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 Added on November 16, 2020  Sara Swanson

Whitmer orders Enbridge Line 5 shutdown, citing easement violations

by Kelly House, Jonathan Oosting (Bridge)

Following a state review that found the Line 5 petroleum pipeline is putting the Great Lakes at risk, Michigan has ordered Canadian petroleum company Enbridge Energy to shut down the pipeline that runs through the Straits of Mackinac by May.

The Friday announcement followed a long-awaited review of Enbridge compliance with a 1953 state easement that allows Enbridge to operate its pipeline in the Straits.

A state’s statement said Enbridge has committed “persistent and incurable” easement violations, prompting Gov. Gretchen Whitmer to notify Enbridge it must permanently stop operating the dual-span pipeline within 180 days. Separately, Michigan Attorney General Dana Nessel has filed a lawsuit asking the Ingham County Circuit Court to terminate the easement.

“Enbridge has imposed on the people of Michigan an unacceptable risk of a catastrophic oil spill in the Great Lakes that could devastate our economy and way of life,” Whitmer said in a statement. “That why we’re taking action now, and why I will continue to hold accountable anyone who threatens our Great Lakes and fresh water.”

In its own statement Friday afternoon, Enbridge said it is reviewing the matter and plans “a more thorough response through the legal process.” A company spokesman did not immediately respond to a question about whether Enbridge plans to comply with the state order.

In its statement, Enbridge also accused the state of failing “to engage” the company in its easement review, which the company contends violates an agreement between the state and Enbridge.

Vern Yu, the company executive vice president and president of liquids pipelines, called the state notice and the DNR report “a distraction from the fundamental facts.”

“Line 5 remains safe, as envisioned by the 1953 Easement, and as recently validated by our federal safety regulator,” Yu wrote. “We will continue to focus on the safe operation of the dual Line 5 pipelines at the Straits of Mackinac, ensuring the Great Lakes are protected while also reliably delivering the energy that helps to fuel Michigan and the region economy.”

State officials found that the easement violates the public trust doctrine, and the risk of an oil spill associated with continuing to operate the pipelines “cannot be reconciled with the public right in the Great Lakes and the state duty to protect them.”

The state cited recent anchor strikes that damaged Line 5 as evidence of the risk, along with concerns that the pipeline has “structural problems.”

Nessel lawsuit seeks the court’s declaration that the state properly revoked the easement and an injunction to shut Line 5 down within 180 days and permanently decommission the pipeline.

Among additional violations, the state alleges: Enbridge ignored pipeline support requirements “for virtually the entire time the Easement has been in place” by allowing spans more than 75 feet long to hang unsupported by the lakebed or an artificial support structure. Enbridge also failed to ensure the pipeline is properly coated, at times resulting in “bare metal” that was not immediately fixed. The state also alleges that bends in the pipe raise concerns about its structural integrity.

These issues cannot be corrected, the state alleges, and thus a shutdown is the only remedy available to the state.

The 67-year-old pipeline, which transports up to 540,000 barrels daily of crude oil and natural gas from Wisconsin to Ontario through the Straits of Mackinac, has been a political flashpoint for years because of concerns that a rupture would cause a catastrophic oil spill in the Straits.

Public concern about its safety emerged in the wake of the 2010 Kalamazoo River Oil spill, in which a rupture on another Enbridge-owned line sent more than 840,000 gallons of crude oil streaming into the Kalamazoo River.

Repeated anchor strikes along Line 5 heightened concerns, prompting an agreement during then-Gov. Rick Snyder administration that granted Enbridge permission to replace the current pipelines with new pipe encased in a tunnel deep beneath the lake bottom. That decision has since produced more litigation over the company plan to construct the tunnel.

Enbridge opponents, who had long pressured Whitmer to revoke the easement, met Friday announcement with cheers.

“It has been a long time coming,” said Beth Wallace, a Great Lakes partnerships manager with the National Wildlife Federation.

“We clearly cannot continue to wait up to a decade for an alternative [the proposed tunnel] that could possibly fall on its face at any point,” Wallace said. “This is what has needed to happen, ever since the first anchor strike occurred.”

Liz Kirkwood, executive director of the water nonprofit For Love of Water, called the news “historic” but warned that the pipeline continues to pose a spill risk.

“We must remain vigilant until the oil stops flowing for good in May 2021 because Line 5 remains exposed to uncontrollable and powerful forces, including exceptionally strong currents, lakebed scouring, new anchor and cable strikes, and corrosion,” Kirkwood said. “These forces dramatically increase the risk of this elevated, outdated pipeline collapsing and causing the unthinkable: a catastrophic oil spill in the heart of the Great Lakes.”

The announcement also prompted celebration from Michigan legislators who oppose Line 5, as well as national politicians including Rep. Ilhan Omar of Minnesota.

“Way to go @GovWhitmer!” tweeted Omar, whose state is also debating the merits of a proposed Enbridge pipeline. “Minnesota can follow your lead, it time.”

