Welcome Back, Carter

I mentioned in my last post that environmentalist policies have been a major driver of the energy crisis that's currently eating up Europe. We are now beginning to see the same dynamic play out in North America.

West Texas Intermediate crude, America's oil benchmark, is trading at just under $80 per barrel, double what it was a year ago. Average gasoline prices in the U.S. are at their highest point in seven years. After years of having to compete with lean, mean North American resource companies, OPEC is back in the driver's seat and enjoying profits that come at the expense of American and Canadian producers who have been cursed (by their own customers, no less) with environmentalist governments. Justin Trudeau actually got reelected on the promise to continue to increase taxes on heat and energy in a cold country just before the winter. (Not that his opponent even attempted to hold him accountable). Joe Biden was cagier about his actual plans while campaigning, but the pledges were there for those that had ears to hear.

The nations of OPEC, whatever their other problems, have a better instinct for self-preservation than that.

But even with their green bona fides, Biden and Trudeau can't catch a break from Team Gaia. Despite a looming energy crisis, the eco-warriors are refusing to back down in their battle against Enbridge Line 5. The pipeline, which brings petroleum products from Alberta to Ontario by way of Michigan, has been the subject of protests and a simmering legal dispute with Michigan's Governor, Gretchen Whitmer. Here's what I wrote about the stakes in this fight back in May:

Some 540,000 barrels of Canadian oil and natural gas pass through Line 5 every day, between 40 and 50 percent of Ontario and Quebec's total supply.... It has been referred to as the “spinal cord of Ontario’s infrastructure,” and through Ontario, to Quebec and points further east as well. A shutdown would have devastating consequences for consumers in eastern Canada, leading to fuel shortages and price spikes. And then there's the effect on employment -- the government of Ontario estimates that killing Line 5 would cost that province 5,000 jobs directly and indirectly almost 25,000. Whitmer's own constituents would be effected as well -- half of the propane used to heat homes in Michigan passes through Line 5, and a great deal of oil bound for Ohio and Pennsylvania besides. But that's nothing like the effect a shutdown would have on Canada's two largest provinces.

All of that is still true, but this is running a lot hotter than was expected back then because we're seeing "fuel shortages and price spikes" as well as depressed employment numbers while Line 5 is still up and running!

Consequently, the Trudeau government have now invoked the Transit Pipeline Treaty of 1977 in court with the hope of sidestepping the local authorities in Michigan so they can begin negotiating directly with the Biden Administration about the future of Line 5. But who knows if that will improve the situation? After all, the same activists who have Gov. Whitmer's ear also have powerful friends in the White House, and then president hasn't exactly shied away from screwing over our neighbors to the north.

It's become almost a cliché to say the 1970s are back, what with rising crime, stagflation, and especially an energy crisis, while a feckless liberal president blames everyone but himself. But as John Robson has pointed out, what we're going through now is worse in one important respect:

[A]t least in the 1970s it was done by accident, through policies that achieved the opposite of what their architects hoped and expected. This one is deliberate. They said they would get rid of fossil fuels, mocked those who protested that it would cause economic disaster, and now that it is they’re doubling down. They really mean it.

We're getting a glimpse of the future they've been planning. If we don't change course, it's going to get a lot worse.

It Ain't Over 'til the Greens Win

Lawyers specializing in migration from both sides of the barricades have a wry capsule explanation of how the law works: It Ain’t Over 'til the Migrant wins. In this explanation “wins” means “stays.”

There are American laws galore that allow the government to deport people present in the United States illegally. Why don’t they work? Well, there are also laws that enable a competent lawyer to string out his client’s deportation indefinitely until he has a wife, children, a job, a home, and a lawyer here—which almost amounts to a squatter’s right to stay.

It seems downright unreasonable to send him back to where his home used to be—at least that’s the view of the immigration bar, NGOs specializing in migration and refugee policy, media that are overwhelmingly sympathetic to migrants of every kind, all Democrats and some Republicans in Washington, academic “experts” on immigration, and so eventually of the courts trying such cases.

As the late Judge Robert Bork pointed out in his short, brilliant book, Coercing Virtue: The Worldwide Rule of Judges (AEI, 2003), modern judges implement not the law as such but a blend of the law itself and of the opinion of the law held by legal members of the highly educated upper-middle class.

That’s why the opinions of judges matter and why legal verdicts in immigration cases increasingly follow the maxim of “It ain’t over 'til the migrant wins.” And, therefore, stays.

