16 August 2010

Enbridge CEO Says Spills are an Inherent Risk of Oil Pipelines


In the mid-morning hours of July 26, Patrick Daniel, the president and CEO of Enbridge Inc., was in his Calgary office, preparing for a board of directors meeting the next day when Steve Wuori, a close colleague, walked into the room with unsettling news.

“He said, ‘We have a spill in Michigan,’” Daniel said, referring to Wuori, vice president for liquids and pipelines for Enbridge, “A lot of things started going through my mind. But the first was a great concern.”

In a 30-minute interview with the Kalamazoo Gazette on Saturday, Daniel, who has been at the helm of Enbridge for the past 10 years, spoke about his company’s response to the oil spill, whether  the BP disaster in the Gulf of Mexico brought more attention on his company than it would have if the gulf incident never happened and how this event — one of the largest oil spills in Midwest history — has changed him.

Details of the spill were few and far between on that Monday morning. What the company did know was that the river was running high due to heavy rain in the days prior to the spill.

“We knew that the extent of the spill would be larger than it otherwise might be,” Daniel said. “There was, again, a deep concern and a need to get there as quickly as possible with all of our resources.”

Daniel and Wuori raced home to grab field equipment and pack suitcases. The two then got on an Enbridge jet and arrived in Michigan on Monday evening. Driving on I-94 on his way to the spill site, Daniel could smell the crude oil that at that time was stretching bank to bank on the Kalamazoo River, making its way downstream from the Marshall area.

Daniel then took a brief tour of the spill site in Marshall Township. It was too dark to see the black crude. That would have to be left for the next day, the beginning of one of the most challenging stretches of his professional life.

'Deep concern'
At daybreak on July 27, he flew over the river, noting the volume of oil on the surface of the water. The company estimates that about 840,000 gallons spilled, but the federal government has pegged the amount at more than 1 million gallons.

Patrick Daniel

Age: 63

Hometown: Edmonton, Alberta

Position: President and chief executive officer of Calgary, Alberta-based Enbridge Inc., a job he’s held for 10 years.

Education: Bachelor of Science degree from University of Edmonton; master’s degree in chemical engineering from University of British Columbia; advanced management program at Harvard University.

Personal: Married with two sons.

Enbridge Inc.

    * Enbridge is one of the largest pipeline companies in the world, with 5,500 miles of liquid pipeline and 12,400 miles of natural gas pipeline in the United States. It’s also one of the largest corporations in Canada.

    * Last year, the company grossed nearly $1.6 billion in Canadian dollars.

    * The company expects to have $12 billion in new oil, natural gas and green energy projects online by next year.

“Deep concern is the only was I can describe it,” he said of his first look at the river.

In the days since then, the company has come under criticism from nearly all fronts.

U.S. Rep. Mark Schauer, D-Battle Creek, has opened a formal Congressional investigation into how the spill happened and if Enbridge was not adhering to pipeline safety and operational regulations. A hearing has been set for Sept. 15.

The U.S. Environmental Protection Agency took over emergency operations for the spill early on, citing Enbridge’s slow initial response. The agency has several times rejected the company’s long-term remediation and testing plans for the areas affected by the spill.

Documents from federal agencies charged with regulating pipelines surfaced revealing that regulators had called into question Enbridge’s pipeline integrity maintenance programs on its 6B pipeline, which runs from Griffith, Ind. to Sarnia, Ontario, and on which the ruptured section is located.

Journalists from around the state and nation descended on the area, peppering Daniel with questions at every opportunity and questioning if the company knew of the spill hours before it reported it. Two lawsuits could be filed against the company seeking millions of dollars in damages.

The oil spill killed fish, birds and small mammals. It coated riverbanks and floodplains in tar-like blackness. It made people who live close to the river wary about groundwater contamination, air pollution and reduced property values.

When asked if there would have been such an intense light shone on the company had the BP event had never taken place, Daniel said he doubted it.

“Probably not,” he said. “In the aftermath of BP there is a heightened level of public awareness. The one thing that will be the same is the level of follow-up, not only in the response to the spill but in the level of follow-up on pipeline integrity and remediation.”
Added Daniel, “We’ve always been in compliance with those (maintenance and monitoring) plans.”

Staying here
And he has tried to calm the anxieties of the people most affected by the spill.

After a recent public meeting in Battle Creek, he was surrounded by concerned area residents, calmly answering their questions as many more stood outside the circle, observing him as he spoke in slow, measured tones akin to his management style, which is “transparent and approachable,” he said.

Daniel hasn’t left the area since arriving, and stays in a motel room. He’s met with people almost daily at two community centers the company has opened in Battle Creek and Marshall, in their living rooms and on their front porches.

A few weeks ago, he announced that the company would purchase the homes of those had their houses for sale and live within 200 feet of the river who believed the spill had reduced their property values. So far, three homeowners have stepped forward.

The company has taken 800 claims from people who believe the spill negatively affected them, and will continue to take claims well into the future.

More than 1,000 Enbridge employees and contractors — as well as EPA workers — have contained the oil and began an aggressive cleanup that should last months.

“It may sound surprising, but I’ve been just amazed at how warm and friendly and understating everyone is considering the mess that we made,” Daniel said. “It’s been nothing but support.”

Still, Daniel said he feels no personal guilt for the spill.

“It was an accident,” he said.

He declined to say whether or not any Enbridge employees were or might be disciplined for the spill, citing an ongoing National Transportation Safety Board investigation into the cause of the spill. He was also mum on how much the company has spent so far on cleanup efforts and claims.

The last time Enbridge had a spill of the size in Marshall Township was in 1991, when 630,000 gallons of oil spilled from a pipeline near Grand Rapids, Minn. Daniel insists that Enbridge’s reputation in the pipeline industry has not taken a hit as a result of the July spill.

“Our reputation in terms of our response has been very much validated,” he said. “We are an honest, approachable and transparent company.”

Emotions run high
What has Daniel learned over the past several weeks from the people, the river and the inherent risks that are always there with pipeline operations, no matter how prepared a pipeline company is?

At the moment, no one personal take-away is lodged in his mind.

“It’s something I’ll have to reflect on as time passes,” he said.

But that’s not to say that he hasn’t been personally moved by the stories he’s heard about how the oil that spilled from his company’s pipeline has devastated areas and soiled cherished memories.

“Often the meetings started with anger, which is appropriate, and a lot of emotion,” he said. “Emotion that we have disrupted their lives and in some cases their landscapes. Maybe it was a favorite tree. Maybe it was a memory of the river and it being quiet, peaceful.”

If there is one thing that the people of the region have learned about the oil spill, it’s that there are pipelines beneath their communities, near their waterways and close to some of their homes.

That’s a reality that exists in the modern industrialized world, Daniel said, but not one he takes lightly.

“The value and importance of energy to society is so critical,” he said. “We all wish that we didn’t have to have pipelines. And we all wish that we didn’t have to experience accidents. We must remain vigilant.”

Daniel is an avid outdoorsman. He’s a hiker, a mountain climber and an avid fly fisherman, spending much of his time outdoors in the Canadian Rockies, near Calgary, and where he’s climbed several mountains.

He’s told people in the area affected by the spill that once he leaves and the river makes its comeback, he plans on returning to the area to share it with them in a way that it was meant to be enjoyed.

“I’ve told people I’d like to drop in a dry fly into the water and see what I can find,” he said. “I’d like to go fishing with them.”

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