Company At Center of Michigan Oil Spill Offers to Buy 200 HomesAug 4, 2010 | Parker Waichman LLP
In an effort to stave off lawsuits stemming from last week’s Michigan oil spill, Enbridge Energy Partners is offering to buy dozens of homes along the Kalamazoo River that were impacted by the spill. The company also has pledged to pay all legitimate damages caused by the oil spill.
The oil spill was discovered on the morning of July 26 on a creek near the company’s pump station in Marshall. The 30-inch pipeline is used to move light synthetic, heavy and medium crude oil northeast about 1,900 miles between Canadian and the US.
The rupture spilled more than 800,000 gallons of oil into the creek, which made its way into the Kalamazoo River. The spill also threatened Lake Michigan, 80 miles away. Dozens of homes had to be evacuated due to air quality concerns, and residents living near the section of river where it occurred were advised to use bottled water.
During a briefing yesterday, Patrick Daniel, President & CEO of Enbridge Inc, the Canadian of parent of Enbridge Energy Partners, insisted that “no one has to sue Enbridge to be kept whole. We will pay all legitimate damages to people affected by this spill.”
He said the company was offering to buy as many as 200 homes belonging to people who might have been affected by the accident. Homeowners who had already listed their homes for sale prior to the spill will be offered the listing price, while all others will be offered their appraised value before the spill.
“This is the result of feedback I’ve gotten over the last eight days,” he said. “Some people feel their homes are diminished in value, Daniel said. “We believe if we buy them, we will not lose money.”
According to the Detroit Free Press, Enbridge’s offer covers 61 homes in a voluntary evacuation zone around the spill where benzene levels were high after the spill that health officials asked residents to leave, as well as homes within 200 feet of the Kalamazoo River as far as 30 miles downstream from the spill.
It remains to be seen if Enbridge’s promise of a full cleanup and offer to buy affected homes will limit lawsuits over the incident. Earlier this week, the Great Lakes Environmental Law Centre, a Michigan-based group, issued a notice of intent to file a citizen suit against the Calgary-based company. The group says it will sue for violations of the U.S. Clean Water Act.
In a letter to the company Monday, the group also states that based on the estimated size of the spill, “Enbridge could face fines of over $26 million.”
“And if Enbridge is found to be grossly negligent in its maintenance and operation of the pipeline (especially in light of the numerous warnings issued by federal regulators regarding corrosion of the pipeline), the company could face $100 million in fines,” the law centre said.
The Clean Water Act requires a formal 60-day notice prior to commencing a citizen suit.