Case closed!

Is that maxim now being transferred to law determining court cases on the environment and climate change?  That question is raised by the proliferation of court challenges to projects to extract and transport fuels, especially fossil fuels, when those projects have survived regulatory challenges from the federal bureaucracy, and even when their cancelations are likely to provoke disputes between the U.S. and other countries.

The most recent case of such judicial intervention took place in Alaska—usually a state hospitable to the oil and natural gas industry (as well it might be)—when a federal judge canceled Willow, a massive energy investment by Conoco-Phillips on Alaska’s North Slope.

Judge Sharon Gleason of the District of Alaska ruled that the environmental impact statement for Willow should have included a ”quantitative estimate of emissions resulting from oil consumption” (or explained why the estimate could not be produced) and provided better protection for wildlife including caribou.

These are interesting proposals, but they are not exactly legal judgments. They are  decisions for the political and regulatory authorities which had considered then and taken a different view to Judge Gleason. Willow had been approved by the Bureau of Land Management, supported by the Biden administration, and backed enthusiastically Alaska’s Governor, Mike Dunleavy, who is responsible to the voters for Alaska’s economic development. He responded sharply to Gleason:

We are giving America over to our enemies piece by piece. The Willow project would power America with 160,000 b/d, provide thousands of family-supporting jobs, and greatly benefit the people of Alaska.

Judge Gleason has no accountability for the economic consequences of her arbitrary judgments. She was exercising irresponsible power—or as the saying goes, legislating from the bench. Alaska voters damaged by her intervention have no way of sanctioning her for it.

Judge Gleason has spoken.

Of course, we should acknowledge that such judicial interventions sometimes favor the corporation against the regulatory bureaucracy or the decisions of lower courts. A recent example of that took place in Louisiana where a court forced the Biden administration to resume selling oil and gas leases to energy company which it had halted “temporarily” while the Interior Department reviewed them.

Higher courts may reverse that judgment on appeal—but that comes with a cost too. As the formidable columnist Mark Steyn has pointed out in the different context of libel law, “the process is the punishment.”

All these infrastructure projects are hugely expensive and take years to complete. If their approval is a constantly changing shuttlecock batted back and forth between the courts, the regulatory bureaucracy, the political world, and the industry, that will raise their costs massively, sometimes cause their cancelation, and hike the price of the final product in energy bills to the electricity consumer—who now include owners of electric cars and other electrical products. They buy such such products in order to switch from dirty fuels to greener power sources at a considerable increase in cost. That cost increase will get larger if infrastructure projects become as risky as roulette. And if you make the cost of switching heavier, fewer people will do it.

All those consequences—and more—were exemplified by President Biden’s cancelation of the nine-billion dollar Keystone Pipeline from Canada to Texas. He did this by executive order immediately upon coming into office after it had survived more than a decade of regulatory and legal challenges from the usual suspects—environmentalists, protesters claiming to represent indigenous interests, progressive billionaires: the Democratic party’s post-industrial urban base.

Par for the course, you may think. But this particular decision was unusual in two respects. In the first placed, it reversed the more common practice by which the courts override the national executive in Washington. On Keystone, Biden overrode the courts—which is usually seen by Democrats as a constitutional mortal sin. "Climate  change," however, is the excuse that sweeps all rational argument aside. Second, it provoked a serious foreign policy crisis with—of all energy-producing countries—Canada! Canadian prime minister Justin Trudeau is Biden’s ideological soulmate on energy, the environment, and much else, but he still had to take his constituents into account.

That international crisis shows no sign of abating—quite the contrary—because Michigan governor Gretchen Whitmer canceled a much more important and more established pipeline between the U.S. and Canada, apparently without really grasping the extraordinary damage she was inflicting on our friendly neighbor to the north. Here's one local report:

While the Keystone project was halted in early construction, Line 5 has transported Canadian oil since 1953. More than half of Ontario’s supply passes through it, according to [the pipeline company] Enbridge. It exits Michigan at the border city of Sarnia, Ontario, and connects with another line that provides two-thirds of crude used in Quebec for gasoline, home heating oil and other products.

