ALPENA – Attendees from all political backgrounds, careers and municipalities convened at the Alpena County Library on Jan. 10. They left their differences at the door to discuss an issue on which they all share a passionate common ground – Enbridge Line 5.
Organized by Jim Mortimer, Hale, the event featured presentations by Peter Manning – Michigan Assistant Attorney General and Chief of the Environment, Natural Resources and Agriculture Division – as well as Roger Gauthier, Straits of Mackinac Alliance founder.
The talks centered on a number of topics related to Line 5, which runs 645 miles from Superior, Wis., to Sarnia, Ontario, crossing more than 100 tributaries and 400 water bodies in Michigan – including the AuSable River.
As reported, the 30-inch oil and natural gas pipeline splits into two, 20-inch diameter pipes under the Straits of Mackinac, between Lake Huron and Lake Michigan, for 4.1 miles. Operated by Enbridge Energy Limited Partnership, the 66-year-old line has been in operation since 1953 and was designed to last 50 years.
The meeting ran about 2½ hours, and discussions were had on the litigation pertaining to Line 5, as well as the risks of an oil spill in the Straits, with Manning noting that an anchor strike is of utmost concern.
Of the approximately 50 people in attendance, there were such representatives as commissioners from Iosco, Presque Isle, Alpena and Cheboygan counties, including Iosco County Commissioner Terry Dutcher; representatives for both State Sen. Jim Stamas and State Rep. Sue Allor; and leaders from various county Democratic and Republican party groups.
“You know, if you’re from the 106th District, if you’re from northeast Michigan, it really does not matter what side of the aisle you fall on,” said Jesse Osmer, legislative director for Allor. “As you see, we have Democrats and Republicans here. It’s really something I think that really hits home when we realize the entire coastline of the 106th district would be affected if something were to happen with Line 5.”
Mortimer – a member of the Iosco County Democratic Party – shared that, in conversations between party members and county commissioners along the Huron shore, they find that Enbridge’s plan to build a tunnel around the pipeline under the Straits raises serious questions.
“We are learning that this Canadian company, based in Alberta, has a history of major breaks and spills on Line 5 and other pipelines they own in the US and Canada,” according to Mortimer. “We need the facts on this situation to understand how best to work with the Office of the Governor and the Attorney General to protect the safety and livelihood of people and organizations in our counties for the future.”
He said the goal is to foster a collaboration among Republicans, Democrats, county commissioners, members of the public and others, in order to work together in support of protecting the state’s resources.
Robert Kennedy, 106th District County Democratic Parties Chair, served as moderator.
He first introduced Gauthier, whose background includes work with the National Oceanic and Atmospheric Administration, as well as the Great Lakes Commission, in addition to serving for 30 years as chief of the office of hydraulics and hydrology for the Army Corps of Engineers in Detroit.
Also having formed the nonprofit Straits of Mackinac Alliance, Gauthier and his colleagues have been trying for five years to get more attention focused on Line 5 and, “remove the threat from our waters.”
He said the pipeline and the movement of petroleum products through the upper Great Lakes is a very serious issue which impacts everyone. “We’ve been attempting to make this nonpartisan from day one. And I can’t reiterate that strong enough, that we’re all in the same boat together.”
Gauthier explained that Enbridge Line 5 is one segment in an extensive network supplying crude oil and petroleum products to Midwest refineries, which include Detroit; Michigan City, Ind.; Toledo, Ohio; and Sarnia, Ontario. The commodity originates from oil fields in two Canadian provinces, the U.S. states of Montana, North Dakota and South Dakota, and from shipments of oil products from the Gulf of Mexico.
“It can transport up to 540,000 barrels of petroleum products per day, or about 23 million gallons,” according to Gauthier.
He said it’s been estimated that 95 percent of the commodity which goes into Line 5 in Superior, ends up being unloaded in Sarnia for refinement for Canadian domestic consumption and for export. “20 percent of the time that line carries natural gas liquids that are highly explosive – propane, methane, several other products of that ilk.”
He noted that a worst-case spill in the Straits has been estimated to release 2.1 million gallons. This is about twice the size of the oil spill that occurred in 2010 in the Kalamazoo River, when Enbridge’s Line 6B (now known as Line 78) ruptured – making for the largest inland oil spill in U.S. history.
Releasing an estimated one million gallons of tar sands oil, Gauthier said the cleanup continued for at least five years. “And not all legal actions in that case have been resolved yet.”
