Michigan Governor Gretchen Whitmer’s office says a key petroleum pipeline for Central Canada that runs through the Great Lakes state is a “ticking time bomb” and that Calgary-based operator Enbridge Inc. would be breaking the law if it doesn’t shut it down next week as she has ordered.
Bobby Leddy, press secretary to Ms. Whitmer, said the Governor’s position is that Enbridge must stop operating Line 5 by May 12.
“As of that date, Enbridge’s continued operation of the Line 5 pipelines in the Straits of Mackinac would be unlawful,” Mr. Leddy said in a statement.
Last November, Ms. Whitmer, citing the risk of an oil spill, announced that she would revoke an easement granted in 1953 that allows Line 5 to cross the Straits of Mackinac, a waterway in the state. Her order takes effect May 12.
Ms. Whitmer’s announcement last fall followed a campaign promise during her 2018 gubernatorial race to shut down the pipeline, which is currently submerged as it crosses the straits, carrying up to 540,000 barrels a day. Line 5 splits into two pipelines while crossing the water and then merges back into one afterward. During her announcement, Ms. Whitmer cited instances in 2018 and 2019 where the pipelines were struck, but not punctured, by anchors or cables from nearby vessels.
Line 5, which carries Western Canadian petroleum through the Great Lakes states and then back into Canada, is a key energy conduit for Ontario and Quebec.
Without Line 5, Ontario would be about 45 per cent short of the crude oil it requires, according to Enbridge. The supply from Line 5 is used, among other things, to produce gasoline and diesel for Ontario.
Enbridge Inc. has challenged Ms. Whitmer’s order in U.S. federal court, and the two sides have been in court-ordered mediation since mid-April. Enbridge has proposed building an underwater tunnel to better protect the pipeline as it crosses the Straits of Mackinac, but this will take several years.
Enbridge says it does not intend to stop operating the pipeline next week. “We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely,” said Vern Yu, Enbridge’s executive vice-president.
He said Line 5 is operating safely and reliably and is in compliance with the law, and that the State of Michigan has not presented “any concrete evidence” to suggest otherwise.”
Ottawa says it believes that Enbridge would not be required to comply with the May 12 deadline because no court has confirmed the Governor’s order and both sides are still in mediation.
Ms. Whitmer’s press secretary said the Governor stands by her decision.
“These oil pipelines in the Straits of Mackinac are a ticking time bomb, and their continued presence violates the public trust and poses a grave threat to Michigan’s environment and economy,” Mr. Leddy said.
The pipeline from Michigan is also a critical source of supply for the Line 9 pipeline that runs from Ontario to Quebec and provides between 40 per cent and 50 per cent of the crude oil used by Quebec refineries to make gasoline and other fuels.
Ottawa is likely to intervene in the Line 5 court case on or before May 11, two federal government sources said. The presiding judge has set that date as the deadline for “friends of the court” briefs and Canada is seriously considering making its own submission, the sources said. The Globe and Mail is not identifying the sources because they were not authorized to discuss potential legal decisions publicly.
Businesses have warned that a shutdown could trigger significant layoffs of refinery jobs in Sarnia, Ont., and would be a blow to Western Canadian crude producers as well. Ontario has warned the shutdown will cost more than 5,000 direct jobs and more than 23,000 indirect jobs.
Michigan’s Mr. Leddy said Enbridge has had adequate warning. The Governor, together with the Department of Natural Resources, issued a notice of termination of the 1953 easement, he said.
“The notice gave Enbridge 180 days to arrange for shutdown, and subsequent decommissioning, of the pipelines. That 180 day period expires on May 12.”
Enbridge’s Mr. Yu, however, said the State of Michigan is arguing that the matter belongs in state court, not federal court. “The question of whether the state’s case belongs in federal or state court is not likely to be resolved by May 12,” he said. Plus, he said, the two sides are scheduled to continue mediation efforts on May 18.
Richard Studley, president of the Michigan Chamber of Commerce, accused Ms. Whitmer of being “reckless and irresponsible” in trying to shut down a pipeline that he said is critical to Michigan and Canada.
“Governor Whitmer’s anti-business, unfriendly actions toward Canada are not shared by the vast majority of Michiganders who understand that our friends and neighbours in Canada are critically important trading partners.”
Joe Comartin, Canada’s consul-general in Detroit, said he does not foresee a Line 5 shut down next week. To be enforced, the Governor’s order would require a “confirmatory court order” granted by a judge at the state or federal level, Mr. Comartin said, adding he has not seen evidence this has been set in motion.
Mr. Comartin said he feels it’s unlikely a court would grant this order while mediation is taking place. “That process is under way. … I feel confident any court or judge would say you have to let the legal process roll out.”
Also he said to obtain such emergency relief, the Governor would have to show an immediate high-risk danger and no such evidence exists.
The federal government has previously warned it might invoke the Canada-U.S. transit pipelines treaty of 1977, which was designed to ensure the “uninterrupted transmission” of pipelines that transports petroleum through another country.
Toronto trade lawyer Larry Herman of Herman & Associates said Prime Minister Justin Trudeau should now speak directly to U.S. President Joe Biden on the matter, “not just to reinforce U.S. commitments under the 1977 pipeline treaty, but to stress the significant damaging impact cutting off Line 5 would have on the entire bilateral relationship.”
Suncor Energy Inc., like many oil producers, has already developed contingency plans should Line 5 be shut down. Chief executive officer Mark Little told The Globe that Suncor’s refineries in Sarnia and Montreal will be part of the contingency plans.
Mr. Little said the Calgary-based company can also use the Portland-Montreal Pipeline, a 380-kilometre system that carries in crude from Portland, Me., to Suncor’s refinery and Enbridge’s terminal in Montreal.
Pivoting to other pipelines and different refineries will result in additional costs for Suncor, but Mr. Little said the biggest impact will be on consumers who live in the region.
“Whether it’s in Michigan or whether it’s in Ontario or whether it’s in Quebec, this is going to drive up product prices and hurt the end consumer,” he said.
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