Great Lakes Pipeline Adds Heat to U.S.-Canada Energy Tensions
January 19 2021 - 7:54AM
Dow Jones News
By Vipal Monga
TORONTO -- Canadian and U.S. officials are at odds over the fate
of a pipeline underneath the Great Lakes, exacerbating
disagreements over energy policy between the two nations as the
Biden administration prepares to take office.
Citing environmental concerns, Michigan state officials have
told Enbridge Inc. to close its Line 5 pipeline, which carries more
than half a million barrels of oil and natural gas liquids each day
from Superior, Wis. to Sarnia, Ontario. Canadian officials say
closing the pipeline would choke off more than half of the supply
used to make gasoline, jet fuel and home-heating oil for the most
populous parts of the country. The 645-mile pipeline, which is part
of Enbridge's mainline system that conveys oil and natural gas
liquids from Alberta, feeds refineries in Michigan, Ohio,
Pennsylvania, Ontario and Quebec.
"Pipelines are so vital to the economy and the recovery," said
Chris Bloomer president of the Canadian Energy Pipeline
Association, a trade group. "We're hoping for some pragmatism."
The dispute adds another point of conflict in the energy
relationship between the U.S. and Canada. Officials, companies and
environmentalists in both countries have clashed in recent years
over how to balance energy security with environmental
concerns.
President-elect Joe Bien's team has said that he opposes a
proposed extension of TC Energy Corp.'s Keystone pipeline, which
would carry oil from Alberta to Nebraska. Canadian Prime Minister
Justin Trudeau, who has long advocated for the extension, has said
it would be a key issue between the two countries during Mr.
Biden's tenure. Canadian officials said they expect Mr. Biden to
stick with his plans to scrap the project.
Calgary-based TC Energy earlier this month started taking bids
for space on the pipeline, saying that it was confident the project
would get built. TC Energy has also proposed overhauls -- including
a pledge to use only renewable energy -- in a bid to win Mr.
Biden's support for the project. Environmental groups oppose the
pipeline because of the threat of damage from spills and because
they want to reduce the amount of oil extracted from Canada's oil
sands.
Enbridge's Line 5 pipeline has drawn criticism from groups
including the National Wildlife Federation and the Sierra Club,
which say a spill would be catastrophic for the ecology of the
Great Lakes.
Enbridge, also based in Calgary, said that the section of the 67
year-old pipeline that runs under the Straits of Mackinac has never
leaked and that it is taking steps to further protect the lakes
after negotiating a plan with former Michigan Gov. Rick Snyder to
encase the pipes in a tunnel.
Michigan Gov. Gretchen Whitmer said in November that she was
revoking a permit allowing the pipeline to run along the bottom of
the Straits of Mackinac, between Lake Michigan and Lake Huron.
Michigan's government said Enbridge had violated public trust and
cited "the unreasonable risk" the pipelines pose to the Great
Lakes. She gave the company until May 12 to shut the pipeline.
A spokesman for Canada's natural resources department said the
government "supports the continued safe operation of Enbridge's
Line 5." Doug Ford, the premier of Ontario, sent a letter to Ms.
Whitmer last month saying that closing the pipeline would threaten
union jobs in Ohio and Michigan. It could also force companies to
transport fuel on trucks, trains and ships, worsening congestion on
busy cross-border routes and increasing greenhouse-gas emissions,
Mr. Ford said.
Enbridge sent a letter to Ms. Whitmer on Jan. 12 saying that
only a court order or the federal Pipeline and Hazardous Materials
Safety Administration carried the authority to shut the pipeline
down. A PHMSA spokesman declined to comment.
Enbridge spokesman Mike Fernandez said the company has filed
suit in the U.S. District Court for the Western District of
Michigan to stop the closure and is lobbying government officials.
Michigan is also suing Enbridge in the same court to affirm its
order. No date has been set for proceedings in either case.
"Enbridge cannot unilaterally decide when laws and binding
agreements apply and when they don't," said Dan Eichinger, director
of Michigan's Department of Natural Resources, in a statement.
Closing the pipeline could lead to the loss of thousands of jobs
at refineries and related companies in Sarnia, said Mike Bradley,
mayor of the town of 75,000. He predicted that its closure would
push up prices for gasoline, home heating oil, and jet fuel
supplied to Toronto's Pearson Airport.
"There will be ripples all the way through," Mr. Bradley
said.
Write to Vipal Monga at vipal.monga@wsj.com
(END) Dow Jones Newswires
January 19, 2021 07:39 ET (12:39 GMT)
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