A key artery in the network supplying Michigan, Ontario and Quebec with essential petroleum products has cleared a critical hurdle to continue operations. 

In December, Michigan’s Public Service Commission approved a US$500 million project to replace about seven kilometres of the existing Line 5 pipeline underwater in the Straits of Mackinac with a new pipeline housed in a concrete tunnel far beneath the lakebed. 

“The commission recognized the reality, which is the public needs the Line 5 tunnel and the products it transports,” says Jason Hayes, director of environmental policy at the Mackinac Centre for Public Policy.  

“This is how it is supposed to work, although it took more than three years to get there.” 

An energy lifeline 

The existing Enbridge Line 5 pipeline has operated since 1953. It moves up to 87 million litres of crude oil and natural gas products for use daily between Superior, Wisconsin and Michigan, Ohio, Ontario and Quebec. 

“The average person doesn’t always understand how crucial it is. We do in Sarnia,” says Scott Archer, business agent for UA 663, a local union that representing pipe fitters and welders who work in refineries and petrochemical facilities in Sarnia, Ontario. 

“Line 5 is the lifeline for Ontario and also provides feedstock for refineries in Quebec. All of our refineries receive their feedstock from it. It’s what provides vehicle fuel for private and public transportation. Trucking and the railroads rely on it. Our agriculture industry uses it to dry crops.” 

The 1,600 members of UA 663 understand that continued operation of Line 5 doesn’t just affect them or their families, Archer says.   

“It’s really the entire region,” he says. 

“We have 70,000 people who live in this town and almost all of them depend on Line 5 to feed their families and keep a roof over their head.” 

The project approval means just as much in Michigan and Ohio, where the Enbridge network supplies refineries in Detroit and Toledo, as well as propane throughout the region. 

“Michigan uses more propane than any other state in the lower 48,” Hayes says.  

“About 55 per cent of the propane that heats homes and cooks food in our state goes through Line 5 and comes from Sarnia. Half of the jet fuel used at the Detroit International Airport comes from Line 5 feedstock. It’s essential to keep our state going.” 

Additional approvals required 

The tunnel project will need the approval of the Army Corps of Engineers at the federal level before Enbridge can start construction. The Army Corps is completing its environmental impact assessment, expected for completion in 2026.  

Michigan’s attorney general Dana Nessel also continues to pursue court action in an effort to shut Line 5 down.  

“The commission’s decision is still a big win,” Hayes says. 

 “[It] acknowledges the reality for regular people in Michigan and Ontario, who need fossil fuels, and the products made from them, in their day-to-day lives right now. It makes no sense to oppose a project that seeks to make it safer to transport them.”  

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Calgary-based Enbridge is advancing a US$450 million project to relocate a Wisconsin portion of the critical Line 5 pipeline at the request of the Bad River Band of Lake Superior Chippewa.  

Opponents do not want the re-route to proceed and instead are pressing for Line 5 to be shut down entirely. 

This threatens energy security in the U.S. and Canada – and thousands of jobs on both sides of the border – amid the growing global energy crisis caused by Russia’s invasion of Ukraine.  

Here are the facts.  

Fact: Line 5 is critical to North American energy security 

Line 5 is a model example of shared energy security between Canada and the United States.  

The approximately 1,000-kilometre pipeline is a key part of the Enbridge Mainline system, linking energy suppliers and consumers across the border.  

It runs from Superior, Wisconsin to Sarnia, Ontario, carrying crude oil and natural gas liquids to Michigan, Ohio, Pennsylvania, Ontario and Quebec.  

The pipeline traverses northern Wisconsin for about 160 kilometres, about 20 kilometres of which goes through the Bad River Reservation. 

The products delivered on Line 5 are processed into gasoline, diesel, jet fuel and propane, including about 45 per cent of the petroleum currently required by refineries in Ontario, Quebec, Michigan, Ohio and Pennsylvania. 

U.S. demand for these products is expected to grow in the coming decades even as more renewable energy comes online.  

The U.S. Energy Information Administration projects that petroleum demand will increase to nearly 19 million barrels per day in 2050 compared to 17 million barrels per day in 2021.  

Fact: Enbridge is advancing solutions for continued reliable energy supply 

In Michigan, Governor Gretchen Whitmer continues to seek to shut down Line 5 even though the pipeline has operated without a single spill in Michigan’s Straights of Mackinac for nearly 70 years.  

Estimates are it would take 2,000 trucks or 800 rail cars going one-way each day to transport the same volume of petroleum to customers, resulting in higher emissions and greater risk of a spill if Line 5 is shut down. 

Enbridge is advancing a US$500 million tunnel project in Michigan to safely house a new replacement pipeline, ensuring safe and reliable energy to satisfy demand long into the future. 