Since then, and following the release of the National Wildlife Federation’s (NWF) sunken hazard report of Line 5, Gauthier said the state of Michigan convened a task force to recommend actions to protect its citizenry from damages from other similar pipeline ruptures in the state.
There were 13 recommendations released, with Gauthier saying one of the most important items, in his book, was that the state needed to conduct an independent risk analysis to evaluate whether there were adequate financial assurances to cover losses of individuals and entities in the Great Lakes.
He said another notable recommendation was to determine if there are any viable alternatives to the pipeline being moved.
Gauthier says both reports were received by the state, but there is no consensus on some of their findings. Especially, there is considerable debate about whether the amount of damage that could occur from a pipeline rupture could be limited to $1.8 billion.
“Meanwhile, while that process was going on, Governor Snyder was negotiating with Enbridge and signed three separate agreements between Enbridge and the state,” he continued, highlighting some of the items in the agreements that are of significant merit.
One, he noted, is that Enbridge could self-insure up $1.8 billion to cover any losses, and that there was no third-party requirement to get a bond or any other coverage.
The second is that Enbridge could investigate the feasibility of building a tunnel under the Straits.
The third point is that Enbridge could continue to operate the line while the tunnel design construction was underway and, finally, that Enbridge could walk away from the tunnel option for any reason, at any time.
Gauthier said it was at the end of 2018 when legislation was passed authorizing the tunnel construction. In 2019, though, Michigan Attorney General (AG) Dana Nessel released an opinion that this legislation was unconstitutional.
He then summarized seven pieces of Line 5-related litigation that are underway.
One he shared is the state of Michigan lawsuit pertaining to the 1953 Line 5 easement, which he said was an action the AG initiated to revoke the easement and shut down the line entirely.
Two federal lawsuits have also been brought by the NWF, which teamed with the Environmental Law Center on one of the suits. In each case, it is being argued that the approved spill response plans are inadequate.
The Straits of Mackinac Alliance, City of Mackinac Island and Grand Traverse Band of Ottawa Indians are also involved in Line 5 litigation, with Gauthier saying these groups are contesting the engineering integrity of the line, based on the anchor support permit approvals from the Michigan Department of Environment, Great Lakes and Energy (EGLE).
The Bad River Band of Chippewa Indians Tribe lawsuit, he went on, involves expiration of an easement agreement. Gauthier said this group has tried to get Enbridge to leave their land for six years since the company’s easement came up, and that they told Enbridge to leave or they would threaten the company in federal court to shut it down.
Following his presentation, Kennedy introduced Manning, whose division represents EGLE, the Department of Natural Resources (DNR) and the Department of Agriculture and Rural Development. Kennedy said Manning is also the department’s emergency management coordinator. “He has practiced environment and natural resources law with the attorney general’s office for 25 years.”
Manning’s presentation covered both the benefits and risks that various individuals and entities have shared regarding Line 5.
One of the primary concerns when it comes to the risks is an anchor strike, he said, with one such event having occurred on April 1, 2018.
According to the National Transportation Safety Board, the tug and barge Clyde S VanEnkevort/Erie Trader was westbound in the Straits when its starboard anchor, which had unknowingly released and was dragging on the bottom, struck and damaged three underwater electrical transmission cables and two oil pipelines.
Manning pointed out that, in addition to the pipeline, there is other infrastructure in the Straits, such as power cables and telephone cables.
He said that the company operating the ship that hit the line resolved the issue very quickly with the state. “They acknowledged that they were at fault, it was clearly a crew error that occurred, but it was an accident.”
He told the audience that, at some point, the anchor went down east of the Straits and was dragged all the way to Chicago.
Manning showed a photo of several dents on Line 5 where the anchor made contact. “I think, fortunately, it hit a spot where the pipeline was on a bed,” he said.
When the state had a risk analysis done by Dynamic Risk, it was reported that the most likely threat of a rupture for Line 5 is an anchor strike, he continued.
“So Enbridge is talking about taking these various measures, which are good, to make sure that people realize that you shouldn’t be dropping an anchor in the Straits of Mackinac. That doesn’t help if you have an accident,” Manning pointed out. “This company wasn’t trying to anchor. The anchor came loose and it dragged.”
As for the cost following a possible Line 5 rupture, he said there are quite a few estimates that have been put out, with one worst-case scenario figure being $1.878 billion.
For comparison, Enbridge conducted the cleanup after the Kalamazoo River spill, and Manning said they are at $2 billion right now, with more work still to go. “And a river, as you can imagine, is a much more contained environment than in the Straits.”
