LANSING -- Michigan environmental groups are raising new concerns that an oil spill from Enbridge's Line 5 tunnel project could cost taxpayers tens of millions of dollars.
According to a 2018 agreement, Enbridge would transfer ownership of the tunnel onto the state of Michigan once completed. The tunnel would then be leased to Enbridge for 99 years.
"That means that Michigan taxpayers -- not Enbridge -- could be responsible for the catastrophic for the catastrophic cleanup," said Sean McBrearty, coordinator for Oil and Water Don't Mix. "Water system repairs, tourism losses, public health emergencies, and multi-billion dollar infrastructure disruptions, if something goes wrong."
While the tunnel project still hasn't received final approval from regulators, the groups said in a report that they're concerned the transfer could create a liability for Michigan taxpayers.
"Even with Enbridge's existing insurance and the federal trust fund combined, less than 40% of a conservative $5 billion spill scenario is covered," McBrearty said. "That leaves over $3.6 billion in risk on Michigan taxpayers."
Studies have estimated the impact anywhere from hundreds of millions to tens of billions of dollars based on a spill's severity.
The damage could impact tourism, natural resources and the availability of fresh water for Northern Michigan communities.
Andy Buchsbaum is an attorney for the Great Lakes Business Network.
He says member companies like Bell's Brewery and Cherry Republic would struggle to deal with the damage.
"A leak would decimate their businesses, as it would devastate the Great Lakes," Buchsbaum said. "Contamination of up to 700 miles of shoreline, ruination of Michigan's reputation and pollution of the water that's needed for cherries and beer and other products."
Enbridge spokesperson Ryan Duffy pushed back, saying the company would take on any costs associated with a potential spill.
"Enbridge has the financial strength, resources, and proven track record to take full responsibility for all aspects of our operations -- including incident response and clean-up, should they ever be needed," he said in a statement.
Enbridge's 1953 easement with the state requires the company to pay for damages "due to or arising out of the operations or actions of" the Line 5 pipeline.
The 2018 agreement requires Enbridge to maintain $1.9 billion that could be used in case of a spill or other emergencies.
"Enbridge provides the state of Michigan with detailed financial filings and certified assurance that we have the ability to cover all costs in the unlikely event of an incident at the straits," Duffy said. "This process ensures -- and guarantees -- that taxpayers would never bear the burden for any costs that fall under Enbridge's responsibility."
The tunnel project is still being considered by state and federal authorities. A final environmental impact statement from the Army Corps of Engineers could come early next year.