May 27, 2008
Rockefeller Rebellion Turns Up Heat on Exxon
COMMENT: Long set of articles, but fascinating if you're inclined to be fascinated by this stuff. Change comes about in many different ways, but the forces that create the conditions for change usually have to come from all directions. ExxonMobil - that's gonna be one hard nut to crack.
Rockefeller Rebellion Turns Up Heat on Exxon
John D.'s Heirs Seek Change -- and Respect
By LESLIE EATON and RUSSELL GOLD
Wall Street Journal
May 24, 2008
Two decades ago, Neva Goodwin Rockefeller grew so tired of all the baggage that came with her fabled family name that she changed it and became plain Neva Goodwin.
But now, Ms. Goodwin, 63 years old, is embracing the powerful Rockefeller name as she publicly challenges the management of Exxon Mobil Corp., successor to the oil company founded by her great-grandfather, John D. Rockefeller. As Neva Rockefeller Goodwin, she has marshaled four generations of Rockefellers to join her in a campaign to force major changes at one of the most profitable companies in the world. The battle will come to a head at Exxon's annual meeting Wednesday in Dallas.
See a family tree of the Rockefellers.
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Some members of the family joined the fight out of a passionate belief in the threat of global warming; others were concerned that Exxon is overlooking business opportunities or risks. Many seem offended that the company appears impervious to the wishes of its shareholders, including those named Rockefeller.
And they have struggled -- not always successfully -- with the feeling that engaging in a public brawl with Exxon was simply not the done thing. After all, David Rockefeller, 92, the former chairman of Chase Manhattan Bank, had taught them that investor activism was "mostly carried out by nuts," says his daughter, Ms. Goodwin, a Cambridge, Mass., economist.
Fifteen family members, mostly cousins from Ms. Goodwin's fourth generation, have stepped forward to co-sponsor four shareholder resolutions urging change at Exxon. While three address concerns about global warming and renewable energy, the Rockefellers have rallied most enthusiastically around a fourth proposal to name an independent chairman, a plan they say is supported by 73 direct descendents of John D.
Focus on Oil
Exxon roundly rejects the need both for an independent chairman and for investing more in alternative energy. Chairman and Chief Executive Rex Tillerson says his job is to protect shareholders' investments by helping the company's thousands of engineers and scientists focus on its core business: oil and natural gas. The company says oil and gas will continue to provide the bulk of energy needs and they are working to provide that needed energy.
"We are a petroleum and petrochemical company," he said in an interview. "In fact, we think we're the best one in the world and our performance would tend to support that."
The odds are long that the family will get its way. As stockholders with only a tiny holding relative to Exxon's 5.3 billion voting shares, the Rockefellers' main clout comes from wielding their name to gain attention and woo other shareholders. The fact that Exxon just finished the most profitable year in American corporate history doesn't help their cause. Last year, Exxon posted a profit of $40.61 billion. The company's shares have more than doubled in the past four years.
Big Push
In the run-up to Wednesday's shareholder meeting, normally limelight-loathing Rockefellers have pulled out the stops to push their proposals -- including holding a press conference at a Manhattan hotel and endorsing a campaign slogan: "Exxon for Owners."
Peter M. O'Neill, 45, the son of one of Ms. Goodwin's cousins, is doing something that is usually anathema in the family: acting as a spokesman and giving interviews to the press.
It's an unprecedented effort by the politically diverse clan, says family historian Peter J. Johnson, who has worked for the Rockefellers for 32 years. "To actually get consensus in the family is rare," he says.
Exxon executives at first belittled the Rockfellers' potential influence by pointing out to reporters that the family members sponsoring the proposals own only .006% of the company's shares.
Family members say they own much more, but won't say how much. They say most of the family investments sit in a thicket of trusts set up starting in 1934 and mostly managed by a unit of J.P. Morgan Chase. Some say they don't even tell other family members how much they own.
On May 12, Exxon sent a letter to shareholders urging them to reject the proposal for an independent chairman, arguing "no one governance model fits all companies."
The Rockefellers are mounting the most serious shareholder revolt against Exxon in recent memory. But they're going up against a company with unrivaled success at finding, extracting and refining fossil fuels. Exxon has managed to make billions of dollars a year whether oil prices were high or low under men who spent their whole careers tending its fields and refineries. That strong culture strikes some outsiders, including the Rockefellers, as insular.
