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Enbridge Line 5 shutdown prompts Michigan debate over risks vs. economic harm

The Line 5 pipeline beneath the Straits of Mackinac is no longer transporting petroleum products, after a judge on Thursday ordered a temporary shutdown — giving Michigan a preview of the permanent shutdown some in Michigan have long desired and others have long fought. 

The shutdown, which comes a week after pipeline owner Enbridge Energy reported damage to an anchor support on the pipeline, has been met with cheers from opponents who decry Line 5 as an unacceptable oil spill liability in the Great Lakes, and jeers from supporters who say the pipeline is critical infrastructure whose risks have been overblown.

In a statement Thursday, Michigan Attorney General and Line 5 critic Dana Nessel said she was grateful for the ruling, but it is “only a short-term fix.”

Nessel and Gov. Gretchen Whitmer both campaigned for office in 2018 on a promise to shut down Line 5. Nessel is pursuing lawsuits intended to permanently shutter the pipeline and has said she believes Whitmer has legal authority to revoke a 1953 easement that gives Enbridge permission to site the line in the Straits.  

“If the lines are put back into operation, one mismanaged incident or accident would result in a historic catastrophe for our state,” Nessel said in the statement. “Work must continue toward complete removal of Line 5 from our waters.” 

Enbridge and Line 5 advocates, meanwhile, panned the decision temporarily shutting down Line 5.

“Enbridge is disappointed in the court’s ruling as we believe that Life 5 is safe,” said Vern Yu, the company’s executive vice president and president of liquids pipelines, in a statement.

Sen. Ed McBroom, R-Vulcan, called the shutdown “silly” and accused Nessel of resorting to legal action without giving Enbridge time to cooperate with the state. He questioned whether Nessel’s concern was truly about pipeline safety or a “vendetta” against the petroleum industry. 

Enbridge contends even a short-lived shutdown would bring “immediate and severe” economic consequences. A prolonged shutdown, a company statement released Thursday said, would yield “critical gasoline supply shortages and gasoline price increases for consumers in Michigan and the surrounding region.”

But industry experts predicted that as long as if the shutdown remains short, Michigan fuel supplies should remain stable and prices should increase by a couple of cents per gallon at worst.

“It’ll be a blip,” said Phil Flynn, senior energy analyst at The PRICE Futures Group in Chicago. 

A weeklong battle

Thursday’s news of a temporary shutdown is the latest twist in a weeklong battle between state officials and Enbridge, after the company discovered June 18 that an anchor support on one of the pipeline’s two spans beneath the Straits of Mackinac has sustained “significant damage.”

After detecting the damage, Enbridge stopped petroleum transports in both legs of the pipeline and used divers and a remote-operated vehicle to investigate. 

By Saturday afternoon, Enbridge had reopened the west leg after determining it was not damaged.

That prompted a protest from Whitmer and Nessel, both of whom said Enbridge had failed to adequately consult the state on what was known about the damage or the company’s decision to restart production through one of the twin lines. 

In a letter Saturday, Whitmer asked Enbridge CEO Al Monaco to shut down the line and provide the state with engineering reports, photographs, video and other evidence of the damage, as well as a full report about what caused the damage and how Enbridge will prevent it from happening again.

Enbridge continued to operate the west line, arguing that it answers to federal regulators with the Pipeline and Hazardous Materials Safety Administration, or PHMSA, and not to the state. Federal regulators had “no objections” to reopening the west leg, Enbridge spokesman Ryan Duffy said in a statement. 

That assertion, combined with what Whitmer called a unilateral decision to partially reopen the pipeline without gaining state approval, prompted Nessel on Monday to seek a temporary restraining order and injunction to temporarily shut down the pipeline.

In a decision issued Thursday, Ingham County Circuit Court Judge Jamo granted that request. Enbridge must cease operations on both legs of Line 5 “as immediately as possible,” Jamo wrote, and the pipeline must remain closed until Jamo rules on the injunction request. A hearing is scheduled for 1:30 p.m. Tuesday.

Enbridge still has not said what damaged the anchor support. In photos the state released Thursday, the anchor support appears to have been wrenched askew. An Enbridge report on the damage, which the state released Thursday evening, notes the support experienced “longitudinal loading” that did not significantly damage the pipeline itself.

In his order, Jamo said Enbridge was in violation of a 1953 state easement that grants the company permission to site the pipeline in the bottomlands. That agreement also requires Enbridge to exercise “due care” in its Line 5 operations, the judge noted. 