I would once have thought that a war with Canada was in the realm of the impossible. But Governor Whitmer may be proving me wrong. She is threatening to confiscate Enbridge’s profits and do many other terrible things if the company continues to defy her. The federal regulator seems not to agree with the governor’s arguments that the pipeline is a hazard to the environment. Enbridge points out that all the alternatives to the pipeline would be more hazardous. The Canadians seem to be united around the defense of their own oil and gas industry since it keeps Ontario and Quebec warm in winter (and Michigan's airports operating). Local Michigan businesses are largely on Enbridge's side too. The Biden administration, which is currently digging down into a lot of holes, must be wondering how on earth it got into this hole and how to get out of it.

Game over, man.

The answer is that, as in Biden’s cancelation of the Keystone pipeline, there are far too many “authorities”—executive, regulatory, state, federal, legal—which believe that their virtuous Green ideologies give them a right to intervene arbitrarily in environmental and energy issues to reach the right outcome. Which one of them prevails is now an almost random matter. For companies contemplating multi-billion dollar projects, both negotiating with regulatory authorities and going to law in these circumstances are a little like shaking a kaleidoscope or consulting an astrological chart.

The main villain in all this is the authority that should and normally would determine fairly which of all the other authorities has the right and obligation to make which decisions on what and on what legal basis. That authority is the courts. Law should offer a reasonable certainty to companies and individuals contemplating major expenses from mortgages to investment in renewables. But it can only play this role well if it reduces to the minimum its own opinionatedness on green issues.

Unfortunately, the courts are no longer impartial umpires interpreting laws passed by Congress and state legislatures. They are moving in the direction of becoming more “green” rather than more judicial as the examples quoted above demonstrate. They have their fingers on the scales of Lady Justice. It threatens both America's prosperity and its democracy if it ain't over till the Greens win. But that's the trend.

PennEast Pipeline Beats New Jersey at SCOTUS

Legal eagles might find today's Supreme Court decision, in PennEast Pipeline Co. v. New Jersey, compelling, contending as it does with a tension between the exercise of eminent domain on the one hand and a state's sovereign immunity as guaranteed by the 11th amendment on the other. For a layman like myself, one smart enough not to have attended law school, the discussion makes my eyes glaze over. However, the case might have some important ramifications in the ongoing dispute between the environmentalist movement and the oil and gas industry in the months and years ahead, and we would do well to be aware of it.

PennEast Pipeline Company LLC, a joint venture of energy producers including Enbridge Inc., South Jersey Industries Inc, and New Jersey Resources Corp, has been constructing a 116-mile pipeline that would transport as much as one billion cubic feet of natural gas per day from Pennsylvania's Marcellus Shale and serve customers in both Pennsylvania and New Jersey.

After having secured the Federal Energy Regulatory Commission's approval, the company began acquiring the land along the pipeline's planned route, making use, where necessary, of a provision in the U.S. Natural Gas Act which allow resource companies to utilize federal eminent domain authority. However, some of that land belonged to the state, and the administration of Governor Phil Murphy, a Democrat, refused to hand it over, contending that only privately owned land can be acquired in this way.

When PennEast took the state to court, the Murphy administration argued that the 11th amendment-guaranteed sovereign immunity protected it from being sued by a private entity. The majority, in an opinion written by Chief Justice Roberts (joined by Justices Breyer, Sotomayor, Alito, and Kavanaugh), disagreed, accepting PennEast's defense that their use of eminent domain flowed directly from the federal government.

Roberts argued that the right of the federal government to use eminent domain for the construction of essential infrastructure was well established, that there was nothing stopping it from delegating that power to a private company, and that "[a]lthough nonconsenting States are generally immune from suit, they surrendered their immunity from the exercise of the federal eminent domain power when they ratified the Constitution."

This doesn't mean that the pipeline will definitely be completed. As Greg Stohr points out in Bloomberg, PennEast "still must secure state-level permits, something that may prove difficult in [liberal] New Jersey." But this case is still has the potential to be significant, limiting as it does the ability of left-wing activists to kill major infrastructure projects they couldn't stop at the federal level simply by pumping money into local politics.

Will this precedent affect, for instance, Enbridge's other big pipeline project, which has seen Michigan holding all of eastern Canada hostage just to make a point? It's a hopeful sign.