The Rockefellers' ties to Exxon go back to the 1870s, when John Davison Rockefeller Sr. began to put together the cartel that became Standard Oil. Trustbusters later split it into 34 companies, including what became Chevron Corp. and ConocoPhillips. Two of the largest, Exxon and Mobil, merged in 1999.
A century ago, Mr. Rockefeller was reviled as a rapacious plutocrat. Eventually he and his son, John Junior, developed a reputation for philanthropy on a grand scale. The family was responsible for, among many other things, restoring Colonial Williamsburg and creating Grand Teton National Park.
John D.'s five Rockefeller grandsons were towering figures of the mid-20th Century. Most famous was Nelson, four-term governor of New York and later vice president under Gerald R. Ford. The only survivor of that group is Neva's father, David, who issued a statement offering his support to the family's campaign.
Younger members of the now 232-person clan have generally avoided the spotlight. They live all over the world, but gather twice a year, often at Kykuit, the Rockefeller estate in Pocantico Hills, up the Hudson River from New York City.
To some Rockefeller watchers, the newfound activism appears to be another outbreak of the unease about their oil-based fortune that periodically grips family members. Those who came of age in the 1960s and 1970s were particularly ambivalent, says Peter Collier, a California writer who has chronicled the Rockefeller, Roosevelt and Ford families.
"For them, Exxon is not only an environmental malefactor, it's also original sin," he said in an interview. By challenging Exxon, "They are trying to remove the stain of oil from the family name."
That's a little melodramatic for many of the Rockefellers, including Ms. Goodwin, who in the 1970s was a friend and colleague of the unconventional inventor and professional visionary Buckminster Fuller. She lives with her historian husband in a baby-blue clapboard house, where a collection of Far Side cartoons sits on a bookshelf near volumes of Charles Darwin's correspondence. A Prius is parked in the garage.
"I don't feel responsible for everything my family has ever done," she says. "Selectively, I look at the really fine things the family has done and am extremely proud."
As co-director of the Global Development and Environment Institute at Tufts University, Ms. Goodwin's interest in corporate power was mostly academic. But a couple of years ago at Tufts, she met Sister Patricia A. Daly, a shareholder activist, and decided to co-sponsor her resolution, at Exxon's 2003 annual meeting, asking the company to study the impact of climate change.
Looking for Support
Ms. Goodwin then turned to her two-dozen Rockefeller first cousins for support. Five signed an email that read, in part, "Most members of our family will own shares of Exxon for far longer than the present management will be in place, and therefore we have an important interest in and responsibility toward the long-term viability of the company."
The resolution failed, but it ignited interest among the family, which formed a committee to study the issue. Some on the committee were ardent environmentalists; others had a pragmatic business outlook.
Among the latter was Mr. O'Neill, a former social worker who once ran a mental health clinic in Harlem and now sits on the boards of several private companies and philanthropies. A man who speaks carefully and uses "dialogue" as a verb, he says he worries that Exxon isn't positioning itself for a sea change in the energy markets.
"I care about the bottom line," he says, noting that for him, as for most in the family, Exxon is the largest single investment.
Talk with Executives
Twice in 2004, in response to requests by the Rockefellers to meet with Exxon about their concerns, the company sent investor-relations executives to talk to the family in their art-filled offices on the 56th floor of 30 Rockefeller Center. The family wanted to discuss Exxon's assumptions about the future of energy, particularly the company's assertion that alternative fuels will make few inroads into the dominance of oil and gas, Ms. Goodwin says. The Rockefellers were concerned Exxon would be vulnerable if energy markets changed more -- or more quickly -- than the company anticipated.
Exxon managers brought basic presentations to the meetings that the company gives to most shareholders, according to family members, and didn't specifically address their worries.
Exxon didn't respond to requests for information about what happened at those meetings.
The next year, the family held a private conference to educate itself, inviting scientists, engineers, industry executives and activist investors. "This is an advantage to being a Rockefeller," Ms. Goodwin says. "If you want to have a discussion about the future of energy, people are willing to come to it."
Family interest in Exxon was snowballing when Mr. Tillerson took over as chief executive in January 2006, succeeding Lee R. Raymond. But the Rockefellers made little headway with Mr. Tillerson, either.
