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Line 5 showdown set; Enbridge faces Michigan injunction request
Gary Park for Petroleum News
The drawn-out battle between Calgary-based Enbridge and Michigan Democratic Gov. Gretchen Whitmer over the future of Line 5 is fast approaching a crunch point, putting at risk more than half of the state’s propane needs and thousands of jobs in the U.S. and Canada.
Whitmer has given Enbridge until May to shutter Line 5 by canceling an easement that allows the pipeline to carry 540,000 barrels per day of light crude, light synthetic crude and natural gas liquids from Western Canada to Michigan and southern Ontario by crossing under the Straits of Makinac between Lake Michigan and Lake Huron.
Enbridge has responded by warning of “devastating consequences” if Whitmer delivers on her threat, describing the governor’s actions as a “distraction from the fundamental facts” that Line 5 “remains a safe … essential source of energy” for five U.S. states.
When the crossing was built in 1953 by Bechtel Corp. it featured a durable enamel coating and pipe walls that are still three times as thick as a typical pipeline.
Line 5 was also built in an area that would minimize potential corrosion due to lack of oxygen and the cold-water temperature.
The straits crossing has never experienced a leak in its lifetime of operation.
But Michigan Attorney General Dana Nessel has filed a legal action seeking to force Enbridge to cease operating Line 5 because of Enbridge’s “long-standing, persistent and incurable violations” of the easement’s conditions.
Impacts of shutdown Cancellation of the easement would result in a shortage of 14 million gallons of gasoline per day, along with cutting off transportation fuels in Ontario, Quebec, Wisconsin, Indiana, Ohio and Pennsylvania.
Line 5 accounts for 65% of the propane consumed in Michigan’s Upper Peninsula and 55% of the statewide propane needs.
Whitmer has yet to explain how her state expects to make up the shortfall beyond saying it is studying alternative sources.
Sarnia Mayor Michael Bradley estimates 4,900 refinery and petrochemical jobs in his area are at risk, while a Kabir union in Sarnia estimates up to 6,000 direct employees could lose their jobs in a city of 72,000.
Ontario Energy Minister Greg Rickford said a permanent shutdown of Line 5 would result in more product being carried by trucks and rail, generating more greenhouse gas emissions and heightening the prospect of a destructive accident.
Bradley said scrapping the easement would violate a Transit Pipelines Treaty negotiated by former Canadian prime minister Pierre Elliott Trudeau (the father of the current prime minister) and then-U.S. President Jimmy Carter. The treaty was voted for by then senator and now U.S. President Joe Biden.
Enbridge has filed a suit in the Michigan Court of Claims “to establish the constitutional validity and enforceability of previous agreements … in order to remove obstacles to building (a new tunnel under the straits) as quickly as possible and ensure energy security and environmental protection for Michigan.”
Ontario Premiere Doug Ford said in a December letter to Whitmer that the shutdown of Line 5 “would threaten over 1,000 unionized jobs in Michigan and Ohio and result in a shortfall in regional fuel supply.”
The Canada Energy Regulator shows six refineries in Ontario and the U.S. Midwest rely on Line 5 for the bulk of their feedstock, while additional refineries in Quebec and the U.S. rely heavily on Line 5. In addition, petrochemical plants on both sides of the border making plastic or fracturing heating fuels throughout the region also use the line.
A Canadian subsidiary of Houston-based Plains All American Pipeline said its three facilities in Ontario, Wisconsin and Michigan would close if Whitmer refuses to seek a compromise.
Warning of price spike Sterling Koch, Plains Canadian vice president, warned that shutting down the Michigan and Wisconsin facilities would case a massive price spike in both states for heating fuel.
“In the medium term, propane shortage-induced price impacts would be expected to be much more severe and lasting that those experienced during the polar vortex induced shortages in the winter of 2013-14 that prompted Michigan and several other surrounding states to declare a state of emergency,” he wrote in a letter to Whitmer.
Enbridge’s president of liquids pipelines Vern Yu said the twin lines under the Straits of Makinac “are safe and in full compliance with the (Canadian) pipeline safety standards that govern them.”
He said Enbridge has no intention of shutting down Line 5 based on Michigan’s unspecified allegations that the pipeline poses a danger.
Repeated offers by Enbridge over the past year to meet with Michigan state officials to discuss issues of concern, to provide technical information and to discuss matters that might be helpful in the state’s review of the easement have been ignored or dismissed.
Eric Pardini, a director with Lansing-based Public Sector Consultants, who led a state-commissioned study outlining pathways to transition the Upper Peninsula’s propane sector, said he has “optimism” in that prospect, “but it doesn’t give me peace.”
He said that sets up a “game of chicken” between the industry and the Whitmer administration over urgent changes that are vital to save thousands of jobs in the Upper Peninsula.
- GARY PARK
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