Tag: Risk Report

State-Commissioned Line 5 Risk Analysis Underlines Urgency of Shutdown, FLOW Says

FOR IMMEDIATE RELEASE                                                                      August 21, 2018


Even the significantly understated economic impacts of a spill from Line 5 at the Straits of Mackinac in a state-commissioned analysis reveal a fiscal and human price tag too high for the people of Michigan, FLOW (For Love of Water) said in comments submitted to Lansing officials before Sunday’s deadline.

FLOW submitted the comments to the state on a draft Independent Risk Analysis coordinated by Dr. Guy Meadows of Michigan Technological University that was released in July.      

The Traverse City-based Great Lakes law and policy center said that while the state-commissioned analysis rests on excessively conservative assumptions that lead to underestimates, the potential $2 billion economic impact it calculates is unacceptable and justifies an immediate shutdown of the twin petroleum pipelines owned and operated by Enbridge Energy. The company was responsible for the largest inland oil spill in U.S. history when its Line 6B ruptured and contaminated the Kalamazoo River watershed in 2010.

An analysis released by FLOW in May and conducted by ecological economist Dr. Robert Richardson of Michigan State University estimated impacts and damages of over $6 billion from the same approximate volume of spill used as an assumption in the state-commissioned study.

“A Line 5 spill will ravage Michigan’s economy and environment no matter which estimate you use,” said Liz Kirkwood, executive director of FLOW.  “The state-sponsored report confirms that the economics of Line 5 are bad news for the people of Michigan and our precious Great Lakes.”

FLOW said the state-commissioned study’s flaws understate the potential impact; for example:

  • Short-term impact? The study wrongly assumes that an oil spill in the Straits will only have a short-term effect on the region’s tourism and recreational economies, commercial shipping industry, commercial fishing, and coastal property values.  It bases the short-term economic impact assumption on a recreation assessment for the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.  However, that spill occurred roughly 41 miles off the coast of Louisiana, while a potential Line 5 spill would occur approximately two miles offshore at most. This proximity to the shoreline and coastal communities amplifies the impacts of a Line 5 spill.
  • Quick cleanup? The study grossly underestimates the amount of time it will likely take to remove the dispersed oil, to the extent even possible, and start restoring the water and shorelines of Lake Michigan and Lake Huron. If the Line 5 spill estimated in the state-sponsored study were to occur, and approximately 441 miles of shoreline were affected, cleanup crews would have to restore over a mile of beach every day to ensure the shoreline would be in condition for the next summer season, when the majority of Michigan tourism and recreational activities take place.
  • No lasting harm to the Pure Michigan brand? The study does not account for any lingering stigma that a catastrophic environmental disaster would likely cast. The long-term taint and diminution of property values from a release of hazardous substances and water pollution are well documented. The Risk Analysis assumes the reduction in the value of lakefront properties would only amount to $2.6 million.  Richardson’s analysis estimates a multi-year impact of over $485 million in coastal property values.
  • Loss and damage to people, communities The Risk Analysis acknowledges that “mental health issues are a significant concern after disasters such as a potential oil spill at the Straits of Mackinac.” As significant as the effects to mental health on residents and tribal members, the Risk Analysis fails to discuss the potential costs of long-term mental health counseling, therapy, and other services needed to prevent or treat the mental health symptoms caused by a worst-case scenario Line 5 spill. The Risk Analysis also fails to evaluate the risks to the public drinking water supply on Mackinac Island, as well as the emergency response plan that would have to be implemented to ensure Mackinac Island residents and visitors have adequate drinking water supplies after a spill.

FLOW said state officials, as public trustee of the waters, should require Enbridge to submit and demonstrate through a comprehensive alternative analysis that there are no other feasible and prudent alternatives to the continued operation of Line 5 in the Straits of Mackinac. At a minimum, state officials must demand that Enbridge demonstrate that they possess sufficient liability coverage for all liabilities and/or damages stemming from the worst-case scenario Line 5 spill outlined in the Risk Analysis. Enbridge has made no attempt to do so, instead calling on the state and citizens to trust that another Kalamazoo River-scale disaster won’t happen again. 

“Trust is no substitute for hard evidence,” Kirkwood said. “Enbridge has continually failed to demonstrate it can be trusted with the future of our great waters.”


Finally, An Honest Conversation About Line 5’s Real Risks to Our Waters and Our Way of Life

Over three years ago, on July 15, 2015, the State of Michigan’s Petroleum Pipeline Task Force released its recommendations for the state to conduct an independent risk analysis and independent alternatives analysis on the Line 5 pipelines located in the open waters of the Great Lakes. The Governor’s Advisory Board, created by executive order, promised the public these two separate reports by the summer of 2017.

But just before the risk report’s release in June 2017, the state scrapped the report due to a conflict of interest involving Enbridge and the independent contractor who has simultaneously worked on Enbridge’s Line 6B pipeline. Now, three years after the initial study recommendation, we finally have the risk report estimating Enbridge’s liability at $1.8 billion for a worst-case-scenario (WCS) oil pipeline spill in the heart of the Great Lakes.  

FLOW’s 2018 commissioned economic impact report (released in May 2018) — conducted by a nationally respected ecological economist and based on conservative assumptions — estimates $697.5 million in costs for natural resource damages and restoration and more than $5.6 billion in total economic impacts, including:

  • $4.8 billion in economic impacts to the tourism economy;
  • $61 million in economic impacts to commercial fishing;
  • $233 million in economic impacts to municipal water systems;
  • over $485 million in economic impacts to coastal property values.

Our FLOW team attended and testified at the state’s presentation this past Monday, on August 13, 2018, held at Boyne Highlands, and it was the first honest conversation between the state and citizens in a public forum about the real risk Line 5 poses to our waters and our way of life.

A team led by Dr. Guy Meadows of Michigan Technological University presented this independent risk analysis on its 58,000-barrel WCS disaster that would potentially affect 441 miles of Lakes Michigan and Huron shoreline in Wisconsin, Michigan, and Ontario. The Risk Analysis examined impacts to public health, drinking water, cultural resources, tourism, property values, natural resources, and economy. The report’s final section analyzed perceived risk and the social license to operate based on public opinion. To do this, the report reviewed the 45,000 comments submitted in December 2017 on Dynamic Risk’s Alternative Report, and found an overwhelming 80 percent of commentators opposed to Line 5. The reasons articulated by the opposition were grounded in sound science and law, according to Dr. Meadow’s team.

Although the dollar figures are different due to methodologies and assumptions, what the FLOW-commissioned MSU economic impact report and the state’s report demonstrate is this: Line 5 poses an unacceptable risk to the Great Lakes and the State of Michigan. Period.

The risk and potential harm unfairly burdens the citizens, businesses, and tribes of Michigan, and the freshwaters of the Great Lakes. A spill from Enbridge’s Line 5 could contaminate nearby municipal drinking water intakes, devastate some of the commercial, recreational, and tribal fisheries of the Great Lakes, kill aquatic and terrestrial wildlife, impair critical ecosystem services, diminish coastal property values, and tarnish the image of the state of Michigan and perceptions of its high levels of ecological integrity. Even bigger impacts would damage Michigan’s critical tourism industry.

The state’s risk analysis is yet another compelling reason for the state to take swift action to shut down Line 5.