Today is the day that Governor Whitmer of Michigan has ordered Enbridge’s Line 5 to be shut down
By Bruce Carson
NATIONAL ISSUES
Today is the day that Governor Whitmer of Michigan has ordered Enbridge’s Line 5 to be shut down.
There will, no doubt, be protests against the pipeline, but the possibility of it being shut down is quite remote.
Remote or not, it is important to reflect on how we got here, a completely untenable position where once again, within the space of four months a Canadian pipeline is being threatened by the United States.
On January 20, 2021, hours after being sworn into office, President Biden revoked the permit held by TC Energy for the Keystone XL pipeline to cross the Canada-U.S. border.
Now less than four months later Canada is in a similar position regarding a pipeline that is fully operational.
The order delivered by Governor Whitmer, a supporter of President Biden, as he is of her, is to shut down Enbridge’s Line 5 pipeline today. This is a pipeline that carries 540,000 barrels per day of oil and serves Ontario, Quebec, Michigan, Ohio and Pennsylvania. It has been operating for 68 years.
The pipeline according to Vern Yu of Enbridge operates safely and this has been confirmed by the United States Pipeline Hazardous Material Association.
It is not the “ticking time bomb” that Whitmer alleges it to be. But just in case it was, a remedy was found in the proposed construction of a tunnel which will encase the pipeline under the Straits of Mackinac which is due to be completed in 2024. Some permits have already been granted for the project.
The pipeline is a vital energy artery between Canada and the U.S., providing jobs and energy security for millions who live and work on both sides of the Canada-U.S. border.
The pipeline supplies oil required in Ontario and Quebec and delivers oil and natural gas liquids to refineries in Detroit, Toledo and Warren, Pennsylvania. It is the source of jet fuel for Pearson airport and for the Detroit Metropolitan airport.
Alex Pourbaix who heads up Cenovus placed a very practical gloss on this matter saying that people will find out very quickly how important oil and gas, propane and butane are to the economy. He also made the valid point that with a shutdown of the pipeline “you’re not going to be improving safety.”
The demand for energy will still exist but it will be delivered by barge, truck and rail; methods that are not as safe and with higher emissions.
Susan Ball of IHS Markit was quoted as saying “it really begs the question of over the long term, is it possible for us to have energy infrastructure that crosses international borders to serve Canadian customers? She added “it (pending shutdown) does get to the heart of energy security.”
Canada’s Ambassador to the United States Kirsten Hillman said last week that the shutdown “is not a threat to Canada’s national economic or energy security.” She added that the “dispute between Enbridge and the State of Michigan needs to be taken seriously and we are taking it seriously.”
It should be taken seriously as closure of the pipeline will mean job losses of 5,000 direct and 23,000 indirect jobs in Sarnia and area, as well as job losses in the United States. The cost of fuel will rise as well.
Enbridge is fighting the potential closure in federal and state courts and at present Enbridge and Michigan are engaged in mediation with the next session scheduled for May 18.
During an earnings call last Friday, Al Monaco, who heads up Enbridge said “the courts are reviewing the state’s challenge to the pipeline and that’s going to take a while, so no decisions in our view are imminent.” This corresponds with Ambassador Hillman’s statement “we understand from the advice that we have received that there is a good chance that the pipeline will continue operating during the course of litigation and mediation.”
However, on Monday Natural Resources Minister O’Regan said in question period “we’re ready to intervene at precisely the right moment.” Well it seems that the right moment came yesterday as Canada finally acted by filing in support of Enbridge an “amicus curiae” brief with the federal district court.
The amicus brief presented by former U.S. Ambassador to Canada, Gordon Giffin made two points. First, Line 5 is vital to Canada’s energy security and economic prosperity and similarly vital to Michigan, Ohio and Pennsylvania. Second, the 1977 agreement between Canada and the U.S., the Transit Pipeline Treaty prevents a state level government from shutting down a pipeline running between Canada and the United States was set out in the brief.
Regardless of court proceedings or the results of mediation, this dispute should not have reached this stage, when one takes into consideration the ongoing energy relationship between Canada and the U.S. Canada is the largest supplier of energy to the United States and second largest destination for U.S. energy exports behind Mexico.
Another way to approach these issues was set out in a recent op-ed penned by Alberta Senator Doug Black and Gary Mar who heads up the Canada West Foundation.
They make the point that there is an opportunity for Canada and the U.S. (as energy powers with ambitious climate agendas) to help each other meet economic and environmental obligations. They propose that a “meaningful, measurable and enduring energy strategy” be crafted. The partnership would start with Canada and the U.S. but expand later to include Mexico.
An interconnected and interdependent bilateral energy system would bring value to both countries, they argue.
The strategy has two planks; first a comprehensive emissions reduction plan led by emission reduction technology such as carbon capture and storage and tackling the methane challenge. The second plank is a “serious commitment to energy security.”
They wrote that “we can be a continent that powers itself and does not have to worry about natural or military threats to our energy supply.” We need to strengthen what connects us by updating and modernizing transportation infrastructure across the continent including ports, pipelines broadband, roads and railways.
This could begin with a binational environment and energy working group tasked
with building out the strategy. This Task Force should be struck at the earliest opportunity.
Surely working together on a common energy and environment strategy is far better than attacking pipeline infrastructure in the courts.
It is also becoming readily apparent that the Biden administration is not about to do Canada any favours. It hasn’t yet on Buy American and yesterday U.S. Energy Secretary Jennifer Granholm said that the Enbridge-Michigan matter was one for the courts to decide.
It’s time to adopt a different approach.
To Come
Today
Deadline set by Michigan governor to shut down Line 5
May 14
Monthly survey of manufacturing for March to be released
Wholesale trade numbers for March to be released
May 19
CPI numbers for April to be released
May 21
Retail trade numbers for March to be released