August 11, 2010 / 1:02 AM / 9 years ago

Regulator rejects Enbridge pipeline restart plan

CALGARY, Alberta (Reuters) - A U.S. regulator on Tuesday rejected Enbridge Inc’s plan to restart a pipeline that spilled oil into a Michigan river system, adding further uncertainty about how soon it will resume service.

Cleanup workers prepare to secure absorbent booms on the Kalamazoo river after an oil pipeline leaked oil into the river near Marshall, Michigan July 31, 2010. REUTERS/Rebecca Cook

Enbridge, which ships most of Canada’s crude exports to the United States, said it filed its plans with an agency of the U.S. Department of Transportation late Monday as it repaired the 190,000 barrel a day Line 6B pipeline that ruptured last month.

But the agency, called the Pipeline and Hazardous Materials Safety Administration, said it “found that the plan did not adequately provide for a safe restart of the pipeline and lacked sufficient technical details to conclude that no immediate threats are present elsewhere on the line.”

It added that it “will not approve any restart plan that does not include excavating and exposing additional pipe and repairing or replacing additional pipe as necessary.”

The ruling is key as the agency must sign off on the proposed measures before the line can resume flowing crude to refineries in Michigan, Ohio, Pennsylvania and Southern Ontario.

The July 26 pipeline break near Marshall, Michigan, caused 19,500 barrels (800,000 gallons) of heavy Canadian crude oil to leak into the Kalamazoo River system, forcing a cleanup effort that has involved more than 1,000 workers and tens of thousands of feet of containment and absorbent boom.

The spill arguably gained increased attention against the backdrop of the much bigger BP disaster in the Gulf of Mexico.

Line 6B, part of Enbridge’s 1.7 million bpd Lakehead system, runs to Sarnia, Ontario, from Griffith, Indiana.

At least three refineries in the U.S. upper Midwest have been forced to cut output due to a shortage of supplies since the pipeline was taken out of service.

Refiners in the Sarnia area have sought alternative crude sources on other pipelines and made other arrangements to keep their plants running at normal rates.

The shutdown of the pipeline has added pressure to prices for Canadian heavy crude, market sources say.

Shares in Enbridge rose 21 Canadian cents to C$51.83 on the Toronto Stock Exchange on Tuesday. Its U.S. affiliate, Enbridge Energy Partners, fell 77 cents, or 1.3 percent, to $56.60 in New York.

($1=$1.03 Canadian)

Reporting by Jeffrey Jones; Additional reporting by Jeffrey Hodgson; Editing by Richard Chang

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