Enbridge cleans up Michigan oil pipeline leak under shadow of BP disaster
By Lauren Krugel

Canadian pipeline giant Enbridge laboured Wednesday to contain an oil spill in the U.S. Midwest that brought it unwelcome attention in a world that followed for months the much larger BP leak in the Gulf of Mexico.

"We, at Enbridge, are committing to clean up anything and everything that that oil has touched along the way," chief executive Pat Daniel told a news conference in Battle Creek, Mich., where he is overseeing the response to the three-million-litre spill.

The Enbridge leak was smaller by many orders of magnitude than BP's massive blunder in the Gulf of Mexico, which spewed as much as 697 million litres of oil into the Gulf after a drilling rig exploded. But safety in the oil and gas industry has been top of mind in the United States ever since.

Calgary-based Enbridge (TSX:ENB) has mobilized a cleanup effort, saying on Wednesday it had doubled to 300 the number of employees working on the spill that fouled a Michigan river and will set up twice as many barricades in nearby waterways to contain the leaked crude. Crews are starting to dig up the pipe in order to figure out what caused it to leak.

"We're going to double our Enbridge workforce again today and we have sought, and will continue to seek, all expert advice and help as we can get as well in ensuring this leak is properly contained and cleaned up," Daniel said.

Enbridge currently has nearly 4.3 kilometres of boom set up throughout the Kalamzoo River and Morrow Lake in order to keep the oil from spreading.

There is another 9.5 kilometres available, said Steve Wuori, Enbridge's executive vice-president of liquids pipelines.

"We'll be deploying... much of that today to 10 new sites along the river," he told the press conference.

"That will effectively double the number of sites that we have in operation between the point of entry to the Kalamazoo river and Morrow Lake."

Enbridge came under some fire initially from Michigan governor Jennifer Granholm for an "anemic" cleanup effort. But Daniel said he and Granholm had a "very frank discussion" Tuesday night about what steps to take next.

Environmental group Greenpeace on Wednesday occupied an Enbridge office in Vancouver to protest against the company's planned Northern Gateway Pipeline - and highlighting the Michigan spill as a example of what could happen in British Columbia.

"Enbridge is poised to become the BP of B.C.," spokeswoman Stephanie Goodwin said in a statement.

"If Enbridge's Northern Gateway Pipelines project goes ahead, it's not a question of if a spill will happen, but when, where and how large."

A regulatory review is underway into Northern Gateway, which would connect Alberta oil to the British Columbia coast, where it can then be exported abroad. Enbridge says the $5.5-billion project, if built, will open up new markets for oilsands crude, particularly energy-hungry Asian economies.

Aboriginal groups and environmentalists are fighting hard against Northern Gateway, saying tanker traffic along B.C.'s north coast threatens fragile ecosystems there. They also worry a pipeline rupture could endanger northern B.C. rivers, which are key to local First Nations group economy and culture.

The Lakehead pipeline, owned by Houston-based affiliate Enbridge Energy Partners LP (NYSE:EEP), carries 30 million litres of oil daily from Indiana to southwestern Ontario.

The Enbridge leak overshadowed the company's (TSX:ENB) second-quarter earnings release and the announcement of a $682-million acquisition of gas processing assets in the southern United States.

"While we're very proud of our second-quarter financial performance, unfortunately, we are reporting those results at the same time as members of our team are in Michigan doing their utmost to respond to the leak we experienced on the Lakehead System earlier this week," Daniel said in an earlier statement.

Enbridge said its profit for the three months ended June 30 dropped to $138 million or 37 cents per share, down from $393 million or $1.08 per share a year earlier. But Enbridge says it's on track to reach the upper end of its 2010 guidance for adjusted earnings, a benchmark used by many analysts to track profit health.

Second-quarter adjusted earnings, which strip out unusual financial losses or gains, totalled $232 million or 63 cents per share, up from $195 million or 54 cents per share. That beat analyst estimates of 58 cents per share, according to figures from Thomson Reuters.

Enbridge Energy Partners said it is buying the Elk City Gathering and Processing system from Atlas Pipeline Partners in the Texas panhandle region. The price tag of the deal is US$682 million.

Enbridge is known mainly as a major shipper of crude oil, but also has a natural gas distribution business in Ontario and a growing renewable energy presence.

Enbridge shares fell 1.8 per cent, or 92 cents, to $50.63 on the Toronto Stock Exchange Wednesday afternoon.-CP-