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State of Michigan announces $75 million settlement with Enbridge over Kalamazoo River oil spill

May 13, 2015

Today, the state of Michigan announced a settlement with Enbridge Energy over the largest inland oil spill in American history.

The state’s $75 million consent judgment with Enbridge won’t be coming as a huge cash payment. Most of the money has already gone to, or will be going to river restoration or recreation projects along the Kalamazoo River.

The state will receive a $5 million dollar “mitigation payment” as part of the settlement.

You can read the consent judgment here.

Here’s how the $75 million settlement with Enbridge breaks down:

Money already spent by Enbridge:

  • $18 million spent by Enbridge to remove the Ceresco Dam and restore the historical flow to that part of the river.
  • $10 million spent to construct and improve recreational and boating access sites for the public at five locations and provide an endowment for perpetual maintenance of these sites.
  • $12 million paid in reimbursement of the state’s costs in conducting and overseeing cleanup work, restoration and mitigation, and attorney’s costs.

Money to be spent by Enbridge:

  • $5 million "mitigation payment" to the state for additional enhancement and restoration of the Kalamazoo River, to be paid within 30 days of the entry of the agreement.
  • $30 million as estimated costs for Enbridge to restore or construct 300 acres of wetlands in the watershed for permanent protection.

This settlement with Michigan closes another chapter in the long story of the 2010 Kalamazoo River oil spill.

It’s been almost five years since Line 6B ruptured near Marshall and polluted Talmadge Creek and 38 miles of the Kalamazoo River with heavy crude oil from the Alberta tar sands region.

Jim Hensley says he was here in Marshall, at his favorite fishing spot, the night the pipeline ruptured on July 25, 2010.

Watch below as he explains what he saw:

Hensley got back out on the river a couple days after it was reopened to the public in 2012. He says the river is getting better.

“It took a little bit to start hearing the frogs,” Hensley says. “Birds - they’re all back, frogs are back, the turtles are back.”

Time and work

It’s taken a ton of work to get this river where it is now, and it hasn’t been cheap.

Enbridge says it’s paying $1.21 billion in cleanup and settlement costs. That figure includes the state’s settlement filed yesterday afternoon in Calhoun County Circuit Court.

“Now that we have reached a settlement with the state it comes after four plus years of hard work and dedication by Enbridge and all the responding agencies,” says Enbridge spokesperson Jason Manshum.

But the work is not quite done. Most of the oil has been cleaned up, and a lot of restoration work is completed, but there’s still some oil that will be left behind.

State officials say they’re confident the oil left behind is minimal. They say they'll oversee monitoring of these spots to find out whether there are any long-term health concerns associated with leaving this oil behind, and they’re confident the spots where the oil is found is in places people won’t see. 

A trip down the river

We took a canoe trip on the Kalamazoo last week to see how things are looking. 

Mark Ducharme is with the Michigan Department of Environmental Quality.

“We do know there’s oil that’s left in the system, in the banks in some spots, it’s left in the sediment in the bottom of the river,” says Ducharme. “It’s a little bit of oil, it truly is residual, but it’s understanding because we can’t recover that oil, is it going to present a problem long term?”

Residual oil bubbles to the surface in a wetland next to the Kalamazoo River.
Credit Mark Brush / Michigan Radio

Ducharme stopped next to a wetland with a stream running through it. He stirs the sediment with his paddle and a little oil sheen rises up.

“This is one of the areas where there’s probably more oil here than just about any area up and down the river system,” he says.

Ducharme says this is a unique wetland area, and they didn’t want to destroy the wetland to remove the oil, so they decided to leave it.

Under the settlement, Enbridge will have to monitor sites like this, and the state can make them go back in and remove more oil later on.

As we mentioned above, the settlement includes $18 million Enbridge spent to take out Ceresco Dam and restore that part of the Kalamazoo River to a more natural state.

This time lapse video shows that stretch of river as it is now:

The settlement also includes money for parks and boating access; money to reimburse the state for its cleanup costs; and $30 million dollars to restore wetlands.

"We really were focused on having the investment Enbridge is making go into the river."

Nicole Zacharda is an enforcement specialist with the DEQ.

“I think people hear $75 million and think that should be cash to the state. We really were focused on having the investment Enbridge is making go into the river.”

So is this a good deal for the state?

Noah Hall, an expert in environmental and water law with Wayne State University, says the answer to that question depends a lot on how you look at things.

“On one hand, Enbridge is being asked to pay very little in terms of additional penalties above and beyond the damage they caused. On the other hand, because Enbridge’s oil spill contaminated the Kalamazoo River, they’ve already had to pay far more than would be typical after an oil spill to remediate the public resource.”

"...this does not seem to be penalizing Enbridge."

Hall says state regulators typically aren’t in the business of punishing companies when enforcing their environmental laws. These types of settlements, he says, are much more about cleaning up and improving upon a public resource that was damaged.

“I think the state would phrase this is as giving Enbridge the opportunity to clean up and leave it a little better than they found it,” Hall says. “But this does not seem to be penalizing Enbridge.”

Enbridge is still negotiating settlements with the Environmental Protection Agency, and with federal, state, and tribal representatives for damages it caused to natural resources in the state.

Hall expects the company will get hit with heavy payments in these upcoming settlements.