Enbridge Wins Legal Fight, Attorney General Appeals

(November 18, 2019) — The Michigan Court of Claims has handed Enbridge Inc. (Calgary) a first-round victory in its legal battle to fund and construct a utility tunnel buried 100 feet beneath the bottomlands of the Straits of Mackinac. The reinforced concrete tunnel would encase Enbridge’s twin Line 5 pipelines, which transport light crude oil, light synthetic oil, and natural gas liquids, including propane.

Court of Claims Judge Michael J. Kelly ruled Oct. 31 that the enabling legislation approving construction in 2018 was consistent with the Michigan Constitution and that prior agreements authorized by the state legislature under then-serving two-term Republican Gov. Rick Snyder were valid.

As noted by the Michigan Propane Gas Association, the ruling overturns Attorney Gen. Dana Nessel’s opinion earlier this year that held the tunnel legislation violated the state constitution. Enbridge filed the lawsuit in June seeking to enforce its Line 5 tunnel deal with the state. The pact replaces the pipelines’ underwater segment beneath the Straits of Mackinac, a waterway linking lakes Michigan and Huron. Construction costs for tunnel construction would be borne by Enbridge to the tune of $350 million to $500 million. Line 5 has operated since 1953 under an easement with the state.

Nessel has filed an appeal of Kelly’s decision. “We always expected this matter would be resolved in the appellate courts,” she said. “While I disagree with Judge Kelly’s decision, I appreciate how promptly he addressed this case and issued his opinion. This is just the first step in the court process and I am more resolved than ever to continue this fight on behalf of the people of Michigan.” Nessel’s claim of appeal was filed Nov. 5.

Meanwhile, the Court of Claims ruling has no impact on Nessel’s separate lawsuit to decommission Line 5 based on the public trust doctrine and other common law and statutory claims. That case is currently before Ingham County Circuit Court Judge James Jamo. Remaining briefs in that case are due this month and Dec. 10.

As outlined by the National Propane Gas Association, in late 2018 Michigan entered into agreements with Enbridge to build the Line 5 tunnel. The Michigan Legislature approved legislation to implement the agreements, but in January 2019 a new governor, Democrat Gretchen Whitmer, and Attorney General Nessel were elected to office. Each had campaigned to shut down Line 5.

Discussions between the governor’s office and Enbridge ensued under the new administration, but subsequently broke down. Enbridge then filed suit seeking a judicial declaration on the constitutionality of the 2018 legislation, and a declaration that the tunnel agreements were valid and binding. Nessel responded by filing a separate lawsuit seeking to throw out the 1953 Line 5 easement Michigan granted to allow the pipeline to be laid under the Straits of Mackinac.

(SOURCE: The Weekly Propane Newsletter, November 18, 2019, available by subscription)