Tag: Enbridge

FLOW, City of Mackinac Island Join Legal Fight on Invalidity of Existing Line 5 and Proposed Oil Tunnel under Great Lakes

Court accepts amicus briefs supporting enforcement of State of Michigan public trust duties in Enbridge’s lawsuit

Jim Olson, President and Founder

By Jim Olson

The Michigan Court of Claims has issued orders accepting FLOW’s and the City of Mackinac Island’s amicus briefs advancing key legal arguments in Enbridge’s Line 5 oil tunnel lawsuit against the State, rejecting opposing arguments by the Canadian oil pipeline company.

The ruling in Lansing by Judge Michael Kelly in late September means that vital issues raised by FLOW’s brief and the city’s brief will be considered by the Michigan Court of Claims, including the public trust rights of citizens to draw drinking water from and otherwise use the Great Lakes, and the soils and bottomlands beneath them, unimpaired by private interests.

FLOW’s Amicus Curiae Brief  was prepared and submitted by Great Lakes environmental and public trust law experts Jeff Hyman, senior staff attorney at the Conservation Law Center in Bloomington, Indiana, and FLOW’s president and legal advisor Jim Olson. The brief traces the history of the public trust doctrine in Michigan and demonstrates the failure of Enbridge and the State to make the determinations required for authorization of the occupancy and use of waters and soils beneath the Great Lake by a private corporation under public trust law and the Michigan’s Great Lakes Submerged Lands Act (GLSLA).

“This is an important step in restoring the rule of law on Line 5,” said FLOW executive director Liz Kirkwood. “The Great Lakes belong to all of us and cannot simply be handed over to a private corporation through a hurried backroom deal by a lame-duck legislature. If Enbridge really wants a tunnel, it will have to apply under state law and demonstrate no potential risk of adverse impacts and no other alternative pipelines to transport crude oil that avoids the Great Lakes.”

Background on Amicus Briefs

On Sept. 10, FLOW filed a motion to submit an amicus brief before the Court of Claims in Enbridge v. Michigan on important questions involving violations of the public trust doctrine. FLOW noted that the future of the public trust rights of citizens and communities in the Great Lakes were violated by the 2018 “lame duck” agreements that would have contracted away the legally required review of impacts of a tunnel pipeline to the Great Lakes, fishing, drinking water, health, and the economy imposed by the constitution and law of Michigan.

In Michigan, people, organizations, and communities have a right as beneficiaries of the public trust in the Great Lakes to demand that government apply the rule of law. Where this interest would be seriously affected by the questions presented in a pending lawsuit, citizens and local governments may motion the court to file an amicus curiae brief—“friend of the court” written arguments submitted to aid the court regarding the questions and how the law should be applied.

The City of Mackinac Island, meanwhile, filed a motion and amicus brief submitted by Traverse City environmental attorneys Scott Howard and Rebecca Millican. The arguments in the city’s brief pinpointed for the Court the grave consequences to the city’s drinking water source, emergency and health services, ferry services, and tourist economy, in addition to the wellbeing of guests and residents from the continued operation of the decaying Line 5 oil pipelines in the Straits. The city’s amicus brief focuses on the invalidity of the 2018 agreements between the State and Enbridge, which purported to grant Enbridge the right to continue using and occupying the waters and soils of the Great Lakes without any authorization under the public trust or GLSLA requirements.

FLOW’s position remains that the attempt by the Snyder administration to allow Enbridge to continue operating the existing perilous Line 5 in the Straits while Enbridge spends 5 to 10 years or more designing, obtaining required authorizations under public trust law and constructing a tunnel is not a solution. An oil pipeline tunnel 10 years or more down the road does not address Line 5’s immediate threat of massive harm to the Great Lakes nor address the risk posed by the pipeline’s more than 400 stream and river crossings in the Upper and Lower Peninsulas. In addition, Enbridge’s proposal to allow electrical lines and other infrastructure to occupy the proposed oil pipeline tunnel poses an explosion risk. Oral arguments in the case have not been scheduled, so stay tuned to FLOW’s website and Facebook for periodic updates. At stake are the integrity of the State of Michigan constitution, state law, public trust doctrine, and protection of the Great Lakes, public health, and the rights of its citizen to use their public waters.