The Colonial Pipeline Experiment

Here's some good news -- after several days offline, due to a ransomware attack by Russian hackers, Colonial Pipeline is back up and running as of Wednesday evening. And sooner then expected -- the initial estimates suggested that it might not be able to be restarted until this weekend. This has led to some questions about whether Colonial (perhaps with some encouragement from the Feds) simply paid the hackers' ransom demand. CNN says no, they just beat the hackers with an assist from the FBI, but Bloomberg is reporting that that's exactly what they did:

Colonial Pipeline Co. paid nearly $5 million to Eastern European hackers on Friday... The company paid the hefty ransom in untraceable cryptocurrency within hours after the attack, underscoring the immense pressure faced by the Georgia-based operator to get gasoline and jet fuel flowing again to major cities along the Eastern Seaboard, those people said. A third person familiar with the situation said U.S. government officials are aware that Colonial made the payment.

Either way, this is an embarrassment for the Biden Administration, but allowing (maybe encouraging) an American company to pay a ransom to Russian cyber terrorists would be hard to come back from. Still, Joe must not have liked the prospect of gas lines -- that totem of Carter-era malaise and harbinger of the Reagan revolution -- lasting more than a few days.

Even so, this crisis won't be ending immediately. Colonial has said, "it will take several days for the product delivery supply chain to return to normal," meaning that souring prices, panic buying, and even rationing are probably going to be with us in the affected states for at least a week.

On the bright side, this is about as close as we can get to a controlled experiment. It would be wildly irresponsible to shut down a pipeline just to spite our obnoxious anti-pipeline protestors and the limousine liberals who fund them. But to see those same liberals sitting in their limousines (or SUVs more likely) in northern Virginia waiting their turn to fill their tanks (and maybe a few plastic bags) with gas? Priceless. Here's hoping the Canadians are watching how this is playing out.

Perhaps the headache will even cause Biden to rethink a few of his own green commitments. As Kyle Smith reminds us,

If Biden himself were not on record as being himself a fan of shutting down fuel pipelines — Keystone XL not only was a menace to our American way of life by bringing us energy, Biden thought it had to be cut off before his first afternoon nap — this brewing crisis wouldn’t be so potentially damaging to him. Biden is an ardently pro-fuel-limits guy in a moment when fuel is limited. As one of his other first acts in office — “Let’s own Trump by endangering our energy future” — he also banned new fracking leases on federal land. Maybe it would be nice to have more energy supply rather than less given what’s happened since?

Don't hold your breath.

Gretchen Whitmer in the Enbridge Pipeline Wonderland

The drama surrounding Enbridge Inc.'s Line 5 is getting tense. Michigan's governor, Gretchen Whitmer, has ordered the Calgary-based energy company to cease operating the pipeline by May 12th. Enbridge has vowed to defy that order, which it insists Whitmer has no authority to issue, and await a legal judgement. Whitmer's office has declared that "Enbridge’s continued operation of the Line 5 pipelines in the Straits of Mackinac [after May 12th] would be unlawful." Enbridge executive vice-president Vern Yu shot back, “We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely."

Tempers are clearly running hot, and they have been for months. Back in November, Whitmer fulfilled a campaign promise by revoking the easement -- first granted in 1953 -- which has allowed Enbridge to operate a pipeline along the bottom of the Straits of Mackinac en route to refineries in Sarnia, Ont., arguing that any rupture in the line could devastate the ecosystems of two Great Lakes -- Lakes Michigan and Huron.

Line 5 has never had a significant leak in its nearly seventy-year history, but even so Enbridge had already proposed a solution to this potential problem -- a replacement pipeline to be laid beneath the riverbed and encased in concrete, with the object of safeguarding the straits. This was too little, too late for Whitmer and her fellow environmentalists, who pointed out that the proposed project would take years to complete.

Take that, Canada!

Some of that time, of course, is due to agencies in Whitmer's own administration dragging its feet about issuing permits and cheerfully adding extra regulatory hurdles. Most recently, the Michigan Public Service Commission, all of whose members are Whitmer appointees, decided that it was legitimate for them to take into account the environmental impact of the petroleum products the pipeline is transporting when deciding on the environmental impact of a new pipeline.

I'll say that again -- the commission is going to factor the future CO2 emissions of the oil and gas which pass through Line 5 into their decision about whether the pipeline itself poses a threat to the Great Lakes. Utterly insane, bringing to mind a certain tea party from the pen of Lewis Carroll:

Mad Hatter: Would you like a little more tea?
Alice: Well, I haven't had any yet, so I can't very well take more.
March Hare: Ah, you mean you can't very well take less.
Mad Hatter: Yes. You can always take more than nothing.”