Congratulatory Letter
Forty-three family members signed a congratulatory letter asking to meet him and the board. Instead, Mr. Raymond and Mr. Tillerson invited only Ms. Goodwin's father, David, to a Manhattan lunch. Although Ms. Goodwin eventually got an invitation, she says she didn't hear "anything they haven't said other times to many people."
Attempts to meet directly with other members of the board were rebuffed, Ms. Goodwin and Mr. O'Neill say. An Exxon spokesman says the requests were handled in the same manner used for all shareholders. Last fall, Exxon arranged for some activist shareholders to meet executives and researchers investigating alternative energy. Mr. O'Neill says he came away still concerned about the company's long-term strategies.
Mr. Tillerson says Exxon monitors potential new fuels, but won't invest in them simply because it's the politically correct thing to do. He says he refuses to support a policy of "casting a lot of corn out on the ground and hoping some of it takes root."
By spring of last year, the family's frustration with Exxon had reached full boil. At their June gathering, in a Tudor-style building on the Kykuit estate known as the Playhouse and hung with portraits of their ancestors, they decided to take action.
One way was to put their ideas to a shareholder vote by co-sponsoring so-called proxy resolutions at Exxon's annual shareholder meeting. The resolutions are nonbinding, although companies seldom ignore those that attract a majority.
Ms. Goodwin filed her own proxy resolution, calling on Exxon to study the effects of global warming on poor communities, and several of her cousins rallied round as co-sponsors. Other cousins and their children opted to support two other environmental resolutions, one on reducing greenhouse gases and the other on investing in alternative energy.
Mr. O'Neill chose to co-sponsor the independent chairman resolution, which had been introduced for several years by Robert A. G. Monks, a longtime activist on corporate governance. They were joined by another Rockefeller, John de Cuevas, a writer and environmentalist whose grandmother was John D. Rockefeller Sr.'s eldest child.
Heavy Support
The chairman proposal has drawn the support of more than 93% of John D. Rockefeller Jr.'s 78 direct adult descendents, the family says. (Senator Jay Rockefeller of West Virginia has his holdings in a blind trust, and said in a statement that though supportive, he isn't directly involved).
Mr. Monks, who had gradually been building support for his proposal to 40% of the vote last year, believes an independent chairman can help ensure an independent board, and an independent board is key to a company's evaluation of its strengths and weaknesses. As he wrote in a letter to shareholders, "such inner-reflection is difficult when the board is lead by a CEO who has spent most of his adult life at the company, as has the entire executive management team." For Mr. Monks, the Rockefeller support was an unexpected boon that moved the debate outside his world of corporate-governance geeks. "God bless them," he says of the Rockefellers. "They hate the idea of publicity. But they are willing to do it because they think something is wrong at Exxon."
Reticent to Speak Out
Most Rockefellers have been reticent to speak publicly about the effort. One family member who did agree to talk was Michael S. Rockefeller, a grandson of Nelson, who runs an Internet advertising agency called Active Media. The family realized it would take heat for its position, he says, and it has: He says some critics have described the family as "rich, spoiled little kids."
But one criticism, he says, "makes us just boil": The argument that John D. himself would never have agreed to a separate chairman-president arrangement.
According to Mr. Johnson, the family historian, that is exactly what happened in 1896, when the patriarch gave up operating control of Standard Oil while serving in the top board position until 1911.
Mr. O'Neill says he had to do a lot of soul searching before agreeing to go public with their fight. Rockefeller family members sit on a lot of corporate boards, he says, "and we're not known for being meddlers."
Write to Leslie Eaton at leslie.eaton@wsj.com2 and Russell Gold at russell.gold@wsj.com3
URL for this article: http://online.wsj.com/article/SB121157457128518175.html
STANDARD OIL'S FAMILY TREE
When the Supreme Court ordered the breakup of Standard Oil Trust in 1911, 34 companies came out of the split. Many of those companies have since recombined to become some of today's largest oil companies.
• Standard Oil of Indiana is spun out of Standard Oil (1911); becomes Amoco in 1954. Acquired by BP (1998).
• Atlantic Petroleum Storage Company is acquired by Standard Oil (1874); becomes independent again with breakup of Standard Oil (1911); partners with Richfield Oil Corp. & forms Arco (1966), is acquired by BP (2000).
• Standard Oil of California is spun out of Standard Oil (1911); Socal buys Gulf, rebrands as Chevron (1984).
• Continental Oil is reincorporated after breakup of Standard Oil (1911); Conoco, as it is later called, becomes part of Du Pont (1981), later is spun out as a separate company; merges with Phillips Petroleum to become ConocoPhillips.