He described the Straits as a washing machine, saying the winds are strong, the waves are strong and one can never tell where the currents are going to go.
Manning said that even if an oil spill didn’t reach all the way down the shore of Lake Huron, this is something that should be important to everyone, as it would have an impact on the entire state.
In reference to the 1953 easement, Manning said that this does require Enbridge to have insurance. “So Enbridge both agreed to fully indemnify not only the state, but all public and private damages from a spill, and they were required to have insurance.”
He said the company does have some coverage but it’s not clear whether Enbridge has always had insurance in place, and nobody has really drilled down into what the existing policy covers.
Manning said the state brought in a company with expertise in insurance, which looked at Enbridge’s pipeline, and there were a couple things that happened.
“One, they didn’t need to look. I mean, it’s quite clear that the entity that signed that agreement that runs the pipeline is not the parent company. So it’s not Enbridge, Inc. from Canada that is the large mothership of Enbridge; it’s a subsidiary,” he said.
“And so Enbridge – and Enbridge admitted to us that they are not legally Enbridge Inc. – the Canadian company’s not legally obligated to cover the cost of its subsidiary, which is Enbridge Energy Partners that runs the Line 5,” he continued. “It’s also not clear to us that Enbridge, the subsidiary, has adequate resources to cover $1.878 billion in case there is a spill.”
In terms of the Line 5 benefits, he pointed out that the structure does carry a useful product. About 80 percent of what goes through the line is light crude. The other 20 percent are natural gas liquids.
A facility in the Upper Peninsula is where the propane is processed and delivered, Manning went on. “So it’s important,” he said, adding that some have reported that 65 percent of the propane use in the U.P. comes through Line 5 and is utilized at about 14,000 homes. Line 5 gathers some oil in the northern lower part of the state, as well.
There is also a spur pipeline which comes off of the line and takes crude to the Marathon refinery in Detroit, and to the refinery in Toledo. “So that’s 40,000 barrels per day, which is not insignificant,” he noted.
According to Manning, roughly 95 percent of the product carried on Line 5 has nothing to do with Michigan or even the U.S. It’s a Canadian product that’s carried through Michigan and goes to Sarnia.
As for the U.P. propane, he said that when looking at the big picture it’s only 1.7 percent of the natural gas liquids that are carried on that line.
Based on studies performed by Dynamic Risk and London Economics, Manning said they came to the same conclusion that there are alternate ways to get propane distributed in the U.P.
“You don’t have to have Line 5. It is going to increase the cost and, obviously for people that have to use propane, that’s important and it needs to be taken into consideration,” he said. “But the point is, it’s not absolutely necessary that we have Line 5 in order to have propane in the U.P.”
As for the Detroit and Toledo refineries, Manning said, “Dynamic Risk, again, looked at the effect on the gasoline market and they came to the determination that, if you didn’t have Line 5, and those two refineries had to get their crude from a different place, you would have a one- to two-percent potentially impact on gas prices.”
He moved on to the tunnel debate from here, saying that in 2018 there was an effort to create a legal structure for Enbridge to build the tunnel. The statute created the Straits Corridor Authority, allowing for agreements to be entered into with the company for this.
He said Enbridge claims the tunnel will be a $500 million investment in Michigan and create jobs, but a large chunk of this would be spent on the tunnel boring machine – which would be designed and manufactured outside of the state. “And there’s no commitment, as far as I know, that the actual pipe that will be constructed will be built in Michigan.”
Manning acknowledged that jobs will be created if this project goes through, which is good, but that Enbridge has announced these will be temporary jobs.
The DNR, which owns most state property, holds the 1953 easement for Line 5. Enbridge had to get an easement from the conservation commission – the DNR’s predecessor – to construct the pipeline. “And that, really, is why the state has skin in this game,” Manning said. “The building of pipelines, the construction of pipelines, the operation of pipelines – that’s federal law.”
He said the Straits of Mackinac bottomlands are property that the state owns in trust for all of the citizens. The DNR is looking at the issue and trying to document Enbridge’s compliance or not with the easement.
Another item outlined in the easement is that the pipeline has to be supported every 75 feet, but Manning said there have been gaps for quite a while that are bigger than 75 feet. “The easement has a requirement that Enbridge inform the state that it is not in compliance, and it’s pretty clear they didn’t do that in a timely fashion.”
He added that Enbridge damaged the outer coating of the pipe when they put some of the supports on, and then failed to disclose that until much later.