Quite a lot is at stake in this dispute. Some 540,000 barrels of Canadian oil and natural gas pass through Line 5 every day, between 40 and 50 percent of Ontario and Quebec's total supply, including all of the jet fuel used at Toronto’s Pearson International Airport. It has been referred to as the “spinal cord of Ontario’s infrastructure,” and through Ontario, to Quebec and points further east as well. A shutdown would have devastating consequences for consumers in eastern Canada, leading to fuel shortages and price spikes. And then there's the effect on employment -- the government of Ontario estimates that killing Line 5 would cost that province 5,000 jobs directly and indirectly almost 25,000.

Whitmer's own constituents would be effected as well -- half of the propane used to heat homes in Michigan passes through Line 5, and a great deal of oil bound for Ohio and Pennsylvania besides. But that's nothing like the effect a shutdown would have on Canada's two largest provinces.

And that makes this a tricky situation for Canada's famed green prime minister, Justin Trudeau. As Rex Murphy has pointed out, for the Canadian left, environmentalism was always supposed to be an anti-Alberta project. Though cloaked in high-flung rhetoric about saving the planet, in Canada the Green Movement has often been a cat's paw of the left-of-center parties for preventing the conservatively inclined western provinces from capitalizing on their natural resources and enhancing their economic might. But, notes Murphy:

Line 5, is not a pipeline OUT of export-blockaded Alberta, heading to the U.S. and hoping for a better market. Line 5 is a pipeline INTO Ontario, and — as Robert Frost was good enough to supply the phrase — that “has made all the difference.”

The 2019 election definitively demonstrated that the Trudeau Liberals can remain in power with essentially zero support out west, but only if they pull big numbers in Ontario, Quebec, and the Maritimes. If, however, voters in those provinces, whose fuel bills have already swelled thanks to Trudeau's carbon taxes, suddenly see their gas prices jump by, say, 30 percent, coupled with related job losses in the tens of thousands, enough of them are going to flip to one of the other parties to boot Justin from power, no matter how hard the CPC appear to be trying to lose.

2019 election by province (Wikicommons)

Consequently, the Trudeau government is desperate for the Line 5 dispute to be resolved in their favor. According to Reuters:

Ottawa’s strategy... is to repeatedly raise the issue of Enbridge Inc.’s Line 5 with numerous U.S. counterparts — including Biden — to get them to pressure Michigan’s Democratic Governor Gretchen Whitmer to keep the pipeline open.

Trudeau has apparently spoken to Biden directly about Line 5 more than once, but with no public response from the president as of yet. And Whitmer's side seem disinclined to back down -- Whitmer ally Liz Kirkwood recently remarked that “[t]he Canadians are awfully silent about our shared responsibility to protect the Great Lakes." Consequently, the Canadian government has begun flirting with more drastic measures, including invoking the (never-before-used) 1977 Transit Pipelines Treaty, which states:

No public authority in the territory of either party shall institute any measures… which are intended to, or which would have the effect of, impeding, diverting, redirecting or interfering with in any way the transmission of hydrocarbon in transit.

Suffice it to say, this is far more than they ever did for Keystone XL. And, of course, that makes this a mess of their own making, at least in part. As I wrote at the time, there was "no obvious limiting principle" to the rationale for killing Keystone, and now the same vacuous arguments are being deployed against Line 5. Had Trudeau been willing to actually defend Canadian interests then, it's unlikely that he would have this problem now. Instead, he played politics while accepting a pat on the head from the global environmentalist crowd.

Well now he's on the receiving end while Gretchen Whitmer does the same thing. Trudeau deserves everything he gets. And it's tempting to say the same for the people of Ontario and Quebec. After all, they voted for him.

Gaia's Minions Won't Stop with Keystone

One theory as to why Team Biden killed the Keystone XL pipeline on Day One of his presidency is that the project had garnered so much notoriety. Keystone, the reasoning goes, had become a cause célèbre for the environmentalist left, and the Biden administration had to throw them a bone by terminating it, but that doing so doesn't give us a window into how he will actually govern over the next four years. No doubt this is what leaders of the various unions who endorsed Biden are currently telling themselves.

There is an obvious flaw in this reasoning. If Biden is willing to quash a major pipeline project like Keystone (midway through construction and at the cost of damaging America's relation with our ally, Canada) simply because environmentalists have succeeded in making the pipeline infamous, what's to stop them from making other pipeline projects similarly well known and with the same object in mind?

