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Enbridge battles on
Judge orders shutdown of Line 5 in Great Lakes region over issues of safety; Enbridge gets Minnesota approval for Line 3 expansion Gary Park for Petroleum News
As North America’s largest energy pipeline operator, Calgary-based Enbridge is well-acquainted with setbacks amid some success.
It was the first in Canada to get tripped up by environmental and First Nations activists who made enough noise to scuttle Enbridge’s Northern Gateway pipeline plans, denying oil sands producers the chance to export 525,000 barrels per day of raw bitumen to Asia while importing 193,000 bpd of diluents on a parallel line.
That knock-back for Enbridge came from the freshly elected Liberal administration of Prime Minister Justin Trudeau, which imposed a ban on oil tanker traffic off the northern British Columbia coast in 2015, then a year later officially rejected the Northern Gateway proposal, wiping out thousands of construction jobs and billions of dollars in government revenues.
US opposition Now Enbridge is falling foul of activists and state legislators in the United States, who are campaigning to end the use of fossil fuels.
They have notched a partial victory through a temporary restraining order issued by a Michigan Circuit Court to shut down Line 5 at the urging of Michigan’s Democratic Governor Gretchen Whitmer and the state’s Attorney General Dana Nessel after a pipeline anchor shifted under the Straits of Mackinac connecting Lake Michigan and Lake Huron.
Enbridge Executive Vice President Vern Yu said the company was “disappointed in the court’s ruling as we believe Line 5 is safe; however, the west leg of Line 5 has been shut down.”
Nessel, in filing for an injunction, said Enbridge had “provided no explanation of what caused (the anchor) damage and a woefully insufficient explanation of the current condition and safety of the pipeline ... we cannot rely on Enbridge to act in the best interests of the people of this state so I am compelled to ask the court to order them to do so.”
Whitmer delivered a stringing rebuke to Enbridge, saying she was “taken aback to learn the company has unilaterally resumed operation of the west leg,” showing “disregard for the safety and well-being of our Great Lakes.”
Enbridge Chief Executive Officer Al Monaco fired back, describing the company’s efforts to inspect, repair and restart a portion of Line 5.
“We have spared no effort or expense in putting safety first and exceeding regulatory requirements, while moving forward expeditiously with the replacement of the Line 5 crossing (of the Straits of Mackinac),” he said.
Monaco was adamant that Enbridge will not resume operation on the east leg of Line 5 without a discussion with the State of Michigan and approval of the U.S. Pipeline and Hazardous Materials Safety Administration.
Fuel issue for Ontario, Quebec While that political and legal tussle continues, concern is building in Ontario and Quebec that they will soon run short of gasoline and diesel fuel, if refinery feedstock from Western Canada is threatened by an extended shutdown of Line 5.
Imperial Oil relies heavily on the 540,000 bpd Line 5 delivers to its two Ontario refineries - 119,000 bpd to the Sarnia facility and 113,000 bpd to the Nanticoke plant.
Shell Canada and Suncor said Line 5 is “critical” to their Ontario refineries, and the same applies to three refineries in the U.S. - Marathon Petroleum’s 147,000 bpd facility in Detroit and plants in Toledo, Ohio operated by BP and PBF Energy.
To a lesser extent, the pinch might also be felt in Quebec, which may have cause to rue its opposition to TransCanada’s planned 1.1 million bpd Energy East pipeline, that would have been built entirely within Canada, connecting the oil fields of Western Canada with Quebec refineries as well as the Irving Oil refinery and a tanker port (for shipments to Europe and Asia), both in New Brunswick.
Line 3 replacement On a more upbeat note for Enbridge, the Line 5 setback coincided with good news for the US$2.9 billion replacement of Line 3 from North Dakota to Superior, Wisconsin, to raise capacity to 760,000 bpd from the current 390,000 bpd.
Line 3 is part of a network of five Enbridge pipelines that deliver almost 3 million bpd from the Alberta oil sands.
The expansion has been aggressively challenged by environmentalists and Indian tribes, who have argued Minnesota does not need oil that exacerbates the effects of climate change and is a threat to lakes, rivers and forests.
But a five-member panel of the Minnesota Public Utilities Commission voted 4-1 on June 24 to deny the petitions for reconsideration of earlier approval of the Line 3 project, which has been examined by regulators and courts over five years.
The PUC, after a half-hour discussion, voted to uphold Line 3’s certificate of need and route permit, reasoning that the benefits of replacing an old, corroding pipeline with a new, modern one, outweighed the impact on climate change and the environment.
“A new pipeline with thicker and safer materials, constructed with up-to-date safety standards by skilled laborers operating under prevailing wage laws, is a better outcome than leaving an old pipeline,” said PUC chair Katie Sieben.
Matt Schuerger, the only panel member to agree with project opponents, said additional hearings were needed to weigh new evidence on the demand for Canadian oil in light of COVID-19, climate change, the growth in electric usage by vehicles and changes Enbridge has made to its allocation of pipeline capacity.
Line 3 opponents are expected to try at the Minnesota Court of Appeals to overthrow the PUC approval.
The administration of Minnesota Gov. Tim Walz, Democratic-Farmer-Labor Party, has not said whether it will file to overturn the Line 3 ruling, although the Minnesota Department of Commerce has argued Enbridge has failed to prove there is a long-term demand for the oil Line 3 would carry.
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