• Standard Oil of New Jersey becomes independent with dissolution of Standard Oil Trust (1911); changes name to Exxon (1972); merges with Mobil (1999) -- itself is a descendant of Standard Oil known as Standard Oil Co. of New York (Socony).
• Standard Oil Company of Ohio is created by breakup of Standard Oil (1911); BP acquires 25% stake in Sohio (1970) after discovery of oil in Prudhoe Bay; BP acquires rest of Sohio, creating BP America (1989).
• The Ohio Oil Co. becomes independent after breakup of Standard Oil (1911). Changes name to Marathon Oil Co. (1962); becomes a subsidiary of United States Steel Corp. (1982); splits into independent company known as Marathon Oil Co. (2001)An independent chairman, they argue, could chart a strategy for Exxon's future, one that many of them hope would include more focus on renewable energy. They also believe an independent chairman -- to whom the CEO would be accountable -- might be more responsive to shareholder concerns.
Energy For Exxon Holders, Profit Is Not Enough
By RUSSELL GOLD
Wall Street Journal
May 24, 2008
Hundreds of Exxon Mobil Corp. investors will gather Wednesday at the Morton H. Meyerson Symphony Center in Dallas. Attendees of the annual shareholders meeting should expect Exxon's own Bengal Traders brand coffee, visual displays that tout the company's latest technological breakthroughs -- and a clash between activists and management over the future of the company.
In some ways, it is an odd time for discontent among the Exxon faithful. With crude-oil prices at record levels, Exxon's stock hit a record high this week. Dividends are up. Profits are unprecedented.
By these financial measures, Rex Tillerson, the chairman and chief executive, should expect to hear a chorus of hosannas from some investors for his recital of the past year's accomplishments. But the activists are focused on the future. They worry Mr. Tillerson isn't preparing enough for what many expect to be a turbulent time in the energy markets.
The debate on the future of energy isn't academic. Exxon believes that in 2030, just as today, about 60% of the world's energy demand will be met with oil and natural gas. (The rest is largely coal, nuclear and hydropower.) Therefore, the company directs the vast majority of its capital budget to finding, extracting and selling oil and gas.
Most activists believe governments will soon mandate carbon-emissions constraints in order to curb global warming. This will lead to the swift rise of nonfossil fuels such as wind, solar, nuclear and biomass.
Exxon faces a raft of shareholder resolutions aimed at both steering the company toward a greener future and forcing change at the top by appointing an independent chairman.
These votes have been gathering momentum. In 2003, a proxy resolution to split the chairman and chief executives roles received 22% of the vote. Last year, it got 40%. Another proposal, to require Exxon to set specific goals limiting greenhouse-gas emissions, was favored by 31% of shareholders last year. Both are back on Wednesday's ballot. A new proposal would require Exxon to take a hard look at sustainable-energy technologies.
Offering vocal support to all three measures are descendants of John D. Rockefeller, the founder of Exxon-forerunner Standard Oil. Not only are they using their name to draw attention to the resolutions, the family and its retinue have been on the road in recent weeks urging institutional investors to cast their shares in favor of change. Exxon management opposes these resolutions, arguing that its record speaks to its ability to adroitly handle complex energy markets.
These resolutions are non-binding. If one attracts a majority of votes, Exxon could simply ignore it. But precedence and good corporate governance suggest otherwise. Two years ago, a shareholder resolution calling for the resignation of any Exxon director who doesn't get a majority of votes passed and was subsequently adopted by the board.
Exxon management might take solace in another shareholder resolution offered this year. The item proposes eliminating nonbinding resolutions altogether because they're "a primary tool of 'activist' or 'nuisance' shareholders." Exxon advises a vote against this measure, stating that suggested change is "the best way to carry out reform of the shareholder proposal process at this time."
Write to Russell Gold at russell.gold@wsj.com
May 26, 2008
Enbridge spills oil in Wisconsin
COMMENT: Enbridge has apparently resucitated its Gateway Pipeline proposal (big oil pipe from Edmonton to Kitimat, not quite so big condensate pipe from Kitimat to Edmonton). The company promises promises, but First Nations aren't buying, and critics and supporters alike recognize how challenging the terrain is, that the pipeline will have to cross salmon rivers, etc.