Well, it seems as if that is exactly what they're doing. Last week, we discussed a victory for Enbridge Line 5, which moves 540,000 barrels of Canadian petroleum products per day from Wisconsin. to Sarnia, Ont. Gretchen Whitmer has declared war on Line 5, and is both trying to halt its operation, on the grounds that it is a danger to the Straits of Mackinac, and trying to stop the construction on a tunnel under those straits whose object is to make its operation safer. Michigan's department of energy has, nevertheless, granted a construction permit to build the tunnel.

Gov. Whitmer's war goes on, however, and the possibility that she'll succeed has started to make Canadians nervous. Trudeau's minister of natural resources, Seamus O'Regan (a committed environmentalist), and Ontario's Conservative Premier Doug Ford have both put out statements in support of Line 5. Conservative leader Erin O'Toole recently wrote an op-ed defending it. Why would a Liberal Minister set out to defend a pipeline alongside Conservative politicians? Because, beyond the jobs it supports, Line 5 supplies about half of the petroleum needs of Ontario and Quebec! Losing it would be a disaster for Canada, and even Trudeaupian Liberals know it.

The honorably lady "from" Minnesota.

And now another front in this war has developed. Ilhan Omar, the hard-left congressional representative from Minnesota, has appealed directly to Joe Biden to kill Enbridge Line 3, which transports those same petroleum products from Alberta to Wisconsin, crossing through the congresswoman's home state. In an open letter (of course), Omar said "I joined millions of Americans celebrating your announcement to withdraw permits for the Keystone XL pipeline." She asks Biden to do the same to Line 3, currently in the process of being replaced with a larger pipe. She continues, "Under even the best-case scenarios for climate change, we cannot afford to build more fossil fuel infrastructure.”

If Team Biden really is operating under the assumption that killing Keystone has bought them some environmentalist good will, and that they don't have to sacrifice any more pipelines or jobs on the alter of Mother Gaia, they're in for a rude awakening. Mother Gaia's minions are insatiable. And their chief weapon is publicity.

Enbridge Line 5 Lives! (For Now)

Some unexpected good news: Michigan's Department of Environment, Great Lakes and Energy has approved construction of an underground tunnel to house a replacement for Enbridge Line 5 which transports roughly 540,000 barrels of petroleum products per day from Superior, Wis., to refineries in Sarnia, Ont.

This is surprising because the general expectation was that Joe Biden's decision to kill the Keystone XL pipeline extension is just an opening salvo in the new administration's war on energy. After all, there is no obvious limiting principle to Biden's rationale for killing Keystone. The pipeline had failed no environmental review, and TC Energy, which owns the pipeline, has satisfactorily responded to every legitimate concern of governments and environmentalist groups on both sides of the border.

What Keystone XL would do is facilitate the safe transport of fossil fuels, and that is what made it a target. This was clearly articulated in Biden's executive order, which offered no justification for revoking Keystone's construction permit beyond the necessity to "prioritize the development of a clean energy economy." If that's the governing logic, no pipelines are safe.

Enbridge Line 5 seemed the next theater of conflict because, as Joan Sammon discussed in a recent piece, there's already an ongoing crusade against it, spearheaded by Michigan governor Gretchen Whitmer. Here's the background, as described by Sammon:

Whitmer, a Democrat, took legal action against Canadian pipeline operator, Enbridge, revoking a 67-year old-easement to extend an approximately four mile underwater section of the pipeline that runs through the Straits of Mackinac.

Whitmer's argument is that the section of pipeline which runs underwater between Michigan and Ontario would endanger the Great Lakes should it leak, and thus she must act. The pipeline, which has been in operation since 1953, has never had a significant leak; indeed, Enbridge had already preemptively addressed this problem, planning a new section of pipe to be laid beneath the riverbed with the object of safeguarding the straits.

Construction approval has been slow, in part because of the change in administration in Michigan -- initial approval for the project had been granted by former governor Rick Snyder, a Republican. But following the 2018 election subsequent permits have to be granted by Whitmer appointees.

The Canadian position regarding Line 5 is that a shutdown would be disastrous. According to the National Post,

[It] would cut off nearly half of the crude oil it needs to make petroleum products such as gasoline. All of the jet fuel used at Toronto’s Pearson International Airport is made in Sarnia, and distributed through Line 5. It also carries propane used to heat homes in northern Michigan and Ontario, and supports thousands of jobs on both sides of the border.