Lame-Duck Disaster and Side Deals

In December 2018, at the 11th hour of his term, then-Governor Rick Snyder and his department heads of the Department of Natural Resources (DNR) and Department of Environmental Quality (DEQ)—now Department of Environment, Great Lakes, and Energy (EGLE)—signed tunnel agreements by-passing the public trust doctrine  and Great Lakes submerged lands law that expressly control agreements for private occupancy and use of the waters and bottomlands of the Great Lakes.

To expedite the tunnel deal before the end of the year, the Governor and Enbridge solicited the help of the lame duck legislature to push through Act 359. That tunnel law amended the Mackinac Bridge Authority’s enabling legislation and created a new authority called the Mackinac Straits Corridor Authority to cede the state’s public trust bottomlands and waters to Canada’s Enbridge.

In late December, the state DNR and DEQ, along with the Corridor Authority signed a series of agreements, including an easement, that illegally assigned the use of the public trust soils under the Great Lakes to Enbridge to locate, build, and operate a new oil tunnel for Line 5 under the Straits.

Separately, but related, Governor Snyder, DNR, and DEQ entered into a “third agreement” that sought to assure Enbridge the right to continue indefinitely the use of the bottomlands of the Straits for the existing 66-year-old Line 5 oil pipelines. Polls and public testimony show that much of public agrees the cracked and sagging pipelines must be removed as soon as possible. With its failing design, Line 5 poses an unacceptable risk of catastrophic harm to fishing, navigation, drinking water, swimming, boating, health and emergency services, Tribal rights, the ecosystem, property values, municipal infrastructure, tourism, and even the steel industry. The attempt to assure Enbridge continued use of the existing Line 5 was unlawful and grossly serious breach of the State’s duty to protect the Great Lakes.

New Leaders Apply the Rule of Law to Line 5

In early January 2019, newly elected Governor Gretchen Whitmer exercised her executive authority under the state constitution, and requested Attorney General Dana Nessel to issue a formal legal opinion on the constitutionality of Act 359 and the validity of the series of the 2018 agreements purporting to turn over the Straits of Mackinac to Enbridge for its tunnel and to continue using the dangerous Line 5. On March 27, Attorney General Nessel ruled that Act 359 and these agreements were unconstitutional, invalid, and unenforceable.

In June, Enbridge filed suit in the Court of Claims in Lansing against the State of Michigan and its departments to resuscitate the oil tunnel deal by seeking a Court order that Act 359 and all of these agreements are constitutional and otherwise valid and enforceable. A.G. Nessel and her staff responded with a motion to dismiss Enbridge’s claim because the law and related agreements are unconstitutional and violate the public trust in the waters of the Great Lakes and the soils beneath them. Enbridge responded that the law was within the powers of the legislature, and that the agreements complied with the public trust doctrine.

Underlying Legal Framework

Under the public trust doctrine, the state owns the bottomlands and waters of the Great Lakes in a trust for the protection of these waters, bottomlands, fish, habitat, and for fishing, navigation, drinking water and sanitation, boating, swimming, and other recreational pursuits. The doctrine prohibits the disposition or agreement for occupancy and use of public trust bottomlands by a private person or corporation without an express determination that the disposition falls within one of two narrow exceptions:

  1. The purpose will improve a public trust interest or use—the water, habitat, fish, or one of the protected public uses (such as a public harbor for boating, or public drinking water works, or swimming beach); or
  2. There is no unacceptable risk of impairment to the waters, ecosystem, or these protected public trust uses.

In 1955, Michigan passed the Great Lakes Submerged Lands Act (GLSLA) to protect the public waters and lands beneath the Great Lakes. Under the GLSLA, no one can use, alter, occupy or control the soils and waters of the Great Lakes, unless authorized by the DEQ (now EGLE) after due findings that the public trust interests (e.g. navigation, fishing, drinking water) would be improved or would not be impaired.

