Enbridge Uses “Trade Secret” Tag to Hide Inadequate Spill Insurance; Honor the Earth Tries to Bring it to Light

Honor the Earth filed a motion with the Minnesota Public Utilities Commission Thursday to force Enbridge Energy to disclose the details of the insurance it holds to clean up any potential crude oil spills in Minnesota. Enbridge has kept the information hidden, claiming it is a trade secret. It seems more likely the argument is a ruse to avoid public scrutiny of its inadequate coverage.

Here’s the background: The Minnesota Public Utilities Commission (PUC) voted June 29, 2018, to approve construction of the Enbridge Line 3 tar sands crude oil pipeline through 340 miles of northern Minnesota. (The vote was a bitter disappointment to water protects and those concerned about Minnesota’s pristine lands and indigenous rights.)

The PUC added five requirements to the Line 3 approval. For one, Enbridge has to prove that it has acquired and will maintain General Liability and Environmental Impairment Liability insurance policies as proposed by the Minnesota Department of Commerce — a guarantee that it could pay for clean up in the event of a major spill.

Enbridge’s 2010 Kalamazoo spill has cost more than $1 billion to clean up. What if this kind of spill happens in Minnesota? (Photo: U.S. Environmental Protection Agency)

Enbridge filed its proposed insurance coverage with the PUC in July; the Department of Commerce wasn’t impressed. (See “Commerce: Enbridge’s Oil Spill Insurance Inadequate for Line 3 and Mainline System,” Aug 13, 2018).

While Commerce and Enbridge have gone back-and-forth about the insurance issue, the public has been left in the dark. Enbridge’s claim that the insurance policy is somehow a trade secret and “non public” has led to large gaps in the paper trail.

Contradictory Information

At issue are the insurance policies “exclusion clauses,” the policy language that clarifies what kinds of damage the policy does and does not cover.

As part of its public testimony during the Line 3 hearings, an Enbridge witness said that the company’s general liability insurance policy does not have an “absolute pollution exclusion,” according to Honor the Earth’s filing.

Now consider the language in the Minnesota Department of Commerce’s Aug. 10 filing:

The Department concludes that Enbridge’s current GL [General Liability] insurance coverage applicable to the Enbridge U.S. Mainline System and, potentially, a new Line 3, include significant exclusions for insurance coverage related to damages caused by a crude oil spill. Enbridge’s current policies with the exclusions will not comply with the terms and conditions in the Department’s insurance recommendations. Therefore, the policies will not meet the CN [Certificate of Need] conditions required by the Commission in its oral decision on June 28 as to the proposed Project.

So what is the nature of the exclusion clause(s) in Enbridge’s insurance? Not “absolute” but “significant”? This is confusing.

Honor the Earth is asking the PUC to overrule the trade secret argument and let Minnesotans decide for themselves whether or not the state has adequate protection to clean up a major spill. Among Honor the Earth’s arguments: “Any Insurance Terms that Limit Insurance Coverage for Oil Spills Are Contrary to the Commission’s Insurance Requirements and Should Not Be Considered Trade Secrets.”

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