In Wisconsin, the company started the permitting process to reroute the pipeline around the Bad River Reservation in February 2020 after the tribe launched legal action to remove it.  

The company says it is committed to continued dialogue with the Bad River leadership and will move forward with the re-route to maintain uninterrupted service to energy consumers who rely on Line 5.  

Fact: Landowners support the re-route 

The Line 5 relocation in Wisconsin would replace about 20 kilometres of pipeline through the Bad River Reservation with about 65 kilometres of new pipeline that goes around the reservation’s borders.  

Enbridge says it has reached agreements with 100 per cent of the landowners along the proposed route, or about 300 property owners who have agreed to have the pipeline cross their land.  

The path of the re-route was chosen because it minimizes environmental impacts and protects critical resources, the company says.  

Fact: Line 5 relocation would benefit Native Americans 

The Line 5 relocation would provide economic opportunities for Native American communities.  

Enbridge estimates that US$46 million will be spent with Native-owned businesses and communities over the course of the project.  

There will be hiring and training for Native American workers, who will make up about 10 per cent of the project workforce, the company says.  

Fact: The project is backed by American unions 

In April 2022 Enbridge signed a project labour agreement with four U.S. unions and Wisconsin-based contractor Michels Pipeline Inc., securing their involvement in the Line 5 relocation project.  

In all, the project is expected to create 700 construction jobs.  

Enbridge is currently moving its applications through the regulatory process, with approvals required by federal and state agencies before it can proceed.  

Fact: Shutting down Line 5 would hurt Americans and Canadians 

Americans and Canadians would pay significantly more for everyday transportation fuels if Line 5 is shut down. 

Families and businesses across the U.S. Midwest would collectively pay at least US$4.8 billion per year more for diesel and gasoline because of the lost reliable supply to area refineries, according to a March 2022 report by the Houston, Texas-based Consumer Energy Alliance (CEA).   

That’s in addition to thousands of anticipated job losses – nearly 34,000 in Ohio, Michigan, Indiana and Pennsylvania, according to a 2021 CEA report, and up to 28,500 in Ontario, according to the St Lawrence Corridor Economic Development Commission.   

The Line 5 relocation in Wisconsin and tunnel project in Michigan are critical to ensure this does not happen.  

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A new report finding that Americans would pay billions more for everyday transportation fuels if the Line 5 pipeline is shut down is particularly alarming given the growing global energy security crisis from Russia’s invasion of Ukraine, say lawmakers in the U.S. Midwest.  

“It is absolutely infuriating that closing Line 5 is still up for discussion with everything going on in the world today. Closing another pipeline, especially one as important as Line 5, will make us even more dependent on foreign oil,” said Ohio state senator (R) Theresa Gavarone.  

“On top of the skyrocketing inflation, closing Line 5 would be devastating for families who are already struggling to make ends meet or businesses that are on the brink of closure.” 

Line 5 is a key part of the Enbridge Mainline system linking energy suppliers and consumers in Canada and the U.S. It runs from Superior, Wisconsin to Sarnia, Ontario, carrying crude oil and natural gas liquids to Michigan, Ohio, Pennsylvania, Ontario and Quebec.  

Michigan governor Gretchen Whitmer is trying to shut down the pipeline over perceived concerns of a spill where it crosses the Straits of Mackinac. Line 5 has operated in the waterways for nearly 70 years without a single leak, and now uses advanced marine safety monitoring that has been third-party verified as highly effective.  

If Line 5 is shut down, families and businesses across the Midwest would collectively pay at least US$4.8 billion per year more for diesel and gasoline because of the lost reliable supply to area refineries, according to a new report published by the Houston, Texas-based Consumer Energy Alliance (CEA).  

That’s in addition to thousands of anticipated job losses – nearly 34,000 in Ohio, Michigan, Indiana and Pennsylvania, according to a 2021 CEA report, and up to 28,500 in Ontario, according to the St Lawrence Corridor Economic Development Commission.  

While the CEA’s report on fuel costs didn’t look at Canada, its authors believe that shutting down Line 5 would cause great challenges in Canada as well.  

“There is no doubt in our minds that the impacts would be perhaps as severe as we measured for these U.S. states when you consider that Line 5 is also supplying refineries on the Canadian side of the border,” said Terry Clower, who co-wrote the report for CEA. 

Justin Donnelly is one of the thousands of people could expect to lose their jobs if Line 5 is shut down. The president of United Steelworkers Local 912, he has been working at the Toledo Refining Company in Oregon, Ohio for over 18 years.  

“A combined total of about 1,200 hardworking men and women from the Midwest region who work at that refinery would lose their jobs, causing a ripple effect that isn’t being taken enough into account,” he said.  