Enbridge has refused to comply with Whitmer's order, arguing that the governor has no jurisdiction to shutdown a pipeline approved by the federal government.

The approval of Michigan's energy department -- which determined "the project would have 'minimal impact' on water quality and wetlands" -- is significant, but Line 5 isn't in the clear yet. The project still requires the approval of the Army Corps of Engineers, and the Michigan Public Service Commission, whose members have all been appointed by Whitmer, must grant approval for the pipeline to actually be put into the new tunnel.

Still, in the current hostile environment Enbridge will take any good news it can get.

In Michigan, the Left's New Attack on Pipelines

In a surprise maneuver on November 13, Michigan governor Gretchen Whitmer, a Democrat, took legal action against Canadian pipeline operator, Enbridge, revoking a 67-year old-easement to extend an approximately four mile underwater section of the pipeline that runs through the Straits of Mackinac. The revocation takes effect in May 2021, at which time Enbridge would be expected to cease operating the line. Line 5 is part of Enbridge's Lakehead network of pipelines.

The effect of closing Line 5 will be to shut the entire pipeline, which runs between Superior, Wisconsin and Sarnia, Ontario and carries about 23 million gallons of oil and natural gas liquids system-wide, daily. Line 5 moves about 540,000 barrels daily.

Curiously, Whitmer appears to be about two years late to the party. In 2018 Enbridge reached an agreement with then-Governor Rick Snyder to replace the underwater segment with a new pipe. It will be housed in a tunnel that is to be drilled through bedrock beneath the Straits of Mackinac. The company is seeking state and federal permits for the project, a process that is notoriously arduous and slow, but is ongoing. In this case these regulatory requirements are slowing the process that will mitigate the concern the state alleges in their order. Did you follow that?

What a good idea.

In short, Governor Whitmer is playing games -- asserting solutions to problems that do not exist and using taxpayer money to do it. She is two years too late and five paces out of step. Enbridge cannot begin drilling the replacement tunnel until the requisite permits and regulatory review is complete, a process that is currently underway on a timeline over which Enbridge has no specific control.

Through an understanding of supply and demand curves and the cost of inputs, the economic implications of shutting this pipeline are predictable. The price of propane and other products transported through this network will increase. This is plainly detrimental for the citizens of Michigan and the broader market. Pipelines are after all the safest and fastest way to move oil and gas from the field to refineries. Whitmer wants inexpensive fossil fuel for her state on one hand, while nixing the very transportation system that affords Michigan’s residents this inexpensive fuel supply.

While impeding construction of pipelines is not unto itself an unfamiliar tactic for the ‘green new deal’ lobby, there is something new at work here. This shot across the Enbridge bow should not be disregarded by other pipeline operators, nor the broader oil and gas industry because it portends challenges to the oil and gas industry without a decisive response.

Pipeline operations typically fall under federal jurisdiction. Governor Whitmer, however, is acting under the state’s public trust doctrine, which in this case requires state authorities to ‘protect' the Great Lakes. The implication is that pipelines are intrinsically unsafe. But this is not true. This obviously sets the stage for Enbridge’s legal challenge.

The pipeline has been in operation since the early 1950s. Until now, older pipelines had not been thought to be targets of the efforts of green zealots. While it is not clear that Whitmer’s legal strategy could easily be applied to other pipelines, it is clear that the hunt is on. Under a potential Biden administration there is no doubt that federal agencies will be willing participants in this legal strategy.

And it always looks much like this.

This tactic was used in Washington state to try to have hydro-electric dams along the Snake River removed. In that case green zealots attempted to use the plight of Salmon, Steelhead and Orca whales as the pretense to dismantle the dams that provide clean, inexpensive electricity to those in the west. That effort was only recently rebuffed after years in court. The green zealots in that case hailed from the Center for Biological Diversity

Now, four months after that decision based on a review by the U.S. Army Corps of Engineers, a senior attorney with the same Center for Biological Diversity, Jared Margolis, explains the strategy around Line 5 and similar pipelines to the New York Times:

I think, at some point, we do need to turn to pipelines that are in the ground that are dangerous, that are posing a serious risk.

And so the games begin. Enbridge and other pipeline owners need to develop their own narrative in the face of this new strategic assault on their industry sector. While this battle may be in Michigan, the larger war is being waged against the entire fossil fuel industry. The industry is an essential element of American energy independence and essential for market access for Canadian product.