When Governor Snyder and his department heads cut the tunnel deal with Enbridge, they contracted away these legal requirements, basically suspending the rule of law in Michigan.

You might say our leaders suspended the law and granted Enbridge an “open season” license to do what it wanted with the public’s paramount trust interests in the Straits of Mackinac. The Governor, DNR, and then-DEQ failed to require Enbridge to apply for legal authorization to continue using the existing Line or the proposed Tunnel under public trust law or the GLSLA.

As of this writing, there has been no such authorization from the State of Michigan allowing Enbridge to own, control, use, or occupy the public soils and waters of the Straits. And FLOW, the city of Mackinac Island, tribes, and citizens of Michigan  aim to keep it that way.

Line 5 Poses On-land Explosion Risk for Michigan Residents

On August 1, a natural gas pipeline operated by an Enbridge subsidiary exploded in Kentucky. The blast killed one person, injured six others, and blew 30 feet of pipeline out of the ground, resulting in a crater that is 50 feet long, 35 feet wide and 13 feet deep. About 66 million cubic feet of natural gas was released by the explosion, with the resulting fire destroying multiple structures and burning vegetation over approximately 30 acres of land.

Although public attention has rightly focused on the risk of a catastrophic oil spill from Enbridge’s Line 5 pipelines at the Straits of Mackinac, FLOW board member Rick Kane points out that the risk of a similar explosion is also possible because of the natural gas liquids (NGLs) running the length of Line 5’s 645-mile transit through Wisconsin and Michigan. Here is Kane’s analysis.

 

Enbridge’s Line 5, a legacy hazardous liquids pipeline, poses a major explosion and fire safety risk to citizens and property along its entire length while it transports natural gas liquids (NGLs). This risk is particularly high for the Line 5 segments north and south of the Straits of Mackinac. Why is this issue not being investigated as part of the proposed tunnel project so that citizens and first responders living along the Line 5 hazard zone know the current risk and likelihood that permitting and replacing the pipeline will pose in the future?

The severe consequences of a Line 5 failure and crude oil release into the Straits have been widely publicized. Construction of a tunnel with a new pipeline is now being pursued as a risk reduction approach against a major crude oil spill disaster. However, a tunnel does not reduce the risks posed by Line 5 across the Upper Peninsula and Lower Peninsula where a rupture could release crude oil into hundreds of lakes, rivers and streams, some even leading to the Great Lakes. Nearly absent from the studies and debate are the threats and catastrophic consequences to human safety and property posed by Line 5 while it transports NGLs.

FLOW highlighted the NGL risks in 2018. The risk was on display on August 1 when a large legacy natural gas pipeline in Kentucky exploded, causing one death and sending five residents to the hospital. Unfortunately, the Kentucky incident is only one of many in recent history.

Pipelines are the safest transportation mode for crude oil, NGLs and especially natural gas. However, there are a wide range of pipeline design specifications, materials transported, pipeline ages, physical conditions and operating environments. Line 5 is a legacy pipeline, well past its designed retirement age, operating in an extremely sensitive environment and transiting through several populated areas. Unlike wine, a vintage pipeline does not get better with age; government and industry statistics show that failure rates increase dramatically for legacy-class pipelines. Several major incidents in recent years call into question the reliability of pipeline industry failure prevention programs to justify the continued operation of these pipelines.