So, to demonstrate what an exemplary job it can do, Enbridge oils up the countryside with another pipeline, in Wisconsin...
State says pipeline builder damaged streams, wetlands
Lee Bergquist, Milwaukee Journal Sentinel, 24-May-2008
Oil spill tainted water table
Lee Bergquist, Milwaukee Journal Sentinel, 15-Feb-2008
Oil group cleans spill in Clark County
Thomas Content, Milwaukee Journal Sentinel, 03-Jan-2008
State says pipeline builder damaged streams, wetlands
DNR seeks penalties for Enbridge's recent project
By LEE BERGQUIST
lbergquist@journalsentinel.com
Milwaukee Journal Sentinel
Posted: May 24, 2008
The state Department of Natural Resources is alleging that a Canadian company is responsible for more than 100 environmental violations related to the construction of a 321-mile pipeline spanning much of Wisconsin.
The DNR has asked the state Justice Department to prosecute Enbridge Inc. of Calgary, Alberta, for damaging waterways and wetlands while building the pipeline.
The pipeline is part of a $2.1 billion project to transport crude oil from the oil sands region of Alberta to Chicago and was touted by supporters as a new way of moving 400,000 barrels of raw petroleum into the Midwest a day.
In Wisconsin, the 42-inch and 20-inch pipeline runs along an existing pipeline route from Superior to Delavan, where it connects with another pipeline.
The DNR said that Enbridge workers illegally cleared and disrupted wooded wetlands, and were responsible for other lax practices that resulted in discharging sediment into waterways.
There were no oil spills, although the company was responsible for major spills on a companion pipeline in 2007.
The Wisconsin Wetlands Association has been monitoring the project by tracking public documents from DNR inspectors.
The group has pressed the DNR since last fall to refer Enbridge for prosecution.
"The project has been sloppy," said Erin O'Brien, the association's wetland policy and conservation specialist.
She said there has been a pattern of smaller violations that, when taken as a whole, are likely to cause long-term damage.
The DNR has spent considerable time on the case because of the size and complexity of the project, said Susan Crawford, administrator of the division of enforcement and science.
"We think a significant penalty is appropriate," Crawford said.
A phone call and e-mail to the spokesman at the Justice Department was not returned on Friday. An attorney at the agency working on the case declined to comment.
Documents show scores of incidents in which workers failed to protect wetlands and waterways, allowing mud and sediments to flow into water bodies.
"I am not minimizing there was some major erosion into streams," said Denise Hamsher, director of the federal and state regulatory affairs at Enbridge Energy Co. Inc., a unit of Enbridge.
But by the end of the year, "we will have very high restoration and very little evidence of a pipeline."
She said oil is beginning to fill into the pipeline, but it is not yet operational.
A second Enbridge project that will run 23 miles in Wisconsin from Delavan through Rock County into Illinois was approved recently by the DNR. Despite concerns over the 321-mile pipeline, and previous spills, there was no formal opposition to the smaller project.
But at the start of the larger project, in December 2006, environmental groups, including the wetlands association, filed suit against the DNR, contending that the agency erred by not requiring an environmental impact statement.
In February 2007, the existing pipeline, which runs parallel to the new project, released 176,000 gallons of Canadian crude in Rusk County, one of the largest spills in the state's history. There was a separate spill of 50,000 gallons in Clark County in January 2007.
The DNR said the cleanup at both sites was completed and Enbridge crews continued to monitor groundwater supplies near the spill.
Oil spill tainted water table
Recent pipeline leak seeped into deep hole in northern Wisconsin
By LEE BERGQUIST
lbergquist@journalsentinel.com
Milwaukee Journal Sentinel
Posted: Feb. 15, 2007
An oil pipeline spill on Feb. 2 in Rusk County - one of the largest such accidents of its kind in state history - has been found to have contaminated the local water table, officials confirmed Thursday.
The accident is one of two resulting in the release of at least 176,000 gallons of Canadian crude oil in northern Wisconsin since the beginning of the year.
Both are under investigation by the U.S. Office of Pipeline Safety and being reviewed by the state Department of Natural Resources.
The spills took place during construction of a 320-mile pipeline by Enbridge Inc. of Calgary, Canada, alongside its existing pipeline from Superior to near Whitewater.
The expansion has drawn criticism, and a lawsuit, from environmental groups including the Wisconsin Wetlands Association and the River Alliance of Wisconsin. The groups say the massive undertaking should have required a highly detailed environmental impact statement, instead of a less rigorous environmental assessment.
