As California regulators and Pacific Gas and Electric Co. (PG&E) have found in the wake of what has been termed a preventable fatal pipeline incident, Enbridge Energy Partners LP is learning similar lessons from the National Transportation Safety Board's (NTSB) assessment released earlier this month on the 2010 30-inch diameter oil pipeline rupture and spill in the Kalamazoo River in Marshall, MI. As in the PG&E pipe rupture two months later in San Bruno, CA, the NTSB report clearly pointed to company and regulatory failures.

At an estimated $800 million in costs, the Line 6B failure turned out to be the most expensive onshore oil spill in U.S. history, according to the NTSB. More than 840,000 gallons of crude oil spilled into hundreds of acres of Michigan wetlands.

As such, it can be expected that Enbridge internally and the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) will be pressured to make significant changes in how they approach safety programs in the future. NTSB's report said its investigation of the July 25, 2010 oil line break turned up "a complete breakdown of safety" at Enbridge, adding that the pipeline operator's employees performed like "Keystone Kops," failing to recognize that the pipeline had ruptured.

In response, Enbridge CEO Patrick Daniel said he believed "employees involved in the decisions made at the time of the release were trying to do the right thing. As with most such incidents, a series of unfortunate events and circumstances resulted in an outcome no one wanted."

Separately, PHMSA in a "Notice of Probable Violation and Proposed Civil Penalty" sent to Enbridge July 5 cited 24 alleged violations by the company, calling for fines collectively totaling nearly $3.7 million. PHMSA said the pipeline had failed despite what it described as "a series of in-line inspections that Enbridge had performed on the pipeline in conjunction with the company's integrity management program." The tests had turned up "multiple corrosion and crack-like anomalies on the pipe," but Enbridge failed to conduct any field examination, PHMSA said.

One of a list of 28 NTSB conclusions in its report is that PHMSA "failed to pursue findings from previous inspections and did not require Enbridge to excavate pipeline segments with injurious crack defects."

According to NTSB, Enbridge's Line 6B had been scheduled for a routine shutdown at the time of the rupture to accommodate changing delivery schedules, but following the shutdown, operators in Enbridge's Edmonton, Alberta control room received multiple alarms indicating a problem with low pressure in the pipeline. Those alarms were dismissed as being caused by something other than a rupture.

Thus, "inadequate training" for control center personnel was cited by NTSB as a contributing factor to the accident. In addition, NTSB said its investigation found that Enbridge "failed to accurately assess" the structural integrity of the pipeline, including correctly analyzing cracks that required repair. The federal agency characterized the pipe failure as "an organizational accident," citing deficiencies in the control center, leak detection and environmental response operations at Enbridge.

"This accident is a wake-up call to the industry, the regulator [PHMSA], and the public," said NTSB Chairman Deborah A.P. Hersman. "Enbridge knew for years that this section of the pipeline was vulnerable yet they didn't act on that information." In addition, Hersman accused PHMSA of delegating too much of its authority to the operator.

Enbridge Inc.'s Stephen Wuori, president of liquids pipelines, said that from the beginning of the incident the pipeline operator's intent has been "to learn from it so we can prevent it from happening again, and to also share what we have learned with other pipeline operators." The company has conducted its own "detailed internal investigation," and it has made "numerous enhancements" to internal processes, procedures and training, Wuori said.

Legal analyses by energy law firms watching the pipeline safety sector closely outlined numerous concerns expressed by the NTSB report, including integrity management regulations, procedures and oversight, control center personnel training and public awareness and education efforts. They said the focus is on Enbridge and PHMSA in the near-term, but longer term there are many messages for the industry overall.

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