Enbridge insists pipe safety regimen is working

Thu Aug 2, 2012 3:39pm EDT
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Enbridge Inc insisted on Thursday its quick response to a U.S. oil pipeline leak last week showed that safety improvements implemented after a devastating 2010 spill in Michigan were working, despite sharp criticism from regulators.

Enbridge, which reported a 7 percent increase in adjusted second-quarter profit, said it was still uncertain when it could reopen the line.

The Canadian pipeline company is under growing pressure from the public, its oil-shipping customers and now investors to show improvements in its safety record following last Friday's leak of its Line 14 in rural Wisconsin.

The U.S. Pipeline and Hazardous Materials Safety Administration issued a corrective action order this week requiring 12 safety measures, tests and analyses Enbridge must undertake before it can restart the 318,000 barrel a day pipeline. It leaked more than 1,000 barrels from a break measuring more than four-feet in the latest of several incidents.

The massive Enbridge pipeline system moves most Canadian oil exports to the United States.

On a conference call to discuss the results, executives said heightened attention to pipeline leaks is driven more by the debate over Canadian oil sands development and Enbridge's contentious C$6 billion ($6 billion) Northern Gateway pipeline to Canada's West Coast than by Enbridge's own safety record.

Still, much of the call focused on the Line 14 leak and other incidents, as analysts and investors grow more concerned about the increased regulatory scrutiny and other ways that the issue is clouding Enbridge's business prospects.

INVESTORS WARY   Continued...

 
Enbridge Inc. CEO Patrick Daniel speaks during their annual general meeting for shareholders in Toronto May 9, 2012. REUTERS/Mark Blinch