The DNR, which reviews such projects for effects on streams and wetlands, said the pipeline expansion did not rise to the level at which Enbridge needed to complete the more thorough analysis.
The operations in Wisconsin owned by Enbridge were formerly known as Lakehead Pipeline.
Enbridge is expected to seek permission shortly for construction of another pipeline - this time along private land where a pipeline doesn't currently exist.
The new pipeline would run through 23 miles of Rock County into Illinois, where the company also plans to add more capacity.
"Obviously, it does not make us feel very comfortable to trust Enbridge to do the right thing," said Lori Grant, policy program manager for the River Alliance.
"I think they are in a hurry to move forward with the project. It makes you wonder if these spills are a part of their M.O."
But Enbridge spokeswoman Denise Hamsher said, "We greatly regret what happened - and it's a spill we just won't accept."
She said the two spills are the first breaks in more than four years along the company's more than 8,000 miles of pipeline right of way in North America.
Enbridge says it operates the largest pipeline system in the world.
The company moves crude oil from northwest Canada to terminal locations, including Chicago, Detroit and Montreal.
Enbridge said the expansions are needed because of growing demand for Canadian crude - an alternative to Mideast oil.
Oil moved through Wisconsin is refined in Chicago.
The first of the two spills took place Jan. 1 in Clark County when 50,000 gallons of crude leaked onto farmland and into a drainage ditch.
Hamsher said the pipeline inexplicably cracked open and released crude until an operator could shut down the line from an operations center in Canada.
The oil was removed and returned to the pipeline, she said.
Crews will use equipment that runs the length of the pipeline to look for explanations for why the pipeline cracked, Hamsher said.
In the second accident, Feb. 2 near Exeland in Rusk County, crews mistakenly struck the existing pipeline while preparing to extend the new pipeline beneath a roadway.
Oil filled a large hole more than 20 feet deep before the flow was again shut down. But in this case, Enbridge and the DNR confirmed oil that was not removed seeped into the water table, a finding that could potentially affect local private water supplies.
But state officials and the company say the spill is in a remote locale where only one seasonal home lies within the immediate area.
Monitoring wells will be constructed around the accident site to determine the spread of the oil.
A spokesman for the Office of Pipeline Safety said it was premature to draw conclusions about the accidents.
DNR records show that the 1973 Lakehead Pipeline break in Jefferson County was the largest such break in Wisconsin.
The Feb. 2 spill appears to be the fourth biggest pipeline spill, according to DNR records, though officials at the agency said computerized records could be incomplete.
There have been other larger spills from bulk tanks, the DNR said.
In 2005, Enbridge reported 412,650 gallons of oil were spilled in its North American operations and largely contained within its operational facilities.
The two spills in Wisconsin this year would represent 43% of that figure.
State Oil Spills
The Two Spills
Jan. 1: Clark County. The pipeline cracked open and released crude oil until an operator could shut down the line from an operations center in Canada, an Enbridge spokeswoman said.
Feb. 2: Near Exeland in Rusk County. Crews mistakenly struck the existing pipeline while preparing to extend a new pipeline beneath a roadway. Oil filled a hole more than 20 feet deep before the flow was shut down, and some of it seeped into the water table.
Oil group cleans spill in Clark County
50,000 gallons from Enbridge cover field
By THOMAS CONTENT
tcontent@journalsentinel.com
Milwaukee Journal Sentinel
Posted: Jan. 3, 2007
The company planning to build a crude oil pipeline across Wisconsin is on the scene of an oil spill that sent more than 50,000 gallons of crude oil onto a farmer's field in Clark County.
Enbridge Inc. spokesman Larry Springer said as many as 40 workers were at the site Wednesday working to remove oil and tainted soil from the field in the Town of Curtiss, 43 miles west of Wausau.
The spill was detected Monday, when Enbridge noticed a drop in pressure along its pipeline, which carries crude oil from Canada through Minnesota and Wisconsin to Chicago and then Detroit. Crews said they detected a 4-foot long split on the seam of the pipe, which was put into service in 1998.
The cause of the split and spill remains under investigation, and Enbridge plans to conduct tests on the damaged piece of pipe. A new piece of pipe was installed Tuesday, and the pipe was preparing to resume carrying crude oil by Wednesday evening or today, Springer said.