“Why would we want to strap people with that cost when so many are already struggling? And more importantly, there isn’t a good reason to do so. The existing Line 5 is safe…Enbridge [also] has proposed the Great Lakes tunnel project that will move this already safe pipeline into a tunnel deep within the bedrock under the Straits, taking the little bit of risk from where it is today to a statistical zero.” 

Enbridge has been granted approval to select a contractor to build the $500 million tunnel project. It still requires permits before it can proceed.  

Michigan state representative Sara Cambensy (D) was one of the original lawmakers who voted to approve the tunnel in 2018.  

“To this day, those opposed to build the Great Lakes tunnel have no serious plan. And they’re not talking about the impacts to our families, our communities and our businesses that rely on this pipeline,” she said. 

“The U.S. Energy Information Administration projects that energy consumption will only continue to grow to 2050. How can we be talking about shutting down a major supply of energy at this point? Pipelines are the safest way to transport oil and gas. They keep our jobs or industry, our citizens and our businesses functioning.”

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An environmental group proposing a laundry list of unrealistic alternatives to replace Line 5 ignores many key facts and realities about the critical cross-border pipeline. 

Environmental Defence argues that the closure of Line 5, which runs from Superior, WI to Sarnia, Ont., including a 7-kilometre stretch where it crosses Michigan’s Straits of Mackinac, is “inevitable,” downplaying the potential devastating impact of its closure on both sides of the border. 

The group suggests a combination of upgrades to existing pipeline infrastructure, increased rail or marine tanker traffic or the use of even older pipeline infrastructure, however the report acknowledges the likelihood of rationing supply to Canadian refineries, higher prices at the pump and the need for increased imports from foreign suppliers to meet demand. 

Despite suggesting “alternatives” to replace the supply of critical energy products via Line 5, the report concludes that the pipeline’s closure should be accompanied by a strategy to abolish the use of fossil fuels in Canada along with a “just plan” for the thousands of Canadian industry workers whose jobs would be impacted by such drastic action. 

Here is what Environmental Defence is not acknowledging in their report:  

Fact: The closure of Line 5 is not remotely “inevitable”  

While the report suggests the pipeline’s fate is sealed and will be ultimately closed “either through court order or due to a rupture,” there is little evidence to support either claim. 

On the legal side, Line 5’s most ardent opponent, Michigan Gov. Gretchen Whitmer, has struggled to make the case that the fate of the pipeline is a state issue, and not the jurisdiction the federal courts, which both pipeline owner Enbridge and the Canadian government have argued in favour of. 

Last November, a U.S. Circuit Court Judge sided with Enbridge against a move by Michigan’s battle to have their case against Line 5 heard in a state court, noting the case involves “substantial federal issues.” 

Shortly after the ruling, Whitmer abandoned the federal case and renewed focus on a state court action originally filed in 2019 against Enbridge by Michigan’s attorney general. 

Meanwhile, the Canadian government, arguing the pipeline is a critical source of resources to Ontario and Quebec, have invoked a 1977 treaty designed to ensure the uninterrupted flow of cross-border energy between the two countries. 

The White House has said it has no immediate plans to call for the pipeline’s closure, and will continue talks with Ottawa on the future of the line. 

Fact: Line 5 remains very safe 

The report further suggests that an environmental disaster in the Great Lakes due to the pipeline’s rupture is a near certainty, despite offering little in the way of evidence that the section under the Straits of Mackinac is an imminent threat. 

In its 68 years of operation, Line 5 hasn’t had a single release where it runs between Lake Michigan and Lake Huron. The walls of the dual pipelines are three times as thick as those of a typical pipeline, with an “incredibly durable” enamel coating to protect from corrosion and potential impacts, Enbridge says, while the area above the pipeline has been designated a “no-anchor” zone. 

Despite the spotless safety record of that section, Enbridge is working to make the critical connector even safer, with a planned Great Lakes Tunnel project, which will replace the existing Line 5 with a new pipeline secured inside a concrete tunnel located approximately 100 feet below the lakebed. 

The U.S. Army Corps of Engineers is now conducting an environmental impact statement review of the project, while the Michigan Public Service Commission’s permitting process is ongoing. Construction is expected to take approximately three years to complete, following regulatory approvals. 

Fact: Line 5 is important for regions beyond just Ontario and Quebec 

While the report largely focuses on the impact to refineries and consumers in the provinces of Ontario and Quebec, it downplays the importance of Line 5 providing crucial feedstocks to refineries in several US states, and the impact of its closure on Americans. 

Line 5 supplies about 45 per cent of the petroleum currently required by refineries in Ontario, Quebec, Michigan, Ohio and Pennsylvania. 

