enabled it to avoid a more stringent federal review, said Beth Wallace, the federation's Great Lakes community outreach adviser.

"There would have been more public input as well as a long-term environmental impact assessment" if the federal government were involved, Wallace said.