A new report details what some experts believe might happen to oil and gas prices if Line 5 is shut down.
Enbridge’s Line 5 pipeline was built in 1953. It begins in Superior, Wisconsin, extends through Michigan and ends in Sarnia, Canada.
In a new report, PLG Consulting found that if Line 5 were to shut down, energy markets would adapt. With advanced notice there wouldn’t be any supply shortages or price spikes.
“The characteristics of overall North American energy supply chains combined with the unique circumstances of Line 5 products and markets mean there is a range of commercially viable and operationally feasible supply chain alternatives for each of the end use destinations and markets that would be affected by a line 5 shutdown,” the report states.
PLG also found that most of the companies that use Line 5 know a shutdown is possible and have developed contingency plans.
“Based upon careful research as well as PLG’s more than 15 years of consulting experience in energy supply chains and logistics, our analysis demonstrates that energy markets will adapt -- as they have always done and continue to do -- in the event that Line 5 is shut down. With advance notice, the markets can be expected to do so without supply shortages or price spikes,” the report states.
The Line 5 pipeline has drawn much controversy over a particular section of pipe that travels under the Straits of Mackinac. Experts have said that if that section were to rupture, the effect on Michigan’s economy and environment would be catastrophic.
---> Does Line 5 put Michigan’s Great Lakes at risk for a ‘catastrophic’ oil spill?
Enbridge argues the pipeline should continue to operate because not only does it supply much of western Canada’s crude oil, Enbridge claims Line 5 also meets 65% of the propane demand in Michigan’s upper peninsula. Enbridge wants to keep the oil flowing and has a plan to build a protective tunnel under the Straits of Mackinac to enclose the pipe.
“The best long-term plan to maintain the energy needs of this region is the Great Lakes Tunnel Project, which Enbridge is continuing to advance. It is the safer, smarter, better solution to protecting the environment and protecting our economies,” Enbridge Energy stated in response to the report.
“Enbridge has tried to justify its operation of a dangerous pipeline in the Great Lakes by arguing that Line 5 is too important to the economy to shut down. Those claims have never been true -- Enbridge is concerned with its own profits, not Michigan’s economy. As this new report shows, Michigan does not need Line 5,” Michigan Attorney General Dana Nessel said.
Last month, Nessel filed an amicus brief in support of the Wisconsin-based Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation. The tribe has filed a lawsuit against Enbridge.
Nessel’s amicus brief said that the state of Michigan has studied the potential impacts of a Line 5 shutdown for years. She said that Michigan’s studies have found that “markets will ably adjust to a court-ordered shutdown of Line 5, and that Michigan is well positioned to manage any impacts that occur.” Her brief also stated that “any impacts associated with a shutdown of Line 5 are far outweighed by the grave risk of irreparable environmental and economic harm posed by its continued operation.”
“Enbridge has known of the possibility of a Line 5 shutdown for years, and yet they have consistently claimed that a shutdown would cause an economic catastrophe.” Nessel said. “The truth is that Enbridge and the companies that receive oil and gas from Line 5 have had ample time to prepare contingency plans. The failure to do so would be professional malpractice.”
View PLG Consulting’s full report below
Enbridge Energy releases statement regarding study
The following is a statement from Enbridge Energy regarding the study:
The report’s recommendations defy common sense and would put the environment at risk by suggesting the use of more oil tankers on the waters of the Great Lakes and more rail cars crisscrossing the region to transport the product Line 5 carries.
There is already an agreed upon solution that will protect the Great Lakes and provide today the energy that is depended upon by thousands of businesses and millions of people. Enbridge has agreed to pay to build the Great Lakes Tunnel under the Straits as a means to replace the pipelines currently in the water, protect the environment and keep energy flowing.
- Energy demand will continue to increase, and the means to meet this demand will include “all forms” of energy for the foreseeable future.
- There are currently no alternatives to deliver the entirety of energy that Line 5 transports. Adding additional rail or marine vessel capacity is not only bad for the environment and our climate, but will take years, if not decades, to develop, permit, and build.
- Enbridge’s Mainline system is near capacity and is regularly apportioned – or oversubscribed.
- No pipelines in the Enbridge Mainline system, other than Line 1 and Line 5, are able to transport natural gas liquids, which is used to produce propane. Line 1 is not an option as it ends at Superior.
- To replace the energy being delivered by Line 5 would take 2,100 tanker trucks or 850 rail cars every day; adding to already congested roads and rail lines and potentially displacing other products and commodities such as auto parts and agriculture crops.
- Michigan’s own energy task force report found that any infrastructure development consisting of rail improvements or significant storage facilities associated with the use of tanker trucks would take years to permit and build.
The best long-term plan to maintain the energy needs of this region is the Great Lakes Tunnel Project, which Enbridge is continuing to advance. It is the safer, smarter, better solution to protecting the environment and protecting our economies.