Oil and natural gas liquids delivered on Line 5 is processed into gasoline, diesel, jet fuel and propane, including 100 per cent of the jet fuel used at Toronto’s Pearson Airport and more than half of the jet fuel for the Detroit Metro Airport. 

Line 5 also provides about 55 per cent of propane requirements, primarily for heating, in Michigan, the largest residential consumer of propane in the US.  

While the report estimates Canadian consumers would see what the authors deem a marginal impact, paying an extra 1.8 cents per litre on gasoline, it ignores other independent studies that have reviewed the potential impact on US customers. 

A study conducted on behalf of the State of Michigan found that alternatives to Line 5 would likely increase the price of propane on both a wholesale and retail level. 

The Mackinac Centre for Public Policy estimates that if Line 5 were shut down, Michigan residents could have to spend $25,000 to convert from propane to electric heating, followed by a $3,500 annual increase to their annual heating costs. That could affect 330,000 Michigan residents. 

Fact: Demand for oil and gas in North America will only increase 

The report weighs the potential environmental risk of the Line 5 pipeline against whether it’s “actually needed to meet our energy needs.” 

 However, the idea that the closure of one pipeline would achieve that end is extremely debatable given between the U.S. and Canada there is an existing network of more than 450,000 kilometres of pipelines, enough to circle the Earth 11 times, that move millions of barrels per day of crude oil, natural gas, and refined petroleum products between the neighbouring nations. 

The report further suggestions Canada needs to abandon the notion of “energy nationalism” and embrace the “ability of refiners to import from global markets over an energy nationalism model where Canada meets domestic demand first, and only exports excess.” 

But regional energy security has only become more critical as global economies emerge from the Covid-19 pandemic. Last year, US President Joe Biden’s plea for OPEC+ nations like Saudi Arabia and Russia to pump more oil to meet soaring domestic demand and lower gas prices was snubbed. Meanwhile, the European Union accused Russia of “weaponizing” its natural gas supply amid a massive spike in energy prices prompted by underperforming renewable energy assets. 

Demand for oil and gas in Canada and the US, meanwhile, will remain significant for decades to come. 

Outlooks by both the Canada Energy Regulator (CER) and U.S. Energy Information Administration (EIA) project that oil and gas will continue to dominate energy supply to 2050. The reference case of the CER’s latest outlook sees natural gas and refined petroleum products meeting 73 per cent of Canadians’ energy needs in three decades, compared to 77 per cent in 2020. 

In the CER’s “evolving scenario,” which assumes actions to decarbonize increase, natural gas and refined petroleum products supply 64 per cent of Canadian demand in 2050. 

Meanwhile, the EIA’s latest outlook base case sees oil and petroleum supplying 70 per cent of total U.S. energy consumption in 2050, essentially the same as their market share in 2020. In the EIA’s scenario that includes lower costs for renewable energy development, oil and gas still meet 67 per cent of U.S. energy demand in three decades. 

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Anyone who’s been paying attention to the increasingly fraught battles over oil and gas projects has seen a decided shift in the strategies employed by industry opponents.

While peaceful protest by earnest citizens remains the primary vehicle of dissent, and is rightly protected by our constitution, there is a growing edge to the tactics employed by professional activists, which have become more and more extreme, threatening our country’s economic well being as well as the health and safety of the public.

Troublingly, permissiveness of violent and extreme action to counter fossil fuel projects is becoming more mainstream, with Canadian environmental activist David Suzuki stating this weekend that “the next stage after this [is] there are going to be pipelines blown up if our leaders don’t pay attention to what’s going on.”

His statement follows London’s the Guardian on Thursday publishing a column by activist and author Andreas Malm, called “The moral case for destroying fossil fuel infrastructure.”

Malm, who wrote the controversial book How to Blow Up a Pipeline, argues that sabotaging equipment used in the construction of even legally permitted projects is a moral imperative.

“We could destroy the machines that destroy this planet. If someone has planted a time bomb in your home, you are entitled to dismantle it,” he wrote.

“This is the moral case which, I would argue, justifies destroying fossil fuel property. That is completely separate from harming human bodies, for which there is no moral case.”

Hours after Malm’s column was published, Mounties in B.C. began a “rescue mission” after 500 workers, including members of the Wet’suwet’en community, were trapped following the erection of three blockades on the Morice River public forest service road by activists, blocking all exits and access to two lodges while cutting off access to food, water and vital medical care.

Activists allegedly used stolen heavy equipment to fell trees and, in at least one case, tear up a portion of the road. When RCMP moved in to reopen the roadway, one was blocked with a crushed van and another vehicle that was set on fire.

Following the raid, RCMP arrested 14 people for breaching a Supreme Court of BC injunction that prevents obstruction of the road.

