Outgoing Michigan Governor Presses to Lock In Line 5 Pipeline Deal

Outgoing Michigan Gov. Rick Snyder is hoping to use the final weeks of his administration to lock in a deal allowing construction of a sharply debated NGL and light crude oil pipeline tunnel under the Straits of Mackinac, a waterway linking two Great Lakes, Michigan and Huron, the Associated Press reports. The plan is opposed by his successor. Snyder, a two-term Republican, is working on several fronts to cement an agreement with Enbridge Inc. (Calgary) to replace the underwater segment of Line 5. The pipeline, in service since 1953, carries up to 540,000 bbld of light crude oil, light synthetic oil, and natural gas liquids later fractionated into purity propane between Superior, Wis. and Sarnia, Ont., traversing swaths of northern Michigan.

A more than four-mile-long section of the course, which divides into two lanes at the straits before it crosses, has been targeted by environmentalists, Native Americans, and other groups who allege it is unsafe and could cause catastrophic damage to the environment and the regional economy if it fails. Enbridge underscores that the twin pipelines have not experienced any leaks in more than six decades of operation, and that its ongoing, aggressive testing program confirms operations remain safe.

The company emphasizes the lines exceed today’s standards for pipeline safety. Bechtel Corp. managed engineering, procurement, and construction, and the underwater contractor, Merritt-Chapman & Scott, was the same company that built the iconic suspension bridge over the Straits of Mackinac, the nearly five-mile-long Mackinac Bridge commissioned in 1957. Further, before its operation Line 5 underwent extensive hydrostatic testing multiple times at more than twice the maximum operating pressure and up to four times the typical normal operating pressure, and has been retested at scheduled intervals since operations commenced.

Nonetheless, while standing on its sound condition, Enbridge reached an agreement with the Snyder administration in October to decommission the twin pipes and drill a tunnel for a new line through bedrock below the straits. The project is anticipated to take seven to 10 years and cost $350 million to $500 million. Enbridge is to pick up the costs.

Gov.-elect Gretchen Whitmer, a Democrat, pledged during her campaign to shut down Line 5 and criticized the tunnel plan. So did fellow Democrat Dana Nessel, winner of the race for attorney general. With both taking office in January, they have accused Snyder of steamrolling the tunnel plan, despite it taking more than four years to accomplish, and following the state commissioning exhaustive studies regarding alternatives and decommissioning. Enbridge picked up the tab for the studies.

Found was that Line 5 could be moved into a tunnel under the bottomlands of the Straits of Mackinac, or it could be encased in concrete and stone to satisfy environmental risk allegations. Also purported was that rail and truck transportation as a replacement for Line 5 would not incur supply shortages or constraints, nor significant economic impacts—only higher costs to consumers estimated at 5 cents/gal. for propane.
While still holding office, Synder and his team are backing a bill for the lame-duck legislative session. It calls for designating the Mackinac Bridge Authority as owner of the pipeline tunnel, responsible for overseeing construction and managing operations while leasing it to Enbridge and other potential users such as electric cable companies.

Snyder’s office has also requested $4.5 million for startup administrative costs and radar to monitor wave heights, a professed threat to pipeline integrity by critics, one among many, despite the line’s flawless performance over 65 years. As noted by the Associated Press, the seven-member authority’s single responsibility since its creation in the 1950s has been to maintain the vehicular suspension bridge that crosses the straits and links the Wolverine State’s two peninsulas. The panel heard from project proponents and opponents in November, but took no action.

The next regularly scheduled meeting is in February. The Mackinac Bridge Authority’s chairman, Patrick (Shorty) Gleason, is signaling that he has little interest in calling a special meeting to review the matter prior to the governorship changing hands. He appears to be resisting the proposed additional jurisdiction to his agency, and rather has called for negotiations with the state and the bridge authority, and for Snyder and incoming Gov. Whitmer to discuss the issue. However, Snyder recently filled four vacancies on the bridge panel, giving his appointees the majority.

Enbridge reviews that, as of June 2016, Line 5 supplies 65% of propane demand in Michigan’s Upper Peninsula and 55% of the state’s propane needs. Decommissioning of the line would result in the loss of 15,000 bbld of propane supply to the region. Further, assertions of the breadth and depth of environmental damage assumed—after six and a half decades of secure, safe, and monitored operation—should the pipeline improbably and inexplicably rupture as pipeline closure proponents envisage, appear to focus on the exaggerated impacts associated with heavy crude oil. Line 5 has never carried heavy crude.

(SOURCE: The Weekly Propane Newsletter, December 10, 2018)