Michigan fires contractor doing Enbridge oil pipeline risk analysis

By Nia Williams

CALGARY, Alberta (Reuters) - Michigan said on Wednesday it has fired a consultant after state officials discovered a conflict of interest with an employee of the company conducting an independent analysis on the risks of an oil spill from Calgary-based Enbridge Inc's Line 5 pipeline in the Great Lakes.

The company, Det Norske Veritas Inc, was to produce a risk analysis by the end of June on Enbridge's 540,000 barrel per day Line 5 pipeline, which travels underwater through the Straits of Mackinac.

That report will no longer be delivered, said Melody Kindraka, a public information officer with the Michigan Department of Environmental Quality.

Det Norske Veritas did not immediately respond to requests for comment on the issue. The state said it came to light after Det Norske Veritas informed officials that an employee who worked on the Line 5 risk analysis subsequently worked on another project for Enbridge while the risk analysis was still being finished.

This violated conflict of interest clauses in the contract.

"Our trust was violated and we now find ourselves without a key piece needed to fully evaluate the financial risks associated with the pipeline that runs through our Great Lakes, this is unacceptable," Michigan Attorney General Bill Schuette said in a statement. "Terminating the contract is the only option we have to maintain the integrity of the risk analysis."

The 64-year-old Line 5 pipeline running under the Straits of Mackinac has become the subject of fierce environmental opposition in Michigan because of fears the aging infrastructure could leak crude oil into the Great Lakes.

It is a key part of Enbridge's Mainline system, which delivers the bulk of Canadian crude imports to the United States.

In 2016 state officials ordered two independent reports into the pipeline, one looking at the risks of a spill and the other assessing potential alternatives to the underwater crossing in the Straits of Mackinac.

Enbridge spokesman Michael Barnes said the company supported the state's actions and was disappointed by the developments.

Kindraka said the state is reassessing its plans on how to move forward with a risk assessment but the report on alternatives to the pipeline from another firm, Dynamic Risk Assessment Systems, will be presented to the public on July 6.

So far Det Norske Veritas has not received any payment for its work and the state is reviewing the payment terms of the contract, she added.

(Editing by David Gregorio)

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