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An undisclosed conflict of interest by a Det Norske Veritas employee forced the state of Michigan to cancel the firm’s risk analysis on Enbridge Energy’s Line 5 pipeline running below the Straits of Mackinac, according to the state Department of Environmental Quality.

The DNV GL staffer had worked on what was supposed to be an independent Line 5 risk analysis but then subsequently worked on another project for Enbridge, which violates conflict-of-interest bans in the state contract with the Norway-headquartered company, the state said in a Wednesday statement.

“We took the initiative to terminate the contract based on our commitment to the complete integrity and transparency of this report,” said C. Heidi Grether, director of the Michigan DEQ. “Ultimately the state will have to decide how to proceed with Line 5 and we can’t do that if there is any doubt regarding the nature of the information.”

The canceled contract complicates an already politically sensitive issue. Environmentalists have been calling for the closure of the 65-year-old twin pipelines that run under the Straits of Mackinac, while Enbridge has been saying they have passed stress tests and remain safe.

The Michigan Environmental Council still called Wednesday for the immediate release of the draft risk report on Enbridge Line 5 pipelines that was set to be made public in a few days.

“In the interest of transparency, the state must disclose when and how they learned about this conflict of interest,” said Chris Kolb, president of the council that represents almost 70 groups with environmental concerns. “We also call on state leaders to make public any documents or drafts of the risk analysis. This will enable Michigan residents to trust that the contract was terminated only because of the conflict of interest, and not because of anything in the report.

The state also should consider contracting with University of Michigan researchers to estimate the cost of a worst-case-scenario oil spill from Line 5, building on their research that found the Straits of Mackinac is the worst possible place for an oil spill in the Great Lakes, Kolb said.

“The state should move forward with the alternatives analysis and public comment process this summer and immediately secure a contractor to complete the risk analysis,” he added.

The state hired DNV GL last year after an extensive bidding process and required the firm’s risk assessment employees to “maintain complete independence from any other project involving Enbridge” during the contract. It also contracted with another company called Dynamic Risk Assessment Systems Inc., to prepare an alternative analysis report on the Line 5 pipeline.

The alternative draft report is still expected to be delivered by the end of the month and posted online for review and public comment.

The Michigan League of Conservation Voters welcomed the state’s scrapping of DNV’s contract.

“Michigan LCV is glad the state is holding the line against conflicts of interest in this essential report, but too much is riding on this to go back to square one,” said Lisa Wozniak, executive director of the Michigan League of Conservation Voters. “The prudent course of action is to shut Line 5 down until it is proven safe.”

The integrity of Line 5 also has drawn scrutiny from Attorney General Bill Schuette and other officials after environmentalist complaints. In the latest controversy, long sections of pipeline supports were discovered missing and were subsequently repaired, raising questions about how much stress the pipelines have been exposed to.

“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,” Schuette said in a statement. “Terminating the contract is the only option we have to maintain the integrity of the risk analysis.”

Enbridge spokesman Ryan Duffy said his company “is disappointed to learn of these developments with one of the state’s independent contractors.

“It is important this process is independent and without conflict,” he said in a statement. “We support the state’s actions. We, too, are investigating what may have happened in the contracting process.”

lfleming@detroitnews.com

(313) 222-2620

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