This group brings together those who are interested in topics around oil and gas exploration, drilling, refining, and processing.

Post

Line 5 Shutdown Has Serious Implications In Canada

A recent court decision in Michigan could have major implications for the energy security of Ontario and Quebec. A Michigan judge recently ordered the temporary shutdown of Enbridge’s Line 5 oil pipeline that runs from Superior, Wisconsin to refineries in Sarnia, Ontario.

Shutting down Line 5 has serious implications, for residents of Ontario and Quebec, as well as Michigan itself. Line 5 transports 540,000 barrels per day of oil and natural gas liquids into the Sarnia area (about half of the pipeline capacity to Ontario). Facing a potential supply cut, anxiety has been rising in southern Ontario. If Line 5 is shut down the lack of supply and Ontario’s returning demand for refined products could have a drastic effect on gasoline prices in the region.

Jon Harding, an Imperial Oil spokesperson noted:

“Reducing rates will likely result in shortfalls of gasoline, diesel and jet fuel in our distribution points in southern Ontario. That would happen within approximately a week.”

Quebec could also be affected and see rising prices in the area. Enbridge predicts a shortage of about 45 percent for these products in the region. This will risk rationing and higher prices for commuters and transport for an economy already hard hit.

It is these kinds of scenarios that put a very energy-rich country like Canada in a position where it is no longer energy secure.  As energy expert Peter Tertzakian noted early this year, we could end up in a situation like the 1973 Arab Oil Embargo, where we had to import our own oil using tankers and the Panama Canal. In a country that is the fourth largest producer of crude oil in the world, it is poor policy that leaves us with energy supply risks.

Line 5 runs 1038 kilometers from Superior, Wisconsin to Sarnia, Ontario. The pipeline has been around for 67 years without incident. It runs underwater across the Straits of Mackinac in Michigan, which is one of the reasons it has been highly contested by the current Michigan Governor and Attorney General. However, the pipeline splits into two smaller, stronger pipes called the west and east wing under the straits. These pipes are made with thicker metal and a smaller diameter to reduce the risks of a leak or anchor strike.

For the last few years, Enbridge has been trying to replace the pipeline with a newer one. They want to encase it in a concrete tunnel to ensure that in a worst-case scenario, they would be able to contain a leak. Despite these plans to replace the current pipeline, the Michigan Gov. Gretchen Whitmer and Attorney General Dana Nessel have continued to fight against the company.

The suspension of Line 5 operations comes after the pipeline company notified federal regulators that and anchor point had shifted on a section of the eastern leg of pipeline that runs under the Straits of Mackinac.  They immediately shut both sides down to evaluate the situation. Upon completing their inspection, Enbridge found that the western portion was able to continue operating after consulting with the federal safety regulators. The eastern portion continued to remain closed until further discussion with state officials.

Despite the precautions taken by Enbridge, the AG filed an injunction with Ingham County to halt all operations. Judge James Jamo ruled to temporarily suspend operations until a hearing on June 30th, 2020.

This is not the first time Michigan officials have tried to shut down this pipeline. Gov. Whitmer and AG Nessel had been working together to kill Line 5 since before they were elected.  Last year, AG Nessel filed a public nuisance lawsuit against Enbridge after striking down Enbridge’s lawsuit to enforce agreements made with the previous administration.  She lost and is in the process of appealing. AG Nessel is involved with a program through NYU’s law school, funded by Michael Bloomberg, which funds special assistant attorney generals around the country for the purpose of bringing environmental litigation. She’s currently fighting requests for documents related to her involvement in the program.

It appears the moves by AG Nessel and Gov. Whitmer to kill Line 5 goes against the will of the house of representatives in Michigan. Recently, there was an overwhelming vote in favor of the timely issuing of permits for Line 5’s replacement and the Great Lakes Tunnel Project. In an 80-28 vote including 46 percent of Michigan House Democrats, the House voted in favor, against the Governor.  Enbridge also recently received approval from the Michigan Court of Appeals to build the utility tunnel to support the new pipeline. An earlier ruling from the U.S. Sixth Circuit Court of Appeals confirmed the emergency response for the pipeline to be adequate to protect wildlife in the Straits of Mackinac.

Ohio’s Attorney General and Lieutenant Governor also see the benefits of the pipeline. On Monday June 29th, AG Yost and the Attorney Generals of Indiana and Louisiana filed an 11-page brief discussing the negative impacts of shutting down Line 5.

From the outcome of these decisions, the Michigan Attorney General and Governor’s Office do not seem to care about court rulings and regulatory approval, they are simply playing politics. The new pipeline and utility tunnel were all approved under the previous administration of Gov. Rick Snyder. In November 2019, the courts in Michigan upheld the agreements. However, as one could imagine, this did not sit well for environmental groups like Oil and Water Don’t Mix who have been vehement supporters of the Governor and Attorney General’s crusade against Line 5.

This fight is also not about petroleum itself, but about the pipeline. AG Nessel has previously suggested that oil be transported by rail and trucks. These methods have their own safety concerns. Oil by those means will also only be able to make up for 10 percent or less of that drop in supply.

If the shutdown becomes indefinite, this will be a major issue for Canada’s energy security and cause problems for refiners and citizens on both sides of the border.

Cody Ciona is the Research and Issues Coordinator for Canadian Energy Network. This post was originally published here

The post Line 5 Shutdown Has Serious Implications In Canada appeared first on .

Energy in Depth's picture

Thank Energy in Depth for the Post!

Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.

Discussions

No discussions yet. Start a discussion below.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »