Aug. 16--Enbridge's insurance coverage for oils spills is deficient and doesn't comply with conditions required for the company to build its new Line 3 pipeline, according to the Minnesota Department of Commerce.
Enbridge's insurance policies should include language "that provides clear and unambiguous coverage for damages arising out of crude oil spills," the Commerce Department said in a recent filing with the Minnesota Public Utilities Commission (PUC).
The department represents the public interest in matters before the PUC, which approved the controversial Line 3 project on June 28. Before construction can begin, Calgary-based Enbridge must get several other state and federal permits and meet conditions set out by the PUC.
One of those conditions involves adequate insurance and other financial guarantees to cover oil spill damages. The Commerce Department concluded that Enbridge's current general liability policies for its entire U.S. mainline oil pipeline system, which would include new Line 3, has "significant exclusions for insurance coverage related to damages caused by a crude oil spill."
With those exclusions, Enbridge's insurance policies will not meet the conditions required by the PUC when it granted Enbridge a "certificate of need" for the pipeline in June, the Commerce Department said in a PUC filing.
The Commerce Department's filing implies that insurance coverage deficiencies apply to Enbridge's entire corridor of six pipelines that run across northern Minnesota to Superior, Wis.
Enbridge said in a statement that its insurance coverage includes oil spill liabilities, with an aggregate limit of $940 million. "Unfortunately, the Department of Commerce failed to articulate any specific deficiencies in Enbridge's general liability insurance program. ... We look forward to better understanding the Department's position on this matter in due course."
The $2.6 billion pipeline would replace Enbridge's existing Line 3, which is corroding and operates at only 51 percent capacity due to safety concerns. New Line 3 would run along Enbridge's existing corridor to Clearbrook, Minn., then jut south toward Park Rapids before heading east to Superior.
Environmental groups and Indian tribes who oppose the pipeline say the proposed route opens up a new region of lakes, rivers and wild rice waters to environmental degradation from any oil spill.
Enbridge's pipelines transport oil from Canada to Superior, where it's distributed to several other states.
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