Michigan oil spill cleanup may exceed insurance -Enbridge
CALGARY, Alberta, March 20
CALGARY, Alberta, March 20 (Reuters) - Enbridge Energy Partners LP said on Wednesday that the costs of additional cleanup from a huge Michigan oil spill three years ago may push the total bill past the limit of its insurance coverage, hampering its financial results.
Enbridge Energy Partners, the U.S. unit of Calgary-based Enbridge Inc, received an order from the U.S. Environmental Protection Agency earlier this month requiring more containment and recovery of oil from its Line 6B, which ruptured in the summer of 2010.
It now estimates the total cleanup cost will rise by $175 million to $820 million. But it warned that "actual costs incurred may differ from the foregoing estimate as we discuss our work plan with the EPA and work with other regulatory agencies to assure that our work plan complies with their requirements."
"Any such incremental costs will not be recovered under our insurance policies as our expected costs for the incident will exceed the limits of our insurance coverage," it said in filing with the U.S. Securities and Exchange Commission.
The incident, near Marshall, Michigan, caused more than 20,000 barrels of heavy Canadian crude to gush into the Kalamazoo River system, the largest onshore oil spill in U.S. history. Line 6B carries 231,000 barrels a day to Sarnia, Ontario, from Griffith, Indiana.
Enbridge Energy Partners said any costs that flow directly to its own financial statements "will cause increased volatility in the partnership's results of operations and cash flows."
The partnership operates the U.S. portion of Enbridge's oil pipeline network, which moves more than 2 million barrels a day to the U.S. Midwest, Midcontinent and southern Ontario from Western Canada.
The Houston-based partnership's shares closed up 52 cents at $29.26 on the New York Stock Exchange on Wednesday, though it released the cost estimate after the market closed. Enbridge Inc owns about 18 percent of Enbridge Energy Partners.
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video