Houston-based Enbridge Energy Partners LP plans to invest $1.75 billion and generate up to 528 construction jobs - much of it in Southeast Michigan - to install more than 250 miles of pipe and replace the line that ruptured in a 2010 oil spill.
Enbridge (NYSE: EEP), co-owned and managed by Calgary-based Enbridge Inc., applied earlier this month to the Michigan Public Service Commission for siting authority to install 50 miles of pipe to replace its Line 6B from Ortonville through Oakland and Macomb counties to Marysville in St. Clair County. Another 110 miles of pipe would be installed in parts of central and southwestern Michigan, allowing Enbridge to retire the existing Line 6B pipe from Griffith, Ind., to Sarnia, Ontario.
The company also has a separate application pending for a proposed Line 79, which will run through part of Washtenaw County and connect with other lines that deliver crude oil to the Marathon Petroleum Co. LP refinery in Detroit.
Enbridge hopes to begin construction in July and have all of the new Line 6B and Line 79 in place by September 2013.
Mark Sitek, vice president of major projects execution, estimates in the company's application documents that the Line 6B project will generate 528 construction jobs and $108 million in economic impact in 2013, and an indirect creation of up to 1,537 jobs through 2021.
Line 6B ruptured in July 2010 and spilled about 850,000 gallons of oil that seeped into Tallmadge Creek and on into the Kalamazoo River near Marshall, in Calhoun County. But Enbridge consultant and project representative Joseph Martucci said the replacement project is unrelated to the spill.
"What's always ongoing is the needs of shippers (Enbridge customers), which change with the market. Within these markets we are responding to the indications from shippers of greater oil demand and capacity at refineries," Martucci said. "It's less disruptive to the environment and less maintenance to do one major project to address it."
Line 6B transports predominantly heavy crude oil from tar sands deposits in western Canada to eight refineries, including the Marathon facility in Detroit. Two other refineries are in Toledo, four in Ontario and one in Pennsylvania. Enbridge also delivers oil to various producers and market buyers of oil.
The new line will run along the existing 6B, and the company expects counties and local governments will reap at least $23 million in new tax revenue over a decade.
Enbridge has been operating the pipeline at 80 percent of the pre-spill pressure under a September 2010 corrective action order by the Pipeline and Hazardous Materials Safety Administration, an agency of the U.S. Department of Transportation.
That leads to a current transport capacity of 243,000 barrels per day. When the project is complete, it will be able to deliver more than 400,000 barrels of oil a day, Martucci said.
Copyright 2012 Crain Communications. All Rights Reserved.
(Originally published April 30, 2012, in Crain's Detroit Business.)