Pipeline insurance spews out lawsuit

Wording around insurance obligations associated with oil pipelines has now spawned a civil action

Pipeline insurance spews out lawsuit

Insurance News

By Lyle Adriano

Due to the continued inclusion of permit language that requires spill insurance—despite a new state law disallowing such a requirement—Enbridge Energy is suing Dane County.

The Canadian oil pipeline company is building a tar sands oil pumping station in the area. The company, however, was demanded by the county to secure $25 million in an Environmental Impairment Liability Policy, despite state law discontinuing the requirement.

In the lawsuit filed by the company, Enbridge contended that the spill insurance was levied against them “for political purposes,” citing that the Dane County Board’s members and the Zoning and Land Regulation Committee are against the company’s expansion of Line 61.

Once extended, Line 61 will carry Canadian tar sands oil from Superior to northern Illinois.

“The fact that the county cannot enforce those requirements under state law is irrelevant . . .  The ZLR Committee simply flouted the newly enacted Wisconsin law as an exercise of its will rather than its authorized judgment because it is dissatisfied with the new law, which is an abuse of its authority as a matter of law,” the lawsuit stated.

The lawsuit was filed in Dane County Circuit Court.

In July, state legislature included language in the state budget that forbids spill insurance and other similar requirements. Yet on Sept. 29 the county zoning committee voted to restore the prerequisite.

Enbridge was granted a conditional use permit to build a pumping station in Medina.

Although the provision is unenforceable since the conditional use permit “as revised leaves open the possibility that Enbridge could potentially be in violation of the CUP in the future,” a spokesperson for the company said that the lawsuit was still a necessity.

Sharon Corrigan, County Board Chairwoman, remarked that the board left the insurance prerequisite in the permit in the event a future change in legislature occurs.

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