Another noncompliance item he noted occurred recently, while Enbridge was doing some work in preparation for the tunnel.
“They’ve been boring down to look at the geology of the bottomlands. And they had a huge piece of drilling equipment – 45 or 50 feet – that broke off; didn’t bother to tell us for a couple weeks,” he claims.
“It moved 150 to 200 feet on the bottom,” Gauthier also remarked of the equipment, noting that it was recovered because the weather had been mild at that time. “That tells me, hydrodynamically, that that bottom current is really significant, and it’s moving objects that are close to a ton in weight under relatively mild conditions in the Straits.”
Kennedy also spoke on the tunnel, pointing out that this only accounts for the section in the Straits, and not the remaining 640 miles of pipeline. He said that, regardless of a tunnel being built, the pipeline itself has already exceeded its expected useful life.
In other litigation, Manning said that as soon as Governor Gretchen Whitmer came on board, she handed the AG a request for an opinion on the constitutionality of the statute which created a Straits Corridor Authority and authorized agreements with Enbridge allowing construction of a tunnel under the Straits.
He said it was the AG’s opinion that this was a violation of the Title-Object Clause of the Michigan Constitution.
The opinion was issued in March 2019, after which Enbridge filed a lawsuit in June in the Michigan Court of Claims, challenging the opinion and seeking a declaration that it was invalid.
Judge Mike Kelly, that October, ruled in favor of Enbridge that it did not violate the Title-Object Clause, and was constitutional.
“We saw the stay in the Court of Claims,” Manning went on.
He said the government now needs to respond to Enbridge’s request, the Straits Corridor Authority is reconstituted. “We saw the stay in the Court of Claims which is basically just a, ‘don’t make your opinion effective request.’ That was denied.”
He said a stay has also been sought in the Court of Appeals, regarding Kelly’s decision.
Since the meeting, the Court denied Nessel’s request to stay a lower court opinion which overruled her objections to the tunnel construction agreement. Without the stay, the agreement remains in effect.
Nessel on Thursday filed a brief with the Michigan Court of Appeals challenging the court’s decision.
Manning said another piece of unrelated litigation is Nessel v Enbridge Energy, the AG’s lawsuit against Enbridge alleging that Line 5 constitutes a public nuisance, violates the Public Trust Doctrine and violates the Michigan Environmental Protection Act.
As for the Public Trust Doctrine, Manning said the idea is that the state owns it, but it’s like a basic trust and they’re holding it for residents. “So everybody in the state is the beneficiary of the trust.”
He referred to this as a fluid doctrine, saying that something which happened before, can be undone. “And the government can’t just give the people’s property away forever, without any limits.”
Manning said the first argument is that, in 1953, the required findings weren’t made. “So, basically, that easement was void from the beginning.” The second argument is that – even if the findings were made – in current times, that transfer of state property and permission for Enbridge to use the bottomlands is no longer consistent with the public trust.
“Enbridge has brought a motion to dismiss our complaint, alleging that we can’t even plead facts that support our claims. I think and hope that we are doing that,” Manning went on. “We have also filed a motion for summary disposition on the one Public Trust Doctrine count that the conservation commission of government didn’t make the proper findings in 1953.”
A conference with the judge has been scheduled for Jan. 31.
Manning, at the conclusion of his presentation, listed the following website as a helpful resource for those wanting to learn more about the issue: https://mipetroleumpipelines.com/.
He also suggested checking out information from the U.P. Energy Task Force, which can be accessed through the EGLE website via the link: https://www.michigan.gov/egle/0,9429,7-135-3306_88771_93973---,00.html.
The audience was then invited to share their reactions to the presentations, ask questions or offer comments. Among those to give their thoughts was Cheboygan County Republican Party Vice Chair Chuck Leady.
“With respect to the issues at hand here, everybody’s talking about the Straits of Mackinac, which is very, very important. But I think what has not been as well recognized, is that pipeline goes down the inland waterway and under the Indian River,” he said.
He noted that this large pipeline has a lot of oil and, while it would be a tremendous disaster for the Straits of Mackinac to be flooded with oil, a spill in the inland waterway would be equally disastrous to the whole Cheboygan area. “That’s a big deal. It would be as bad, or worse, than the Kalamazoo.”
In reference to the propane in the U.P., Leady said most people who are using propane to heat their homes would rather use natural gas because it’s much cheaper.
He shared that what he would like to see the state look into – if there is no Line 5 for crude and propane – is the possibility of putting a natural gas pipeline in, all across the U.P.
