CALGARY - The National Energy Board has slapped pipeline builder Enbridge Inc. (TSX:ENB) with $264,000 in penalties, with most of that sum stemming from safety and environmental hazards related to maintenance work on an oil pipeline in Manitoba last summer.
An inspection in July revealed numerous problems along a stretch of Line 3 around Cromer, Man. Landowners in the area complained to the NEB about open excavations, improper handling of topsoil and several other concerns.
Line 3 carries crude from Alberta to Wisconsin and has been in operation for nearly a half century. Enbridge announced plans last year to replace Line 3 in its entirety — a $7.5-billion project.
The penalties deal with maintenance work on the existing line, not the larger replacement project, which has yet to receive NEB approval.
Work on the pipeline was ordered halted for more than a month last summer before the federal energy watchdog was satisfied it could continue safely.
The NEB imposed two fines earlier this month each worth $100,000 connected to Line 3. Separately, the regulator also fined the company $64,000 related to design changes made to a storage tank in Regina that were not approved.
Enbridge spokesman Graham White said the company was reviewing the penalties to determine its next steps.
One of the Line 3 penalties was for "failure to ensure that the construction activities do not create a hazard to the public or the environment" and the other for "failure to comply with a term or condition of any certificate, licence, permit, leave or exemption granted under the NEB Act."
On the first, board spokesman Darin Barter said it was mainly an issue of how erosion was dealt with during a period of heavy rains.
"There was flooding at the time and because of the open trench lines, we saw a real hazard in the area," he said.
The second fine was imposed because Enbridge did not follow through on environmental protection commitments it had made, said Barter.
According to details of the penalties provided by the NEB, when work on Line 3 dragged further into 2014 than Enbridge had initially planned, the board asked for an update to the company's environmental protection plan. But Enbridge's response in March "provided inconsistent status statements to what inspectors would later observe on site in July," the board said.
What resulted were "numerous non-compliances observed both on and off the construction (right-of-way) causing environmental damage to wetlands and property damage to a substantial amount of agricultural land."
Barter says the "administrative monetary penalties" are a relatively new measure for the NEB, having started up less than two years ago. The amounts Enbridge has racked up are the highest so far.
"When the NEB grants an approval, we take it seriously and we want to make sure that the company is following all aspects of that approval," said Barter.
"What we're seeing in several of these monetary penalties is the companies making design changes or not following through on their commitments and we take that very seriously and we continue to enforce against that."
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