By failing to provide the state with “sufficient documentation” related to the damage, Jamo wrote, Enbridge left the state unable to assess any lingering risk of harm, violating the easement. 

Economic concerns or ‘scare tactics’?

Line 5 opponents, who have long called for the pipeline’s shutdown on grounds that it poses a potentially catastrophic oil spill hazard in the Great Lakes, celebrated the order while calling on Whitmer to permanently shut down the pipeline. 

“Judge Jamo made a really wise decision,” Sean McBrearty, of the group Oil & Water Don’t Mix, told Bridge. “Now we need Governor Whitmer to take the next step and revoke the easement.”

Jamo’s decision prompted an outcry from Line 5 proponents, who said they worry the temporary shutdown will imperil jobs and raise fuel prices in Michigan and elsewhere.

The line transports up to 540,000 gallons of crude oil and natural gas liquids across the Straits daily as it travels between Wisconsin and Ontario. 

The pipeline provides nearly 88 percent of the Upper Peninsula’s propane, and its proponents often note that without the pipeline, the region’s already-high energy prices would likely rise higher. 

In addition to the impact on fuel supplies, McBroom, whose Senate district covers most of the Upper Peninsula, said he worries about the economic impacts of work stoppages caused by the shutdown. 

“The products that are in this line employ hundreds, if not thousands, of people,” said McBroom, R-Vulcan. “To adversely impact them is a shame.” 

Enbridge, for its part, contends that shutting down the line will create a shortfall of 14.7 million gallons of transportation fuel a day, affecting fuel prices and putting refineries at risk of closure. Refineries in Detroit, Ohio and Ontario use oil from Line 5.

McBrearty, of Oil & Water Don’t Mix, called those figures misleading. “It’s a scare tactic that Enbridge has been using for years,” he said.

Analysts and industry representatives who spoke to Bridge about Jamo’s order said a temporary shutdown is not likely to wreak the havoc some say they fear. 

Mark Griffin, president of the Michigan Petroleum Association, which represents gas stations, truck stops and propane providers, said a short-term shutdown of a few days won’t noticeably impact his members or result in fuel higher prices for consumers.

“But the longer it lasts, the worse it means for the cost of petroleum products,” he said.

Concerns over the potential impact of a Line 5 shutdown prompted Whitmer last year to form a task force charged with identifying alternative modes of getting propane to the Upper Peninsula in the event of a prolonged shutdown. The task force offered 14 recommendations, such as exploring options for increasing propane storage in Michigan and expanding rail transport options.

Eric Pardini, director of Public Sector Consultants, led a study that helped the task force form its conclusions. Pardini said any disruption in Line 5 will affect propane supplies in the Upper Peninsula, but that impact is tempered by the fact that this shutdown is happening during the summer, when demand is low.

June through August represent a combined total of less than 10 percent of annual propane consumption in Michigan, he said, so “as far as customers go, it’s really opportune timing.”

Pardini said the temporary shutdown highlights the “outsized level of risk” to the Upper Peninsula’s propane supply because it relies so heavily upon a pipeline that represents a “single point of failure.” 

If Line 5 becomes unavailable for any reason, “there aren’t a lot of other options.” 

Advocates for the line’s shutdown, meanwhile, noted that any temporary economic impact pales in comparison to the risk of a catastrophic oil spill in the straits, should the line be deemed unsafe as a result of last week’s damage.

Pipeline safety expert Richard Kuprewicz, president of Accufacts, Inc., said Enbridge bears a high burden of proof that the damaged anchor support doesn’t pose a spill risk, and Michigan officials are justified in their quest for complete information about the circumstances surrounding the damaged anchor support. 

Many Michiganders distrust the company, he said, because of the 2010 transmission line failure that caused 1.2 million gallons of oil to spill into a tributary of the Kalamazoo River from an Enbridge line. 

Line 5’s placement at the bottom of the Straits poses an even greater risk, Kuprewicz said. Whatever the economic impact of a temporary shutdown, he said, it pales in comparison to the potential damage a spill would wreak.

“You want to see a change in the economics?” he said. “Put oil in the Great Lakes.”

Jamo appears to have reached a similar conclusion in his review of Nessel’s shutdown request. In ordering the pipeline closed, he wrote that the danger of continuing to operate without assurance that the pipeline is safe following the anchor support damage “far exceeds the risk of financial loss,” of a temporary shutdown.

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