July 2, 2012 / 8:12 PM / 5 years ago

Enbridge faces $3.7 million fine for 2010 oil spill

Oil is seen floating on the Kalamazoo river after an oil pipeline leaked oil into the river near Marshall, Michigan July 31, 2010.Rebecca Cook

WASHINGTON (Reuters) - The pipeline regulator on Monday issued a $3.7 million civil penalty against Enbridge Inc for a July 2010 crude oil spill, the largest fine ever proposed by the agency.

The Transportation Department's Pipeline and Hazardous Materials Safety Administration (PHMSA) said its probe uncovered two dozen regulation violations related to the leak on Enbridge's Line 6B near Marshall, Michigan.

"We will hold pipeline operators accountable if they do not follow proper safety procedures to protect the environment and local communities," U.S. Transportation Secretary Ray LaHood said in a statement.

PHMSA's order against Enbridge accuses the company of failing to adhere to regulations for maintaining pipeline integrity.

The agency also said the company continued to attempt to restart the pipeline even though it received multiple leak alarms the night the pipeline ruptured, leading to the release of more oil.

Enbridge's 30 inch line ultimately spilled more than 20,000 barrels of heavy crude and contaminated 38 miles of the Kalamazoo River.

The accident shut down the pipeline for more than two months and spawned a massive clean-up effort that the company has estimated will cost over $700 million.

Enbridge said it is reviewing the PHMSA order.

"We will not comment specifically on the contents of the (Notice of Probable Violation) until that analysis is complete," the company said in a statement.

Enbridge has 30 days to formally respond to the government order.

Reporting by Ayesha Rascoe; Editing by Tim Dobbyn

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