In a statement, Chief Superintendent John Brewer said police made the decision to intercede because workers trapped in the camp were “nearing the end of their essential supplies.”

“We have serious concerns that a number of individuals from out of province and out of country have been engaging in illegal activities in the area, such as falling trees, stealing or vandalizing heavy machinery and equipment and causing major destruction to the forestry road, all in an effort to prevent industry and police from moving through,” he said.

While Malm acknowledges there’s no “moral cause” for harming people, the escalation of activist tactics is absolutely putting innocent people in jeopardy.

A few recent examples:

• Three weeks before the latest flare up by CGL opponents, activists allegedly damaged and stole heavy equipment, in some cases by force, according to TC Energy. They then went on to block the only access to a work camp with 500 people. According to a news release from the Likhts’amisyu, one of five bands within the Wet’suwet’en Nation, hereditary Chief Dini ze’ Dsta’hyl was arrested and then released after “decommissioning” 10 pieces of heavy construction equipment “in observance of Wet’suwet’en trespass laws.”
• Shortly after that arrest, anarchist group Montreal Counter-Information, posted an anonymous video taking credit for smashing the windows at five RBC branches in the Quebec city while using a fire-extinguisher filled with paint to vandalize the facade of another in solidarity with activists opposed to CGL. They also implied the potential targeting of RBC employees. “If RBC wants to f— around, RBC is going to find out. The institutions, companies, and individuals responsible for ecocidal industry have names and addresses. RBC branches, ATMs, CEOs and board members are no exception,” the video said, posting a list of RBC executive members. RBC is one of the primary lenders for CGL.
• In October, the FBI joined an ongoing police investigation in Michigan after the Line 5 pipeline project, which connects western Canadian petroleum to refineries in eastern Canada and the U.S., was tampered with by protesters, forcing it to briefly shut down. An unidentified, masked individual crawled under a security fence and used a pipe wrench to close a safety valve, authorities said, prompting Enbridge to temporarily close the critical pipeline due to the “reckless and dangerous” interference.
• In September, a worker on the Trans Mountain pipeline expansion in Burnaby was knocked unconscious by a falling tree branch while protesters were doing a “tree-sit” aimed at stopping the federally backed project from removing obstacles on the route. A few months earlier, an activist dubbed “Dr. Anonymous” embedded galvanized spikes in several trees to make them difficult to remove. Similar tactics have historically been used by logging protesters and have resulted in injuries to workers.
• Over the summer, nearly 180 Line 3 protesters in Minnesota were arrested after “an extensive amount of damage” to equipment being used by Enbridge on the now completed project. Some 300 protesters assembled at a pumping station and allegedly began trying to scale the fence with ladders. The company said 43 employees on site were unable to escape the property after they were locked in by protesters. The local sheriff’s department said in addition to the damaged equipment, protesters left behind garbage, feces and a large boat that they had chained themselves to.
• In August, one of two women accused of using shunts on railway tracks near Bellingham, Washington that could have caused a train derailment pleaded guilty to terrorism charges. A month later, her accomplice was convicted as well, and both now face up to 20 years in prison. Authorities believe the actions were done in opposition to the CGL pipeline. The FBI is investigating at least 41 incidents of railway sabotage in Washington state dating back to January 2020, including one last December that saw a train derail in Custer, spilling 130,000 litres of crude oil and prompting the evacuation of 120 nearby people.

Protesters opposed to oil and gas projects certainly aren’t new. What is new are the increasingly violent and destructive tactics being employed by a few that are putting innocent people in harm’s way.

In all the cases documented above, the projects have gone through all the necessary legal and regulatory processes, which in Canada have grown more rigorous in recent years and include unprecedented consultation and collaboration with affected Indigenous communities.

In the case of CGL, while activists have styled themselves as defending the rights of impacted Indigenous communities, they tend to ignore the fact that all 20 elected First Nations along the 670-kilometre pipeline route from Dawson Creek, B.C. to the LNG Canada terminal on the coast at Kitimat (including five Wet’suwet’en bands) support the project and have signed agreements that engage them in development.

As well, more than one-third of work so far has been conducted by Indigenous people, with $825 million in contracts awarded so far to Indigenous and local businesses, according to Coastal GasLink.

Even more puzzling from the standpoint of activists who claim to be taking action to help battle climate change, is that fact the same natural gas that will eventually flow through CGL to the still under construction LNG Canada terminal in Kitimat, BC, can make a real difference in helping to reduce global emissions.

With much of Asia still heavily reliant on coal, switching to cleaner burning natural gas can have a significant impact on lowering greenhouse gas emissions. According to a June 2020 study published in the Journal for Cleaner Production, replacing coal power with natural gas from Canada in China could reduce emissions by up to 62 per cent.

