In a move sought for years by environmental advocates, tribes, and hospitality and tourism businesses, Gov. Gretchen Whitmer this month notified Enbridge Inc. that it would no longer have the state’s permission to operate the Line 5 pipeline in the Straits of Mackinac.
The administration issued a Nov. 13 notice to the Canadian pipeline company that it plans to revoke a 1953 easement that has allowed the twin light crude oil and natural gas liquids pipeline to operate in the Great Lakes. In addition to claims that the company has repeatedly violated terms of the easement, the state claims that the original agreement is a violation of public trust law, namely that a private company is using a public resource primarily for a private benefit.
Enbridge has disputed these claims in various legal and regulatory venues, and the Whitmer administration is seeking a declaratory judgment in Ingham County Circuit Court.
Enbridge Spokesperson Ryan Duffy said the company plans to file a response in court, but didn’t have a timeline for the filing.
“Enbridge remains confident that Line 5 continues to operate safely and that there is no credible basis for terminating the 1953 Easement allowing the Dual Line 5 Pipelines to cross the Straits of Mackinac,” Duffy said in an email to MiBiz. “Enbridge will vigorously defend the validity of the easement and its right to operate the pipeline.”
Whitmer’s notice gives Enbridge 180 days to prepare for the shutdown, which would extend beyond the winter months when demand for propane is higher in the Upper Peninsula.
Environmental groups welcomed the relatively aggressive move against Enbridge by the state.
“I think (the state) is very much on the offensive,” said Liz Kirkwood, an attorney and executive director of For Love of Water (FLOW), which has long advocated the pipeline’s closure. “They’re affirmatively saying under public trust law that the 1953 easement never incurred the proper public trust evaluations. As the public trustee, the state’s duty is ongoing and continuous.”
Kirkwood called it an “exceptional case” and unique, since public trust issues typically involve areas where land and water meet. “They’re typically beach-walking cases,” she said.
The administration and other legal experts have often pointed to an 1892 case involving the Illinois Central Railroad. Illinois lawmakers had allowed the railroad to run tracks along the Lake Michigan waterfront.
“Today, the public is able to enjoy Chicago’s downtown waterfront because the U.S. Supreme Court revoked that easement and said the state of Illinois could never abdicate its public trust responsibility,” Kirkwood said. “That’s such a powerful example of why the public trust is so important, and we’re all beneficiaries of this 125-plus years later.”
However, Enbridge and pipeline supporters have argued that the pipeline provides a public benefit as critical energy infrastructure. Whitmer’s critics, including the premier of Alberta Province in Canada and Ontario’s oil minister, have said shutting down Line 5 in the Straits would bottleneck supplies and cause shortages at regional refineries.
Phil Flynn, an energy analyst with Chicago-based PRICE Futures Group, compared it to shutting down a portion of highway.
“If it gets stopped in one area, it’s going to clog up other areas,” he said. “Generally when that happens, you’re going to be looking at less efficiency, higher prices and maybe also increased transportation risks” if it’s moved by truck or rail.
In a report this summer after Attorney General Dana Nessel sued to decommission Line 5, Houston-based Stratas Advisors said shutting down Line 5 would disrupt light crude oil supplies to parts of eastern Canada. The 645-mile Line 5 starts in Superior, Wis. and ends in Sarnia, Ontario.
“Until the whole supply chain comes to an equilibrium, the refineries will run at low utilization,” Strata analysts wrote.
Environmental groups also have commissioned economic analyses showing minimal cost disruptions and trucking alternatives that eliminate the risk of a Great Lakes oil spill.
Whitmer’s announcement brought swift and predictable opposition from groups that have backed a plan — passed by lawmakers in the final days of former Gov. Rick Snyder’s administration — to keep Line 5 operating while the company builds a utility tunnel that traverses beneath the lakebed in the Straits.
Revoking the easement still allows Enbridge to apply for state and federal permits for the tunnel project. However, Enbridge has fought to keep Line 5 operating during potential tunnel construction, which could take several years.
Flynn said the trust between the state and Enbridge is a “two-way street,” but it’s clear that trust has been eroded. State officials have criticized Enbridge for withholding information about the pipeline and often note the company was responsible for the largest inland oil spill in U.S. history a decade ago near Kalamazoo.
Kirkwood said the “wheels are in motion” now to activate state and federal regulators on the tunnel permitting. But potentially revoking the easement with a permanent injunction calls into question that permitting through the Michigan Public Service Commission and U.S. Army Corps of Engineers, she added.
“If Line 5 is shut down by May of next year, I think it raises all sorts of questions about the public need for this pipeline and the other feasible and prudent alternatives,” Kirkwood said. “The prospect of the current pipelines being shut down has significant relevance to the decision on whether they should be able to build a potentially billion-dollar tunnel under the Great Lakes at a time when climate change impacts and risks are unprecedented. The idea of this infrastructure becoming a stranded asset is very real.”