The line, a 24-inch diameter pipe that is one of two run by Enbridge through Wisconsin, carries about 300,000 barrels of oil a day, he said. The state Department of Natural Resources is on site monitoring cleanup.
"There is oil penetrated about an inch into the ground," DNR spokesman Dave Weitz said. "They are moving quite rapidly to clean that surface up."
The spill covered about one-half acre of the field, and the environmental damage is marginal, he said.
Denise Hamsher, an Enbridge spokeswoman, said the last rupture of one of Enbridge's major pipelines occurred four years ago. The company transports 63 million gallons a day, she said.
Enbridge is preparing to start construction on a 321-mile pipeline that would cross Wisconsin, including on the same property where the spill occurred this week. That project received approval from the state Department of Natural Resources in November.
The spill comes less than two weeks after environmental groups sued to block construction of the pipeline, saying the DNR should have done a more exhaustive analysis and citing a track record of spills.
In Wisconsin, Enbridge has been responsible for seven spills since 1999, the DNR said. Six of the spills were at the company terminal in Superior and were largely contained, the agency said.
Springer said the company does not foresee the spill affecting the company's plans to build the new pipeline.
The Associated Press contributed to this report.
May 03, 2008
Dumb as We Wanna Be
McCain-Clinton gas "tax holiday" breathtakingly ridiculous
By Thomas L. Friedman
New York Times
Wednesday, April 30, 2008
It is great to see that we finally have some national unity on energy policy.
Unfortunately, the unifying idea is so ridiculous, so unworthy of the people aspiring to lead our nation, it takes your breath away. Hillary Clinton has decided to line up with John McCain in pushing to suspend the federal excise tax on gasoline, 18.4 cents a gallon, for this summer's travel season. This is not an energy policy. This is money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks. What a way to build our country.
When the summer is over, we will have increased our debt to China, increased our transfer of wealth to Saudi Arabia and increased our contribution to global warming for our kids to inherit.
No, no, no, we'll just get the money by taxing Big Oil, says Mrs. Clinton. Even if you could do that, what a terrible way to spend precious tax dollars -- burning it up on the way to the beach rather than on innovation?
The McCain-Clinton gas holiday proposal is a perfect example of what energy expert Peter Schwartz of Global Business Network describes as the true American energy policy today: "Maximize demand, minimize supply and buy the rest from the people who hate us the most."
Good for Barack Obama for resisting this shameful pandering.
But here's what's scary: our problem is so much worse than you think. We have no energy strategy. If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage -- gasoline consumption and gas-guzzling cars --
and you want to lower taxes on the things you want to encourage -- new, renewable energy technologies. We are doing just the opposite.
Are you sitting down?
Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.
These credits are critical because they ensure that if oil prices slip back down again -- which often happens -- investments in wind and solar would still be profitable. That's how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.
The Democrats wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry. President Bush said he would veto that. Neither side would back down, and Mr. Bush -- showing not one iota of leadership -- refused to get all the adults together in a room and work out a compromise. Stalemate. Meanwhile, Germany has a 20-year solar incentive program; Japan 12 years. Ours, at best, run two years.
"It's a disaster," says Michael Polsky, founder of Invenergy, one of the biggest wind-power developers in America. "Wind is a very capital-intensive industry, and financial institutions are not ready to take `Congressional risk.' They say if you don't get the [production tax credit] we will not lend you the money to buy more turbines and build projects."
It is also alarming, says Rhone Resch, the president of the Solar Energy Industries Association, that the U.S. has reached a point "where the priorities of Congress could become so distorted by politics" that it would turn its back on the next great global industry -- clean power -- "but that's exactly what is happening." If the wind and solar credits expire, said Resch, the impact in just 2009 would be more than 100,000 jobs either lost or not created in these industries, and $20 billion worth of investments that won't be made.
While all the presidential candidates were railing about lost manufacturing jobs in Ohio, no one noticed that America's premier solar company, First Solar, from Toledo, Ohio, was opening its newest factory in the former East Germany - 540 high-paying engineering jobs - because Germany has created a booming solar market and America has not.
In 1997, said Resch, America was the leader in solar energy technology, with 40 percent of global solar production. "Last year, we were less than 8 percent, and even most of that was manufacturing for overseas markets."
The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious -- the energy to do big things in a sustained, focused and intelligent way. We are in the midst of a national political brownout.