Whitmer campaigned for governor in 2018 in part on a promise to shut down Line 5, but had signaled no concrete plans to do so since taking office. However, the state relationship with Enbridge has grown increasingly strained in recent months after Enbridge refused to cooperate with state officials following an announcement in June that the pipeline had sustained “significant damage” from what appeared to be an anchor strike.

In the wake of the incident, Enbridge briefly shut down the pipeline, then resumed operations on one of the line two legs without first seeking permission from the state. The company claimed it didn’t need state permission because it answers to the federal government, not the state.

That prompted Nessel, the attorney general, to obtain a restraining order that partially shut down the pipeline for months. The order was connected to a broader suit in which Nessel seeks to void the 1953 easement.

Wallace predicted Enbridge will fight Friday decision “in every way they can.”

Sen. Wayne Schmidt, R-Traverse City, said someone from Whitmer office alerted him to the move just minutes before it was announced by press release. He called the news a “political stunt” that he doubts it will be successful.

“If this was truly something that would have worked, they would have done it last year,” Schmidt said. “I think this is, again, another Hail Mary distraction from working on not just the COVID pandemic response, but working with the Legislature on a variety of other policy fronts.”

It unclear what the shutdown announcement means for Enbridge tunnel plan. On Friday, Enbridge said it “remains committed” to the project.

Enbridge has applied for state and federal permits to build the tunnel, and the Michigan Public Service Commission is weighing whether to let the company move the pipeline inside the tunnel, should it be built.

Enbridge has repeatedly said it hopes to begin tunnel construction next year and finish building the tunnel by 2024, but that timeline has become increasingly unrealistic given the myriad hurdles the company must clear before breaking ground.

Enbridge has frequently countered calls to shut down the pipeline with dire predictions that a shutdown would strand Upper Peninsula residents who heat their homes with propane from Line 5 and imperil regional refineries that use oil from the pipeline.

Schmidt, whose senate district stretches from Traverse City in lower northern Michigan to Sault Ste. Marie in the Upper Peninsula, shares those concerns.

So does state Rep. Beau LaFave, R-Iron Mountain, a frequent Whitmer critic. He said U.P. propane prices “will increase by four to six times” if the revocation sticks.

“The vast majority (of residents) can afford to heat their homes right now, but if the governor wins — which I don’t think she will — they’re going to be reliant on the government instead of themselves, and that not how we want to operate up here.”

Spokespeople for Whitmer did not immediately respond to questions Friday afternoon about how the state plans to address the U.P. energy needs if Line 5 is shut down.

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. 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 who led a study that helped the task force form its conclusions, said the state decision to time the shutdown for next spring mitigates concerns about a disruption in propane supply.

May is the end of the winter heating season, he noted, so suppliers and distributors will have months to find alternative transportation modes before propane demand spikes in the fall.

“It seems like there was some careful thought about how we do this in a timeframe that allows us to prepare,” Pardini said.

Pardini study concluded that all alternative means of meeting the UP propane needs, such as rail transport, would likely cost more money than Line 5. But in many cases it was “close to cost parity,” he said.

Less certain, he said, is whether it possible to shift to other delivery means in a short time frame. It also unclear whether such a shift would lead to “market disruptions” elsewhere in Michigan, he said.

The task force did not consider the economic impacts of a shutdown on the region oil industry. Pardini said he has fielded concerns from Southeast Michigan and Ohio oil refiners who process Line 5 petroleum into jet fuel for airports in Detroit and elsewhere.

Phil Flynn, senior energy analyst at The PRICE Futures Group in Chicago, called Whitmer announcement “a warning call to the energy industry.”

That the announcement was made shortly after Joe Biden was pronounced to have won the presidential race is notable, he said. Biden made climate change a key priority during his campaign, and has promised to phase out oil.

Whitmer, a vocal Biden supporter who was an early contender to be his running mate, in September announced plans to make Michigan carbon-neutral by 2050. Line 5 opponents had openly wondered how Michigan could follow through on that plan while allowing the pipeline to continue operating.

The announcement in Michigan, Flynn said, is likely just the start of a “much tougher regulatory environment” ahead for the nation petroleum industry.

Sen. Schmidt said Michigan should hold Enbridge accountable for any safety failures to make sure the company is operating Line 5 in a safe manner, but “we can’t go back to the days of putting it all on barges and tankers and tracker trailers and rail cars. Pipelines have been shown to be the safest way to go.”

The Michigan Chamber of Commerce also railed against the shutdown news, warning that it would imperil jobs in the oil industry and endanger Michigan energy independence.

“‘Shut down line 5’ is a great bumper sticker and campaign slogan,” said Rich Studley, president and CEO of the Chamber. “It crappy energy policy and damaging to our state economic future.”

But Line 5 opponents counter that decommissioning the pipeline will create jobs tied to removing the pipeline from the water. And the pipeline continued operation imperils “millions” of jobs that depend upon the Great Lakes, Wallace said, along with drinking water used by many in Michigan.

“It really isn’t comparable, in my mind,” she said.