Enbridge Seeks Ruling on Agreement Enforcement

Calgary-based Enbridge Inc. has filed a legal action with the Michigan Court of Claims to establish the constitutional validity and enforceability of agreements signed between the company and the state of Michigan. The action relates to the construction and operation of a tunnel underneath the Straits of Mackinac to house a replacement for Enbridge’s Line 5 pipeline.

Enbridge has been operating the Line 5 pipeline safely for 65 years. During that time there have been no releases from the dual lines into the straits. In addition, the pipelines are subject to the most extensive operating and risk management plan of any section of pipe in Enbridge’s extensive system. “Our program dramatically exceeds federal regulatory requirements,” the Canadian energy provider emphasizes. “That’s because our goal has always been not just to meet, but exceed, regulatory standards.”

Despite Line 5’s exemplary safety record, in response to concerns raised by some in Michigan, Enbridge is prepared to improve safety even more by investing $500 million to construct and operate a concrete-walled tunnel 100 feet below the Straits of Mackinac lakebed, in which a new Line 5 would be housed by 2024. This would reduce the risk of potential leaks into the straits to virtually zero, the company observes.

Enbridge entered into a series of agreements with Michigan in 2017 and 2018 to replace the current Line 5 with a new line located inside a tunnel. The state affirmed those agreements and Enbridge’s right to continue to operate the existing Line 5 until a replacement was completed. The new Whitmer administration has declared the agreements invalid and has offered no viable alternative, insisting that the straits pipelines be shut down within two years. This timeframe will not allow tunnel construction and pipeline replacement to be completed.

“We are taking this action in order to protect Michigan consumers,” said Guy Jarvis, Enbridge executive vice president, liquids pipelines. “We require a court review of the enforceability in order to remove obstacles to building the tunnel as quickly as possible and ensure energy security and environmental protection for Michigan.”

Enbridge holds that tunnel project construction can commence in 2021 and the pipeline can enter service as soon as 2024, assuming there are no further delays in the permitting process. The company has further committed that operation of the existing straits Line 5 crossing will cease immediately following the placement into service of the new pipeline in the tunnel.

This plan would avoid significant adverse impacts to the state’s energy supply, including higher energy costs, supply shortages for propane and transportation fuels, and constrained supplies for regional refineries that would result if the line was shut down before the new tunnel is completed, as the state has suggested, Enbridge said.

(SOURCE: The Weekly Propane Newsletter, June 1, 2019)