* Enbridge had been warned by US in January on safety

* US regulators demand detailed plan before restart

* Officials say Lake Michigan not at risk from spill (Recasts with corrective order from US regulators, earlier warnings to Enbridge from regulators, Enbridge comment)

DETROIT, July 29 (Reuters) - U.S. regulators have told Canada's Enbridge ENB.TO to detail a safety and repair plan for a failed oil pipeline in Michigan after warning in January the company appeared to be in violation of safety standards because it was not monitoring rust in the 41-year-old-pipe.

The order from the U.S. Department of Transportation was sent on Wednesday and raises the stakes in an oil spill that sent sent some 19,500 barrels of crude into a Michigan river.

Separately, the Environmental Protection Agency said Thursday that the spilled oil did not appear to be a threat to the Great Lakes since the spill appeared to be contained about 50 miles inland from Lake Michigan by work crews with booms.

The Enbridge spill follows the devastating BP Plc BP.L spill in the Gulf of Mexico and has been watched with concern in part because of its threat to Lake Michigan, part of the largest supply of fresh water on the planet.

In its safety order, regulators told Enbridge that it will have to take a number of precautionary steps before the 286-mile pipeline carrying oil from northern Indiana to Sarnia, Ontario can be restarted.

Those steps include digging up 100 feet of the failed pipeline in the oil-clogged marshes near Marshall, Michigan, submitting a safety plan for its renewed operation and holding pressure to 80 percent of capacity after a restart.

At its capacity, the pipeline flows at a rate of 190,000 barrels a day.

Enbridge will also have to tell the U.S. government how it will test the pipeline in the future to avoid accidents and detail every failure along its span for the past two decades.

In January, the Department of Transportation’s pipeline regulatory arm had warned Enbridge that it appeared to be in “probable violation” of safety regulations.

It said then that its inspectors had found that the company had discontinued monitoring of corrosion in the pipeline in 2007 and was only in the planning stages of implementing a new method of checking the pipeline using an electrical imaging technology also used in mining.

‘A HUGE JOB IN FRONT OF US’

Enbridge, which ships most of Canada’s oil to the United states, said on Thursday it was working to dig up the damaged section of the oil pipeline.

That is the first step toward repairing the 30-inch diameter pipe along the Talmadge Creek near Marshall.

Enbridge Chief Executive Patrick Daniel said the company was convinced that the was “no further oil leaking,” but he declined to give an estimate of when the repair work would be done and the pipeline would be cleared to resume operation.

“We have a huge job in front of us. There is no doubt about that,” he said.

Enbridge said it had tested the failed section of the pipeline for corrosion and cracking in 2009. The area that leaked had not been identified out for repair, it said.

EPA officials overseeing the cleanup of an estimated 820,000 gallons of oil hoped to contain the damage at Morrow Lake, just east of Kalamazoo.

“We do not anticipate that Lake Michigan is at risk,” Ralph Dollhopf, the on-scene coordinator for the EPA told reporters.

Tom Sands, a Michigan state police captain overseeing Michigan’s emergency response, said he had seen what appeared to be oil floating on the surface of Morrow Lake and challenged the EPA’s account of its success.

“I saw the sheen. I photographed the sheen,” he told reporters. “Did I test it? No.”

Sands said he had reported to Michigan Gov. Jennifer Granholm that the early response to the spill appeared to be “wholly inadequate” to prevent the oil from heading further down the Kalamazoo River system toward Lake Michigan.

“This is a serious situation and we need more resources,” he said.

Granholm has declared a disaster for the area along the Kalamazoo River.

Local health officials said residents in about 100 homes along the Kalamazoo River near Battle Creek, Michigan had been warned to stop using their tap water because of fears of contamination from oil seeping into their wells.

Residents from another 50 houses near the worst of the pooled oil were being asked to evacuate because of the health risk from fumes.

Oil refineries that use crude from the pipeline have four to five days of stored supply, Daniel said, and are served by other pipelines.