Canada is a proud democracy and any healthy democracy needs debate and healthy conversations about our future and the best way to approach it.

Violence when used to further an anti-oil and gas agenda is morally wrong, and has the potential to seriously harm citizens.

And the potential implications are frightening.

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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.”

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Overview

There has been a lot of discussion in the media about the Michigan governor, Gretchen Whitmer, and her attempts to end operations for Enbridge Line 5, the pipeline that winds its way between Superior, Wisconsin, and Sarnia, Ontario. The pipeline carries products that fuel the region’s industries and communities: light oil, synthetic light oil, and natural gas liquids (NGLs), much of which is refined into propane.

Enbridge has applied to state regulators in Michigan and federal regulators in Canada for permission to commence a $500-million project to make Line 5 even safer, enabling continued reliable energy delivery while boosting employment in the region.

While there has been much attention paid to the fate of Line 5 itself, there has been little analysis of the strong links between Michigan and Canada when it comes to energy, most notably energy trade (exports and imports), and the economic impact of the pipeline transportation sector in Michigan.

Energy trade flows between Michigan and Canada

According to the US Energy Information Administration (EIA),

Several interstate pipelines cross Michigan and there are also five U.S.-Canadian natural gas pipeline crossings…Natural gas enters Michigan from Ohio, Indiana, and Wisconsin, and, although Michigan receives a small amount of pipeline natural gas from Canada, the bulk of the natural gas flowing across the border goes into Canada, most of it at St. Clair. More natural gas enters the state than is consumed there and most of the excess is exported to Canada.

In 2019, the total value of value of energy product trade flows between Canada and Michigan was over CA$5.8 billion or US$4.4 billion (see Table 1).

Source: Statistics Canada, International Accounts and Trade Division (2021a and 20201b).

Michigan’s $1.6 billion in energy exports to Canada

The total value of energy products imported into Canada from Michigan was nearly $1.6 billion in 2019. This includes:

• Nearly $1.5 billion in natural gas;
• $11.7 million in natural gas liquids (including condensate) and related products;
• $3.5 million in hard coal;
• $82.3 million in coke and other coke oven products ;
• $7.9 million in motor gasoline; and
• $11.5 million in diesel and other biofuels (Statistics Canada, 2021a).

Canada’s $4.2 billion in energy exports to Michigan

The total value of energy products exported from Canada to Michigan was over $4.2 billion in 2019. This includes:

• $3.0 billion in conventional crude oil;
• $458.9 million in natural gas;
• $244.3 million in electricity;
• $197.5 million in natural gas liquids (including condensate) and related products;
• $82.2 million in hard coal;
• $4.9 million in coke and other coke oven products;
• $73.9 million in diesel and biodiesel fuels;
• $54.4 million in heavy fuel oils;
• $9 million in light fuel oils;
• $36.1 million in fuel wood and solid fuel products; and
• $30.3 million in motor gasoline (Statistics Canada, 2021b).

Economic impact of pipeline transportation on the Michigan economy

The pipeline transportation sector¹ has a significant impact on Michigan’s economy. It

• employed 1,430 people as of 2019, according to the U.S. Bureau of Labour Statistics; and
• made a contribution of over US$643 million to the Michigan economy in 2019, according to the U.S. Bureau of Economic Analysis.

Key labour income statistics

According to the U.S. Bureau of Labour Statistics, as of May 2019, the mean wage² for those employed in the pipeline transportation sector in Michigan was $39.20 per hour, 61 per cent higher than the mean wage for all occupations in Michigan, at $24.42. Similarly, the annual mean wage in the pipeline transportation sector was $81,530, also 61 per cent higher than the $50,780 annual mean wage for all occupations (see Figures 1 and 2)

1. Industries in the pipeline transportation subsector use transmission pipelines to transport products, such as crude oil, natural gas, refined petroleum products, and slurry. Industries are identified based on the products transported (i.e., pipeline transportation of crude oil, natural gas, refined petroleum products, and other products).
2. Annual wages have been calculated by multiplying the hourly mean wage by a “year-round, full-time” figure of 2,080 hours; for those occupations where there is no published hourly wage, the annual wage has been directly calculated from the reported survey data

Source: U.S. Bureau of Labor Statistics (2020).

Source: U.S. Bureau of Labor Statistics (2020).

Some key facts on Line 5 and its impact on Michigan, Ontario, and Quebec

Shutting down Line 5 would have adverse impacts on the economies of Michigan, Ontario, and Quebec.

Estimates indicate that an average workforce of 200 to 255 people will be required during the construction stage of the Line 5 project; when construction is at its busiest, the workforce will peak at an estimated 300 to 325 workers. The yearly wage for these workers is estimated to range from $60,000 to $200,000. These benefits would be lost if Line 5 were shut down.

