
The state is revoking the easement for violation of the public trust doctrine, given the unreasonable risk that continued operation of the dual pipelines poses to the Great Lakes. A portion of the 645-mile pipeline runs through the Straits of Mackinac.
"Line 5 is an essential source of energy for not only MI but for the entire region including Wisconsin, Indiana, Ohio, Pennsylvania, Ontario, and Quebec". In June 2020, Enbridge disclosed that the pipelines had again been struck again sometime in 2019 by anchors, potentially from vessels belonging to the company's own contractors.
The company says the underwater segment has never leaked. Enbridge has routinely refused to take action to protect our Great Lakes and the millions of Americans who depend on them for clean drinking water and good jobs.
If Line 5 were shut down, Enbridge would suffer a roughly 3 per cent hit to its expected earnings before taxes, interest, depreciation and amortization, according to a research note from BMO Capital Markets analyst Ben Pham.
In 2018, Enbridge built a $500-million utility tunnel to protect the pipeline, which could end up being not enough to save the pipeline's flow going forward.
The company is seeking state and federal permits for the project, which is not affected by Gov Whitmer's shutdown order regarding the existing pipeline.
Pressure grew as the company reported gaps in protective coating and installed supports when erosion opened wide spaces between sections of pipe and the lake bed.
In a termination notice, Whitmer's office said the easement should not have been granted in 1953. Moreover, the state also found that the continued use of the dual pipelines can not be reconciled with the public's rights in the Great Lakes and the State's duty to protect them.
It referred to a Michigan Technological University report that said oil discharged in the straits could harm fish and foul hundreds of miles of beaches, dunes and wetlands. The easement requires Enbridge to exercise due care in operating the pipelines, and also requires Enbridge to satisfy numerous specific conditions, such as ensuring that the pipelines are physically supported at least every 75 feet, are covered by a multi-layer coating to prevent corrosion and other physical damage, and are within certain curvature limitations.
A shutdown of the pipeline could therefore affect refineries processing 846,000 barrels of oil per day - or a major chunk of total refining capacity in Ontario, Michigan, Ohio and Pennsylvania.
"It's kind of political suicide", Skolnick said of the motion to cancel the easement, noting that Whitmer has tried as recently as June to halt shipments of oil on the pipeline after one of the anchors at the bottom of the Straits shifted. "Our number one priority is protecting the Great Lakes and we will continue to work with our partners across MI in pursuit of that objective".
Republican state Sen. Jim Stamas said the governor had sided with "environmental extremists" instead of "hardworking Northern Michigan families".
What's Next: The news from MI comes shortly after The Star Tribune reported Minnesota regulators approved permits for Enbridge's Line 3 replacement, which could begin construction in December.
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