Enbridge Inc. is taking legal action against Michigan over the state’s insistence that the company shut its Line 5 crude oil pipeline down within two years, even though a proposed replacement will not be ready before 2024.
The company walked away from talks with the state about the future of the pipeline on Tuesday, according to Michigan Governor Gretchen Whitmer’s office, and is pursuing litigation in an increasingly fractious battle.
“It is now abundantly clear that Enbridge … is only interested in protecting its bottom line,” Ms. Whitmer said in a statement, which included a reminder that the company’s Line 6B pipeline ruptured in 2010, spilling diluted bitumen into a tributary of the Kalamazoo River, one of the largest inland oil spills in U.S. history.
Enbridge had an agreement with the previous state government to build a tunnel to house a replacement section of the Line 5 pipeline, which runs underwater across the Straits of Mackinac between Lake Michigan and Lake Huron.
The tunnel could be finished by 2024, Enbridge has said, but that schedule wasn’t acceptable to the current state government. The company said on Thursday that Michigan has demanded it cease operations of its existing Line 5 within two years.
“It’s a timeline in which the tunnel cannot possibly be complete,” said Guy Jarvis, Enbridge’s executive vice-president for liquids and pipelines.
Company executives told reporters on Thursday that shutting off Line 5 before the replacement is complete would jeopardize Michigan’s energy supply. The pipeline delivers crude oil to refineries in Southwestern Ontario and takes petroleum products such as diesel and propane back to Michigan.
A Line 5 shutdown would also exacerbate the shortage of pipeline capacity for Alberta oil, which has weighed on Canadian crude prices and forced the energy industry to find more expensive shipping options.
Richard Masson, an executive fellow at the University of Calgary School of Public Policy, warned that shutting the line before a replacement is ready would prevent more than 500,000 barrels a day of crude oil from leaving Alberta, and choke the supply to refineries near Sarnia, Ont., that make gasoline Canadians use in their cars.
“We have no slack in the system. The system is way overburdened already," Mr. Masson said. "I think everybody is very worried.”
Michigan’s Attorney-General, Dana Nessel, overturned Enbridge’s agreement with the previous state administration on the plan for a tunnel on the grounds it was unconstitutional. In a formal legal opinion written in March, Ms. Nessel said the law allowing the project was flawed because the title didn’t reflect the text.
Now, Enbridge is asking the Michigan Court of Claims to affirm that the previous agreement is valid and enforceable.
But leaving the 65-year-old pipeline as is poses a serious risk to the lake system that contains 21 per cent of the world’s fresh water, Michigan’s government and environmentalists say. Fears were stoked last April when a tugboat’s anchor stuck and dented the exposed pipeline, although it did not rupture.
“It would be absolutely catastrophic to the Great Lakes if there’s a rupture,” said Maude Barlow, a Canadian author and water activist with the Council of Canadians.
“They’re asking the people of the Great Lakes to take a chance that this thing won’t rupture between now and 2024."
Enbridge says Line 5 has always operated safely, and the section in the straits is subject to the most extensive risk management plan in the company’s entire pipeline system.
Ms. Barlow said the company might have grounds to launch a challenge under Chapter 11 of the North American free-trade agreement, which allows legal action against foreign governments if they change laws regarding a deal after investments have been made. The chapter, however, will be eliminated if the new United States Mexico Canada Agreement is ratified.