Commentary: America needs pipelines — who knew?

'The ransomware attack against Colonial Pipelines showed how critical pipelines are to the American economy'

By Mark Milke and Lennie Kaplan
A sign warns consumers on the availability of gasoline at a RaceTrac gas station on May 11, 2021, in Smyrna, Georgia. A ransomware attack on Colonial Pipeline forced the company to shut down its entire network. Getty Images photo

There’s nothing like real life as a corrective to Disney-like musings, where fantasies are concocted absent any connection to reality.

The newest example of this comes from a recent ransomware attack directed against Atlanta-based Colonial Pipelines. The American pipeline company, which ships 100 million gallons of refined fuel daily, was hacked and given a ransomware demand by an entity known as DarkSide. It locked the company out of its own network, which affected its ability to move fuel through its 5,500-mile pipeline network, which stretches from Houston to Linden, New Jersey. As of this writing, Colonial’s four main pipelines are offline, but could return to service one week after being shut down.

To give you some sense of the magnitude of interrupting pipeline shipments of 100 million gallons of fuel daily, that’s nearly one-third of the 337 millions of gallons of fuel used daily by American consumers, businesses and governments. Another sobering fact: The 100 million gallons from Colonial Pipelines is responsible for 45 per cent of the fuel consumed on the East Coast.

Such refined fuel — gasoline, diesel, propane — is of course used for every conceivable purpose.

Those include the fuel necessary for automobiles so parents can commute to work and drop kids off at school.  It includes the fuel for trucks that deliver food, water, and medicines to 328 million Americans daily, via their stops at farms, factories, pharmaceutical plants, distribution warehouses, and ultimately to grocery stores, pharmacies, and hospitals, among other locations. Those 100 million gallons of fuel now interrupted are also rather critical in supplying fuel for ships and airplanes, both commercial and for America’s military.

The U.S. Department of Transportation has issued a temporary waiver to allow trucks that deliver fuel to work much longer hours than normally allowed, this to partially mitigate the disruption in the fuel supply chain already occurring. The exemption applies to many southern and northeast states, including Alabama and Arkansas and up to New York and Pennsylvania.

The reality check in all this should be obvious: Pipelines that carry raw crude or natural gas or refined fuels are all necessary to the modern American economy. Reflexive opposition to them is nonsensical because demand for oil and gas is there, and the attributes of hydrocarbons mean other energy cannot replace them any time soon.

As the world expert on energy transitions, Manitoba professor of environment (emeritus) Vaclav Smil has pointed out repeatedly, attempts to design “hypothetical roadmaps outlining complete elimination of fossil carbon from the global energy supply” are, as he puts it, “nothing but an exercise in wishful thinking that ignores fundamental physical realities.”

The problem for Americans and Canadians alike is that such wish-upon-a-star thinking has been routine at the highest levels.

In Canada, opposition to pipelines or pipeline routes has come from premiers in Quebec and British Columbia. The federal government has enacted onerous legislation (Bills C-48 and C-69) that act as a regulatory thicket to energy development, and also banned large tanker traffic on the north coast of B.C.

In the United States, former president Barack Obama was the first to try and spike the cross-border Keystone XL pipeline, a move imitated by President Joe Biden when he entered office in January.

In addition, Michigan’s Governor has demanded that Line 5, which carries light oil and natural gas liquids between Superior, Wisconsin, and Sarnia, Ontario, be shut down. That’s because it runs under the Straits of Mackinac, even though the existing pipeline has never leaked, and the replacement pipeline is to be buried even deeper under the lake and encased in cement.

There are consequences if the Governor’s directive to shut down Line 5 is successful. Consequences include not hiring up to 325 Michigan construction workers and others such as engineers for the replacement line (and at salaries of between $60,000 to $200,000).

Also, there is no way to replace the 540,000 barrels per day of light crude oil, light synthetic crude, and natural gas liquids that travels through Line 5, much of which is later refined into propane. Also, shutting off Line 5 would reduce most capacity in refineries in Michigan, Ohio, Pennsylvania, Ontario, and Quebec. Those refineries, all served by Enbridge’s Line 5, would receive 45 per cent less from Enbridge than their current supply of gas, diesel, and jet fuel.

Michigan alone would face a propane supply shortage of 756,000 US gallons per day, or 55 per cent of current supply, since there are no short-term alternatives for transporting natural gas liquids to market. And ponder where Detroit International Airport will replace half of the aviation fuel that now comes from Line 5 via a Toledo refinery.

Here’s the big picture: The ransomware attack against Colonial Pipelines showed how critical pipelines are to the American economy, daily life, and every entity from hospitals to homes. Meanwhile, too many politicians in both Canada and the U.S. are enamoured with the notion that their citizens do not need pipelines, the end result of which — cancelled project and shutdowns — will produce exactly the same outcomes as a ransomware attack.

Mark Milke and Lennie Kaplan are with the Canadian Energy Centre, an Alberta government corporation funded in part by carbon taxes. They are authors of the report, “$5.8 Billion: A Michigan-Canada Energy Snapshot.”

The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.