WASHINGTON—The most expensive oil pipeline spill in U.S. history could have been prevented if the pipeline operator had repaired known defects on the line, a federal agency said on Tuesday after a two-year investigation of the spill.

The accident occurred near Marshall, Mich. on July 25, 2010, when a ruptured pipeline owned by Enbridge, Inc. sent more than one million gallons of diluted bitumen (crude oil from Canada's tar sands) into the Kalamazoo River and surrounding wetlands. Cleanup of the river is ongoing, and total costs have reached more than $800 million.

The National Transportation Safety Board concluded that Enbridge's integrity management program—the system used to respond to cracks and corrosion defects—was inadequate for pipeline safety.

NTSB investigators also cited factors that they said worsened the spill and increased the amount of oil that leaked into the river. Mistakes in the company's Alberta-based control room allowed the leak to go undetected for over 17 hours as oil continued to flow through the line. And once it was detected, the company's initial response was ineffective due to a lack of equipment and trained personnel.

"This investigation identified a complete breakdown of safety at Enbridge," Chairman Deborah A.P. Hersman said during Tuesday's NTSB meeting. "Their employees performed like Keystone Kops and failed to recognize their pipeline had ruptured and continued to pump crude into the environment. Despite multiple alarms and a loss of pressure in the pipeline...they failed to follow their own shutdown procedures."

The rupture resulted from a series of cracks on pipeline 6B that grew and coalesced into a gash of more than six and a half feet.

Enbridge first learned about the cracks after a 2005 inline inspection conducted by a contractor. Although the problem was serious enough to merit excavation and repair, it was misinterpreted as a minor defect and never addressed.

"Enbridge detected the very defect that led to this failure (in 2005)," Hersman said. "...Yet for five years they did nothing to address the corrosion or cracking at the site, and the problem festered."

The board also cited a regulatory gap. "We saw the operator take advantage of weak regulations," Hersman said.

Oversight of the nation's 2.5 million-mile pipeline system falls to the Pipeline and Hazardous Materials Safety Administration (PHMSA), a division of the U.S. Department of Transportation with fewer than 500 employees. The agency often relies on operators to self-report pipeline defects, and there are no clear requirements on when to repair corroded or cracked segments.

"This accident was the result of multiple mistakes and missteps made by Enbridge. But, there is also regulatory culpability," Hersman said. "Delegating too much authority to the regulated to assess their own system risks and correct them is tantamount to the fox guarding the henhouse. Regulators need regulations and practices with teeth."

The NTSB, an independent agency, listed 17 new safety recommendations directed at Enbridge, PHMSA, the U.S. Secretary of Transportation and other organizations including the American Petroleum Institute. It urged PHMSA to tighten corrosion regulations and conduct detailed reviews of operators' emergency response plans. It urged Enbridge to improve its integrity management program and to better train its control center operators in spill detection.

Cleanup of the 6B rupture has been particularly difficult because the oil that spilled was diluted bitumen, or dilbit, from Canada's tar sands region. Unlike conventional crude oil, much of the dilbit sank underwater, and it could be months or years before the cleanup is complete.

During a brief session with reporters after the three-hour meeting, Hersman said that NTSB's duties do not include addressing what type of oil 6B was transporting and whether it contributed to corrosion on the steel pipe. NTSB investigators did make it clear that corrosion was external on the spot where 6B ruptured.

But Hersman noted that one of the recommendations that NTSB presented to PHMSA on Tuesday was a repeat of a previous NTSB recommendation: That pipeline operators provide information about pipe diameter, operating pressure, product being transported and potential impact radius to emergency response agencies in communities with pipelines. If PHMSA adopts that recommendation, it will be up to the agency to decide whether operators need to specify the kind of crude oil—dilbit or conventional crude—in their pipelines.

Enbridge CEO Calls Review Fair

Patrick Daniel, chief executive officer and president of Enbridge, said the NTSB wasn't out of line in directing Enbridge to improve its pipeline integrity management, inline inspections, leak detection systems and make public awareness about its pipelines a priority.

