Lawmakers want pipeline owners to pay for possible spills, prevention
By Sara Scott
8 June, 2002

LANSING -- On the two-year anniversary of a disastrous gasoline pipeline spill in Jackson County, a pair of lawmakers is pushing to prevent and prepare for such disasters.

Under a two-bill package unveiled Friday, pipeline companies would pay a $20,000-per-mile annual fee on all underground petroleum and crude oil lines. The package also clarifies the role of the Public Service Commission, which provides industry oversight.

"We're concerned about protecting our environment and protecting the health and safety of our children," said Rep. Mark Schauer, D-Battle Creek, a bill sponsor.

If approved, the fee would generate $76 million a year from the roughly 3,800 miles of underground pipeline in Michigan. That revenue would be split evenly between the counties in which pipelines are located and the state, and could be used for prevention or preparation.

For example, a county could create a special team trained for hazardous materials accidents. Meanwhile, the state would use a portion of its money to establish a "victim's compensation fund."

"A family displaced by a gasoline spill shouldn't have to sue or wait months to get compensation," said Virg Bernero, D-Lansing, the sponsor of the second bill. "With this fund they would be reimbursed right away."

The proposed fee will not be embraced by the industry.

Leslie Cole, a vice president of Wolverine Pipe Line Co., said it would cost his company $8 million a year. Wolverine owns 400 miles of pipeline in Michigan, including a section in Blackman Township that burst June 7, 2000, spilling 71,400 gallons of gasoline into the surrounding neighborhood.

"A fee like that would be impossible since we don't even return that much money to our shareholders," Cole said.

Cole said the fund would serve no purpose, since most pipeline companies carry liability insurance to cover the costs of spills or other accidents, he said.

But supporters of the idea call it a "user fee."

"One of the keys to improving regulation is to ensure that there is enough money for oversight," said James Clift, of the Michigan Environment Council. "We're fully supportive of putting the cost of that oversight onto the party involved."

Bernero said he'd be willing to consider lowering the proposed fee or capping it. But the industry has to be held accountable in some way, he said.

"I don't want my constituency -- or any constituency -- going through what the people in Jackson County went through two years ago," he said.

As many as 600 families were evacuated from their homes, though most were able to return after about five days.

The disaster cost Wolverine about $18 million in environmental clean-up and other expenses, including reimbursing families for housing, lost wages, and damage to their homes. The company paid $4 million alone to connect the affected residents to municipal water so they wouldn't have to rely on well water.

But several residents say Wolverine was less than forthcoming and difficult to deal with.

"I had a hard time getting information out of Wolverine, in terms of the exact cause of the leak, their testing history and what is the status of the rest of the pipeline," said Ray Hill, who lives in Stonegate Farms subdivision, one of the affected areas.

Hill formed a citizens group and went to Washington, D.C., to lobby for more oversight and regulation of the industry. Hill said any steps the state can take to tighten regulation "certainly wouldn't hurt."

One of the proposed bills would require the Michigan Public Service Commission to establish safety standards for pipeline facilities. Also, owners would be required to hold a public hearing before constructing a new pipeline.

"The PSC does a good job, but we need to give them more tools," Schauer said.

Mary Jo Kunkle, a spokeswoman for the Public Service Commission, said her office had just received the bills and needed more time for review before weighing in.

Meanwhile, Cole said there is already a significant amount of oversight and regulation, particularly from the federal Office of Pipeline Safety, within the Department of Transportation.

"There really isn't a lack of oversight," Cole said.

Copyright Booth Newspapers 2002
Original Story

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