***Cynthia Giles is no longer at the University of Chicago***
By Mike Soraghan
Federal pipeline regulators touted a “record” penalty — $3.7 million — when they fined Enbridge Energy Partners in 2012 for spilling hundreds of thousands of gallons of crude oil into Michigan’s Kalamazoo River.
But U.S. EPA’s top enforcer, blindsided by their announcement, complained privately to them that the amount was “very small.”
The clash, laid out in terse emails obtained by E&E News under the Freedom of Information Act, highlights the Pipeline and Hazardous Materials Safety Administration’s reputation for leniency, which existed even before President Trump’s era of regulatory rollbacks.
It also displays some of the aggressiveness on the part of former President Obama’s EPA that has rankled industry, congressional Republicans and Trump.
EPA and Enbridge later negotiated a $61 million fine.
“It sounds on the face of it as though PHMSA went very, very light,” said Joel Mintz, a former EPA official who is now a law professor at Nova Southeastern University. “There are plenty of agencies captured by the industries they regulate, and this may be one of them.”
But industry representatives scoff at the idea that the pipeline agency is unduly influenced by the companies it regulates. John Stoody, an executive with the Association of Oil Pipe Lines, says member companies often chafe at frequent, lengthy inspections and far-reaching enforcement actions.
“Operators who undergo PHMSA’s lengthy and detailed inspections certainly do not feel like they are being inspected by anything other than a vigorous regulator,” Stoody said.
The interagency exchange took place the morning after PHMSA announced its penalty in July 2012, about two years after the spill. PHMSA and EPA officials had discussed a “referral” — taking the case to the Justice Department to file an enforcement case in court — and were surprised to learn that PHMSA had reached a deal.
“We thought we had been working collaboratively on a joint federal enforcement response,” EPA’s then-enforcement chief, Cynthia Giles, wrote in July 2012, “and were surprised by the unilateral and very small penalty action PHMSA took yesterday, with no notice or discussion with EPA or DOJ.”
But Cynthia Quarterman, then the Obama administration’s PHMSA chief, wrote back within hours to defend her agency’s actions.
“The associated civil penalties were at the maximum level of our authority for all except 3 violations,” Quarterman replied to Giles.