Michigan Pipelines Under Review

29 Oct 2014

pipeline

Spills from pipelines were very newsy over the last couple of years.  There was the Kalamzoo River oil spill and a number elsewhere.  As with most things, eventually the public and news media tire of it and move on to something else.  A recent Indiana spill into Lake Michigan barely made any news.  Interestingly, this summer, the State of Michigan created a Michigan Petroleum Pipeline Task Force to review issues relating to pipelines transporting petroleum products around the State.  Despite federal jurisdiction by the  federal Pipeline and Hazardous Materials Safety Administration, the Task Force is looking at issues including:

  • Michigan’s emergency management preparedness for spills,
  • Coordination of permitting issues for pipeline upgrades and replacement, and
  • The creation of a state website to serve as an information clearinghouse for residents who have questions or concerns about pipelines.

The Task Force’s members are Co-Chairs: Dan Wyant, Michigan Department of Environmental Quality and Bill Schuette, Michigan Attorney General, and John Quackenbush,  Michigan Public Service Commission, Keith Creagh, Michigan Department of Natural Resources, Jon Allan, DEQ’s Office of the Great Lakes, Kirk Steudle, Michigan Department of Transportation and Col. Kriste Kibbey Etue, Michigan State Police.

As Michigan is looking at pipeline risks and preparedness, so should you.

One of the first things that the Task Force has spent time on is the Enbridge pipeline running under the Straits of Mackinac.  Which, for non-Michiganders is the narrow stretch of water that connects Lakes Huron and Michigan – in other words, part of the Great Lakes (aka 20% of the world’s surface freshwater).  Yes, since 1953, there has been an easement and two oil pipelines running under (effectively) two of the Great Lakes.  After the 2010 Kalamazoo spill, environmental groups started getting traction on this pipeline (see this video).  The University of Michigan conducted a study and concluded that in the event of a spill, “material could be spread as far west as Beaver Island in Lake Michigan and as far southeast as Rogers City in Lake Huron” with impacts to Mackinac Island, Bois Blanc Island, and the Lake Huron shoreline from Mackinac City to Rogers City.  Then, last month, the Coast Guard reportedly acknowledged that it was rushing to develop a plan to address a major Great Lakes oil spill.  Clearly, this pipeline has caught the public’s attention.

While the typical buyer’s Phase I Environmental Site Assessment should identify the presence of an oil pipeline on, under, or across the property, it won’t necessarily flag an oil pipeline as a “recognized environmental condition” unless the pipeline is known to have leaked.  This comes as a surprise to many landowners.  Michigan, like every state, is crisscrossed with natural gas and oil pipelines.  Michigan reportedly has the sixth most miles of pipelines in the Country (which was a surprise to me).   The Free Press published this map of oil pipelines and their leaks; the State has this map of petroleum product pipelines which does not include crude oil, natural gas or liquid petroleum gas (LPG) pipelines.

The job of regulating oil pipelines belongs to the federal government but the federal Pipeline and Hazardous Materials Safety Administration has only 113 inspectors for the entire nation.  Federal rules require companies to inspect oil pipelines every three years – but reportedly there are exceptions for pipelines in lightly populated or non-sensitive areas. That may mean some pipeline segments are rarely, if ever, inspected.  The National Wildlife Federation reports that from 2000 to 2010, Michigan had 61 pipeline “incidents” (9th most in the US).

As Michigan is looking at pipeline risks and preparedness, so should you.  So, what should you do?  If you’re doing a Phase I ESA and a pipeline is reported, you should do further due diligence regarding the pipeline – How old is it?  How was it constructed? Who owns it? What is their track record? What is its inspection record?  What are the terms of the easement allowing its presence?  Maybe you should consider insurance (which will require a lot of data).  This will drive up the cost of the acquisition, but this is where an ounce of prevention may truly be worth many thousands of dollars of cure.  If presented with a request for a new easement, consult your lawyer. We will let you know when the Michigan Task Force completes its work.

Leave a Comment Below

Leave a Reply