Enbridge says pipeline system safe despite U.S. concerns

CALGARY, Alberta Fri Aug 3, 2012 9:11pm EDT

Greenpeace protestors begin the cleanup of a simulated oil spill outside the Enbridge oil pipeline offices in Vancouver, British Columbia June 13, 2012. REUTERS/Andy Clark

Greenpeace protestors begin the cleanup of a simulated oil spill outside the Enbridge oil pipeline offices in Vancouver, British Columbia June 13, 2012.

Credit: Reuters/Andy Clark

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CALGARY, Alberta (Reuters) - Enbridge Inc, whose pipelines ship the bulk of Canada's oil exports to the United States, defended the record of its system on Friday after a U.S. regulator said it had concerns about the safety of the operation following a series of spills.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) has refused to allow Enbridge to reopen its 318,000 barrel per day Line 14 after a rupture spilled 1,200 barrels of oil into a Wisconsin field a week ago.

After a series of spills, including a 2010 rupture that dumped more than 20,000 barrels of crude into a Michigan river system, the regulator is demanding Enbridge prove that its 1,900 mile (3,060 kilometer) Lakehead pipeline system is safe before it resumes shipments on the line.

Despite PHMSA's concerns, Enbridge says the number and size of spills from pipelines have decreased over the past decade and that, despite its high-profile accidents, the company's record is good.

"Over the last decade we've transported almost 12 billion barrels of crude oil with a safe delivery record better than 99.999 percent," Al Monaco, Enbridge's president, said in a statement. "That's good, but for us, it's not good enough. We will never stop striving for 100 percent."

In a rarely used amendment to a Corrective Action Order issued on Wednesday, PHMSA said it has concerns about what it called "a pattern of failures" on Enbridge's system over the past several years and demanded the company present a comprehensive plan, overseen by an independent third party, to improve its operations.

Enbridge handed in the plan yesterday but said PHMSA has yet to offer a response.

The company said it will spend C$800 million ($800 million)this year improving the safety of its pipeline network, twice what it spent in 2011.

"Over the past two years we have doubled the number of staff dedicated to leak detection and pipeline control systems, and substantially strengthened our focus on the tools, technologies and strategies to ensure the fitness of our pipelines," Monaco said.

Enbridge shares were down 16 Canadian cents at C$39.74 early on Friday afternoon on the Toronto Stock Exchange.

(Reporting by Scott Haggett; Editing by Peter Galloway)

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