Line 5 transports up to 540,000 barrels per day (bpd) of light crude oil, light synthetic crude, and natural gas liquids (NGLs), much of which is refined into propane.

• This includes 432,000 bpd of crude oil and 108,000 bpd of natural gas liquids.
• Of the 432,000 bpd of light crude oil, about 70 per cent, or 302,400 bpd, along with nearly all of the natural gas liquids, go straight through Michigan and across the St. Clair River to Sarnia, Ontario.
• Those 302,400 daily barrels of oil are refined into propane, and then returned directly to Michigan for consumption and storage.

If Line 5 were shut down,

• Refineries in Michigan, Ohio, Pennsylvania, Ontario, and Quebec, all served by Enbridge, would receive just 14.7 million US gallons of energy products per day, or about 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.

Shutting down Line 5 would have serious implications for residents of Ontario and Quebec, too:

• Line 5 transports 540,000 bpd of oil and natural gas liquids into the Sarnia area (about half of the pipeline capacity to Ontario).
• If the line were shut down, distribution points in southern Ontario would face shortfalls of gasoline, diesel, and jet fuel.
• Quebec could also be affected by rising prices in the area. Specifically, commuters and commercial transport could see higher gasoline prices.

Here’s what Michigan’s energy sector and economy would look like without Line 5:

• Michigan would need to find an alternative supply for between 4.2 million and 7.8 million US gallons of refined products (gas, diesel, jet fuel, and propane) every day.
• Line 5 provides 55% of the state’s propane needs and there are no alternatives if Line 5 shuts down.
• Currently, there are no viable options for replacing the volume of light crude that Line 5 delivers; rail can only deliver less than 10 per cent of that volume.
• Half of the aviation fuel at Detroit International Airport comes from Line 5 via a Toledo refinery; if Line 5 shuts down, the Toledo refinery shuts down as well with airline traffic disruption at Detroit International and lost jobs.
• It would take an estimated 2,100 trucks heading east every day from Superior, and travelling across Michigan, to do the same job.
• Similarly, it would take 800 rail cars a day to transport the equivalent amount of product. Using rail would increase the cost of propane by between $0.10 and $0.35 per gallon, depending on the supply location. Some of these costs would be passed on to customers.
• The infrastructure does not currently exist to support the necessary truck or rail traffic to fill the job currently done by Line 5.

Shutting down Line 5 will have impacts on home heating costs in Michigan:

• According to the investment research firm YCharts, the Michigan residential propane price was $2.025 USD per gallon, for week of March 29, 2021.
• According to recent testimony from Michael Sloan, Director of Energy Markets for ICF International before the Michigan House Energy Committee, removing Line 5 from the supply chain would boost the cost of propane by 10 to 14 cents over the long-term.

Conclusion

Michigan and Canada have developed strong and valuable energy trade links. The total value of trade flows of energy products between the two jurisdictions was over CA$5.8 billion in 2019 alone. The 1,430 people working in Michigan’s pipeline extraction sector earned an annual mean wage of $81,530 in 2019, about 61 per cent higher than the annual mean wage for all occupations in Michigan. And, the pipeline transportation sector made a contribution of over $643 million to Michigan’s economy in 2019.

Enhancing cross-border transportation infrastructure, most notably moving ahead with new pipeline projects, will be critical to maintaining and strengthening the strong energy product trade ties between Michigan and Canada.

According to the American Petroleum Institute (API),

Continued growth in U.S.-Canada petroleum trade will further strengthen the economies of both countries and further enhance North American energy security. However, such growth in trade relies on the continued development and maintenance of cross-border infrastructure to facilitate the movement of energy commodities and further integration of the North American energy market.

These are important factors to consider in any discussions over the future of Enbridge’s Line 5.

Notes

This CEC Fact Sheet was compiled by Lennie Kaplan and Mark Milke at the Canadian Energy Centre (www.canadianenergycentre.ca). Image credits: Mackinac Bridge, Mackinaw City by Aaron Burden from Unsplash.com

References (All links live as of May 1, 2021)