"I think they have been fair to Enbridge," Daniel told InsideClimate News after sitting through the entire meeting. "It was a very thorough review. We have already implemented many of the recommendations. To tell you the truth, we started two years ago."

Daniel emphasized that Enbridge was under the impression it had a company-wide culture of safety before July 2010 when 6B ruptured in Marshall, Mich.

"You can have a safety culture and still have an accident," he said. "You have to learn from that. That's our objective.

"We've taken full responsibility for this and have acted in a way that we hope meets our obligation to the people of Marshall and Battle Creek. We told them we made a mess and we're going to clean it up."

Daniel recently announced that he'll retire from Enbridge by the end of the year. He said that next week he'll head back to Michigan, where he spent several months after the spill, to join a Calhoun County resident for a canoe trip on the Kalamazoo River.

Carl Weimer, executive director of the Bellingham, Wash.-based nonprofit Pipeline Safety Trust, said he was heartened by the NTSB investigation's focus on three problems: the events that unfolded in the control room in Canada, the inadequacy of the company's spill response plan and lack of a program that consistently monitored the safety of Pipeline 6B.

In an interview, Weimer said that over the last decade regulators have given pipeline operators too much flexibility in monitoring the safety of their pipelines.

"Companies haven't been responsible with that responsibility," he said. "What we already know and what's being emphasized today is that state and federal regulators don't have the resources or the will to check on what companies are doing."

On Wednesday and Thursday, two of PHMSA's committees—the Gas Policy Advisory Committee and the Liquid Policy Advisory Committee—are having joint meetings in downtown Washington, D.C., to talk about potential changes to the agency's regulations.

"It will be interesting to see over the next two days how much of this percolates into the conversation at PHMSA's technical meetings," Weimer said.

Weimer said Hersman, the NTSB chairman, was on the mark when she asked if the Enbridge rupture in Marshall and the Sept. 2010 explosion of a gas pipeline in San Bruno, Calif., are anomalies or just the tip of larger shortcomings with pipelines nationwide.

"What we're learning is that those two incidents very well could be indicative of other problems in the pipeline world," Weimer said.

Clean Water Act Penalties Still Pending

The five board members of the NTSB voted unanimously on Tuesday to accept the investigation report.

They released the report's executive summary, conclusions and safety recommendations shortly after the meeting. Agency spokesman Peter Knudson said the complete report will be made public in two to four weeks, pending minor revisions made at the board's suggestion. "It's very rare (for) anything substantial" to be changed, he said.

Several other federal agencies are also investigating the 6B rupture.

Last week, PHMSA proposed a record $3.7 million civil penalty against Enbridge for 22 probable violations of pipeline safety regulations. The violations include failure to follow operational and management procedures, as well as failures to meet reporting and operator qualification requirements.

The two largest proposed fines are $1 million each, and both are related to Enbridge's failure to address corrosion defects on 6B in a timely manner.

"Substantial though the fine is, I am concerned that the amount is just a drop in the bucket for Enbridge and will not cause the company to significantly change its practices," said Sara Gosman, a lecturer at the University of Michigan Law School who has studied the Enbridge spill extensively.

The U.S. Environmental Protection Agency is conducting a separate investigation of the spill. The agency enforces the Oil Pollution Act, a section of the Clean Water Act. An EPA spokesman declined to comment on the progress of that investigation.

Under the Clean Water Act, Enbridge's civil penalties could reach $4,300 per barrel of oil spilled if the government can prove gross negligence. If gross negligence can't be proved, civil penalties could still be as high as $1,100 per barrel. Criminal penalties under the Clean Water Act could be up to twice the losses associated with the spill.

Enbridge maintains that it spilled only 843,444 gallons (20,082 barrels), an estimate the company hasn't changed since November 2010.

The EPA's latest estimate, released on June 7, is that 1,148,229 gallons (or 27,339 barrels) have been recovered since the cleanup began on July 26, 2010.

Both PHMSA and the NTSB cited Enbridge's estimate, although at one point in Tuesday's meeting, an NTSB investigator used the EPA's estimate when describing the magnitude of the spill.