“They would save a horrendous amount of money and, at the same time that you put that natural gas pipeline in, also since they are lacking Internet conductivity, put in fiber optics while you’re digging a hole there and flood the U.P. with Internet, natural gas, better everything; save a bunch of money,” Leady said, being met with applause from the audience.
“The crossing at the Indian River is probably a bigger worry to me than the Straits crossing,” agreed Gauthier.
He noted that there could be more oil in the line between Mackinaw City and the river – which spans more than 30 miles – versus four miles under the line in the Straits.
According to Gauthier, the line has already been replaced immediately upstream of the Indian River, with a 700- to 800-foot section having been rerouted because of a past collapse.
“The problem with the Straits crossing was they had inaccurate amount of data to allow the engineers to know the bottom currents. It was designed to lay on the bottom. The down cutting, the erosion is all a consequence of the fact that they didn’t know the current dynamics at the bottom of the Straits,” he continued.
He said a problem now exists where half of Line 5 is supported by anchor supports in an unstable bottom, and it’s likely more susceptible to failure because of those supports.
As for Leady’s comments on natural gas idea in the U.P., Manning said that bringing in a natural gas pipe and then all of the connecting pipes would be an expensive proposition. But he believes that one of the items the U.P. Energy Task Force is supposed to be exploring is, in fact, whether natural gas a feasible alternative.
“Don’t walk away thinking the entire U.P. gets its propane from Line 5,” Gauthier stressed to the crowd. “The western part of the U.P. gets it by truck from Wisconsin, the eastern U.P. gets it by rail car that comes across the railroad bridge in the Soo to Kincheloe.”
As for the figure of 65 percent of the propane use in the U.P. coming through Line 5, he said this number has never been validated by independent analysis. “And that’s a big problem we all have. We’re all dealing with information provided by Enbridge.”
Further insight into both the anchor supports of Line 5 and the financial elements was given by Leonard Page, a retired attorney and vice chair of the Straits of Mackinac Alliance.
“The current financial assurance mechanism is capped at $1.8 billion. And it is backed by corporate equity. In the event of a major spill, the two U.S. subsidiaries go bankrupt. There goes the corporate equity pledge backing up that financial assurance mechanism,” he said.
“If you have a financial assurance mechanism that the shore owners or the businesses cannot recover their damages, what does that do to northern Michigan? Absolutely devastating,” he went on.
Page said that this changed in Snyder’s second agreement, when it went from a third-party bond or insurance adequate to pay all damages, to the financial assurance mechanism.
“The corporate body here is Enbridge Canada. They have 250 subsidiaries. There are two U.S. subsidiaries that have signed the documents covering Line 5; two of the 250,” he said. “There is no legal obligation for Enbridge to come to save a company, one of their subsidiaries, in bankruptcies.”
As for the anchor supports, he said the state has approved 228 of these permits. They’re screws that go 10 feet into the lake bed, but the lake bed may not be stable.
Page said another thing the screws do is hold Line 5 off the lake bottom. When all of the 228 supports are in place, more than three miles of Line 5 will be two to four feet off the bottom.
“On April 1, 2018, we had a three-day blizzard immediately thereafter, and not a boat could get out in the water,” he said of the latest anchor strike. “If Line 5 breaks right now, we’ve got a big storm coming,” he cautioned.
According to Page, the containment of an oil spill – even under the most ideal conditions – only has a 30 percent recovery as the norm. “We don’t know the time bomb we’re sitting on.”
“The DNR does receive funds from Enbridge for leasing the property under the Straits, correct?” asked Osmer.
Panel members said this is not the case, and that a one-time payment of $2,450 was received for Enbridge to use the lake bed.
One attendee asked if anybody had looked at the long-term North American oil market, saying that, if a costly tunnel is put in, maybe 10 years from now there won’t even be any oil to go through that.
Kennedy said this has been his concern all along, and he questioned why there would be an investment in a structure that is intended to be a 50-year tunnel. “It’s supposed to last 50 years, if and when it ever gets built. Why would we want to do that when the climate crisis we’re facing dictates that we are not going to be able to rely on oil as heavily as we have in the past, or we’re not going to be here?”
Manning said he doesn’t feel like he is qualified to opine on that, but there are multiple studies which predict that the fossil fuel industry is essentially at the tail end of its life span. “I think it’s an entirely legitimate point to raise about whether you invest that much money in something that’s going to be obsolete.”