American Petroleum Institute (2021), U.S.-Canada Cross-Border Petroleum Trade: An Assessment of Energy Security and Economic Benefits <https://bit.ly/3dHng1A>; Bank of Canada (undated), Currency Converter, December 31, 2019 (date assumed <https://bit.ly/3spjpg0>; Enbridge (undated), The Impact of a Line 5 Shutdown <https://bit.ly/3npPXop>; Enbridge (2021), Line 5 and the Great Lakes Tunnel: Fact vs. Fiction <https://bit.ly/2Pu2ESz>; Mackinac Center for Public Policy (2020), Assessing the Costs of the U.P. Energy Task Force Committee Recommendations <https://bit.ly/3tYjgAB>; Mackinac Center for Public Policy (2020, November 24), “Whitmer Plan to Revoke Line 5 Easement Threatens Reliable, Affordable Energy for Michigan” <https://bit.ly/3npJaea>; Michigan Live (2021), Line 5 closure would hike propane costs, energy consultant testifies, <https://bit.ly/3xyGm3f>.Statistics Canada, International Accounts and Trade Division (2021a), Imports for Specified NAPCS Codes from the United States (Country of Export) by U.S. State of Export, Province of Clearance and Mode of Transport (2019), Custom Tabulation; Statistics Canada International Accounts and Trade Division (2021b), Total Exports for Specified NAPCS Codes to the United States (Country of Destination) by U.S. State of Destination, Province of Origin, Province of Clearance and Mode of Transport (2019), Custom Tabulation; US Bureau of Labor Statistics (2020), Occupational Employment and Wages, May 2019, <https://bit.ly/3nDuWXe>.; U.S. Bureau of Economic Analysis (2021), GDP in Current Dollars by County and MSA [database] <https://bit.ly/3rZKzc6>; U.S. EIA (2020), Michigan State Energy Profile <https://bit.ly/3aKbRxi>. YCharts (2021), Michigan Residential Propane Price <https://bit.ly/3vC7iNQ>.

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New estimates raise the number of jobs that could be impacted by a shutdown of the Line 5 pipeline in Ontario, Quebec and the U.S. Midwest to more than 60,000.

Nearly 34,000 jobs could be lost in Ohio, Michigan, Indiana and Pennsylvania if Michigan closes the pipeline, according to a report Monday by the Houston, Texas-based Consumer Energy Alliance (CEA).

That’s in addition to estimates of up to 5,000 direct and 23,500 indirect jobs at risk in Ontario, plus more in Quebec.

“It’s thousands of jobs in Michigan, thousands of jobs in Ohio, thousands of jobs in Ontario, and thousands of jobs in Quebec. The ripples are going to start spreading out and it’s going to impact a lot of people,” says Jason Hayes, director of environmental policy at the Michigan-based Mackinac Centre for Public Policy.

The CEA study, which focused on impacts of a shutdown in the U.S. Midwest, found that closing the line would result in a US$20.8-billion loss in economic activity and “a continuation of the exodus of people and jobs to other parts of the country.”

Line 5 carries oil and natural gas liquids from Western Canada to the U.S. Midwest, as well as Ontario and Quebec. It supplies about 45 per cent of the petroleum required by the region’s refineries, processed into products including 55 per cent of Michigan’s propane requirements, 100 per cent of the jet fuel used at Toronto’s Pearson Airport and more than half of the jet fuel for the Detroit Metro Airport.

In Michigan, Line 5 crosses the Great Lakes’ Straits of Mackinac for approximately seven kilometres, where it has been safely operating since 1953 without a single leak. However, the Michigan governor has set May 12 as the deadline for it to be shut down, based on safety concerns.

Pipeline operator Enbridge is not planning to comply with the deadline. A U.S. court-ordered mediation process is underway between the company and the State, with Enbridge arguing that the pipeline’s operations fall under federal jurisdiction and are protected by the 1977 Transit Pipeline Treaty between the U.S. and Canada.

Tunnel project to bring jobs, certainty

“I think all of us are hoping that May 12 continues to be a day of exchanging ideas and moving forward and hopefully at some point convincing everyone that Line 5 remains an essential piece of our infrastructure, whether we like to use and rely on hydrocarbons or not,” says Derek Dalling, executive director of the Michigan Propane Gas Association (MPGA).

“Line 5 is able to keep propane a very safe, reliable and affordable commodity. Without Line 5, that means transportation costs go up and those obviously just have to be passed on to the end user.”

Transporting the same amount of crude oil and natural gas liquids as delivered by Line 5 would require the less safe travel of 2,000 trucks or 800 rail cars going one-way each day. A study conducted on behalf of the State of Michigan found that alternatives to Line 5 would likely increase the price of propane on both a wholesale and retail level.

Dalling said MPGA members are firmly on board with Enbridge’s $500-million plan to replace the existing Line 5 with a new pipeline housed in a concrete tunnel underneath the lakebed. Subject to permit approvals, Enbridge targets completion of the tunnel in 2024.

“We think that, for lack of a better analogy, it’s the belt and suspenders approach to it, making a safe pipeline even safer,” Dalling said.

“With Enbridge paying for it for themselves, it just makes sense. There’s no taxpayer funds involved. The biggest thing is they need Line 5 to continue to be operational so that they can pay for that half a billion dollar project. The high paying jobs that it will bring to our region, the safety, the extra certainty it will bring just made us get on board the tunnel project from day one.”

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