Wisconsin Supreme Court Rejects Special Requirements for Pipeline Expansion

Published August 15, 2019

The Wisconsin Supreme Court ruled Dane County cannot force a company to purchase special environmental liability insurance as a condition of permission to expand an oil pipeline.

The court found state law bars local governments from imposing special insurance requirements on oil and gas pipelines.

The court voted four to one on June 27 to reverse an appeals court decision that had allowed Dane County’s insurance requirement. Two justices abstained.

“In this case, it would be … absurd to force Enbridge to repeat the permitting process when the County Board knowingly issued a Conditional Use Permit with unlawful conditions,” the majority opinion said. “The insurance conditions imposed by Dane County in the CUP issued to Enbridge were rendered unenforceable by Act 55.”

With the court’s action, Enbridge Inc. may now move forward with its expansion plans.

Law Bars Special Requirements

Enbridge applied for a permit to build a pumping station in Dane County in 2015 as part of an expansion of its Line 61 pipeline corridor. One of five Enbridge pipelines in Wisconsin, Line 61 runs from the city of Superior, near Wisconsin’s northern border, to the state’s southern edge, delivering Canadian heavy tar sands crude oil to a terminal in Illinois.

The expansion will allow Enbridge to triple the amount of oil flowing through pipelines across the state.

Dane County approved Enbridge’s permit in April 2015, subject to the company purchasing an additional $25 million in environmental liability insurance. The county cited a spill on one of Enbridge’s pipelines on the Kalamazoo River in Michigan in July 2010 as justification for the requirement.

Enbridge appealed this provision to the Dane County Board, pointing out the company already had comprehensive liability coverage. While the appeal was under consideration, Wisconsin lawmakers passed a law blocking municipalities from requiring companies to obtain special insurance if the company has comprehensive general liability insurance.

“A county may not require an operator of an interstate hazardous liquid pipeline to obtain insurance if the pipeline operating company carries comprehensive general liability insurance coverage that includes coverage for sudden and accidental pollution liability,” 2015 Wisconsin Act 55 states.

Despite the new state law, the Dane County board upheld the requirement. Enbridge sued to have the permit enforced without the special insurance requirement.

Upholding Rule of Law

The court’s ruling upholds the primacy of state law, says Corydon Fish, general counsel for Wisconsin Manufacturers & Commerce (WMC), which filed an amicus brief supporting Enbridge’s suit.

“Local governments do not have the authority to supercede [sic] the will of the people, as enacted by the Legislature, and must not be allowed to ignore legislative directives,” Fish wrote in his amicus brief for WMC.

“The Wisconsin Supreme Court fired a shot across the bow of local municipalities that often like to flout state law,” Fish told Environment & Climate News after the ruling. “This case reinforces the rule of law in Wisconsin, and that makes Wisconsin more prosperous and more free.

“This Supreme Court decision says there are consequences for acting outside of the law,” said Fish. “I hope this will be the first in a series of victories for the business community.”

Vivian E. Jones ([email protected]) writes from Murfreesboro, Tennessee.