Enbridge says two-thirds of spill oil gathered up

CALGARY, Alberta (Reuters) - Enbridge Inc said on Tuesday it has removed two-thirds of the more than 800,000 gallons of oil spilled into a Michigan creek last week when one of its pipelines ruptured, as U.S. regulators reported the waters of the Kalamazoo River have begun to clear.

Susan Hedman, regional administrator for the U.S. Environmental Protection Agency, said little oil sheen remained on the Kalamazoo eight days after clean-up efforts began.

"The water surface looked very clear on both Talmadge Creek and the river," Hedman said on a conference call. "It was very, very encouraging to see that."

Enbridge Line 6B, which runs from Indiana to Sarnia, Ontario, suffered a break early last week and spilled more than 19,500 barrels (819,000 gallons) of Canadian crude into Talmadge Creek, which flows into the Kalamazoo River just east of Battle Creek, Michigan. It was one of the largest pipeline leaks in recent U.S. history.

The spill has threatened local wildlife and drinking water supplies, while forcing refineries served by the pipeline to find alternative supplies.

The EPA said that 37 booms are now collecting the oil downstream from the break and 40,000 barrels of oily water have been removed from the river, which Enbridge said contained about 13,000 barrels of spilled oil.

The company has faced severe criticism since the July 27 spill, which came on the heels of BP Plc's devastating blowout, which released an estimated 5 million barrels of oil into the Gulf of Mexico.

Prior to the line's breach, Enbridge had been warned about potential corrosion on the pipe and regulators are placing strict conditions on the company before allowing the line to resume operations.

Enbridge has said it will pay all legitimate claims from those affected by the spill and offered on Tuesday to buy as many as 200 homes in the spill zone -- a move it said was to protect homeowners from speculators looking to acquire real estate in the region while the spill depressed prices.

The company will pay full list price for any properties in the spill zone that were listed for sale before the line broke or pay the appraised value before the spill for anyone looking to sell within a year.

"Some people feel their homes are diminished in value. Any experience that we have from the past would show that's not the case and that's what we are showing confidence in here," said Pat Daniel, Enbridge's chief executive. "We don't want anyone taking advantage of any of the people that have been impacted."

The company still has no timeline for restarting the line, which serves refineries in Toledo, Detroit and Sarnia.

It has not yet been able to remove the damaged section of pipeline and must operate at reduced pressure and meet strict conditions imposed last week by the U.S. Department of Transportation before it can resume service.