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.