A Line 5 failure during the transport of NGLs could have consequences beyond the Kentucky failure and other too-typical natural gas pipeline failures:

  • Natural gas (methane) is transported as a compressed gas. The NGLs in Line 5 are mostly propane with some ethane and butane that are gases compressed to a liquid state when transported by pipeline.
  • When a natural gas pipeline failure occurs, a rapidly, vertically expanding gas cloud ignites, creating a huge flaming torch. Many people reported that the fire from the Kentucky explosion reached 300 feet high.
  • When an NGLs pipeline fails, liquid is expelled quickly, forming a large vapor cloud that moves with the wind until it finds an ignition source. Then the vapor cloud ignites, and an explosion and fireball occur with a shock wave, flame front and radiative heat wave moving out from the explosion area.
  • The potential energy (explosion and heat) from an NGLs explosion can be much greater than from a natural gas break as NGLs have a higher caloric value and the quantity of energy released can be much higher.
  • The risk study developed by Dynamic Risk Systems, Inc. for the State of Michigan in 2017 contained an NGLs deep water release scenario in the Straits that would result in a flame front of almost one mile. Contrast this with a ground level release upstream or downstream of the Straits where the release quantity could be much higher as the distance between pumping stations and shutoff valves is greater at ground level and near populated areas and valuable property. Computer modeling of potential release scenarios near populated areas would provide estimates of fatalities, property damage and important evacuation zones for law enforcement and first responders.

The Kentucky pipeline explosion is still being investigated but preliminary information indicates that the pipeline is similar in size, age and construction to Line 5. Corrosion is believed to be the cause of the failure, and as in other similar incidents, Enbridge is trumpeting the touted pipeline loss prevention program and the reliability of inspections with “smart pigs” to justify continued operation of legacy pipelines.

 

Issues and Questions   

  • The entirety of Line 5 will need to be replaced at some point if the tunnel project proceeds. Does the State of Michigan understand the risks for transporting NGLs in legacy hazardous liquid pipelines, and have assessments been conducted and verified by third-party experts? Are citizens living in the potential impact zone aware of the risk they face?
  • Do property owners and citizens know that a flurry of permit requests for Line 5 “maintenance replacement” will be issued if the tunnel project is given the green light, as was done with Line 6B/78 after the Kalamazoo River disaster in 2010? A similar piecemeal, preventative maintenance and capacity expansion approach is currently being used on Line 3 in Minnesota—a pipeline with an increasing number of failures that Enbridge says needs to be replaced and is 10 years younger than Line 5.
  • Importantly, emergency response organizations along the Line 5 route should complete pre-modeling of NGLs release scenarios to understand potential explosion overpressure and flame envelops and have evacuation scenarios ready to use. The modeling required is more complex than typically done by first responders for hazardous materials spills; they could underestimate the size of an evacuation zone.
  • The State of Michigan regulates gas pipelines but not hazardous liquid pipelines such as Line 5. Why not? Cost is not the answer: other states have taken on the task after disasters occurred; the cost is covered by inspection and audit fees charged to the pipeline companies. State inspections can supplement and provide local control rather than depending on the overwhelmed federal regulators from Pipeline and Hazardous Materials Safety Administration (PHMSA).
  • What about a “National Emphasis Program” focused on pipeline safety starting with the largest operator, Enbridge? After a spate of major refinery and chemical facility accidents several years ago, the Occupational Safety and Health Administration (OSHA) implemented a National Emphasis Program (NEP) that focused on certain segments of the industry based on risk and accident history. Comprehensive inspections and audits addressed not only regulatory requirements but a company’s adherence to industry standards and requirements applicable through the General Duty Clause.

Accidents will continue as long as the pipeline industry uses its own standards for acceptable levels of pipeline failures and relies on current loss prevention and inspection programs for legacy pipelines. The industry is currently deciding the risk tolerance for citizens. A large NGLs pipeline rupture near a local city or village could happen again, just as Line 6B/78 dumped crude oil into the Kalamazoo River nine years ago.

Rick Kane, FLOW Board Member

Rick is the former Director of Security, Environment, Transportation Safety and Emergency Services for Rhodia, North America.  He is certified in environmental, hazardous materials, and security management, and is a graduate of the University of Michigan and University of Dallas.

Digging a Hole for Future Generations

By 4-3 Vote, Grand Traverse County Commissioners Support ‘Line 5’ Oil Tunnel in the Great Lakes

By Kelly Thayer

After a brief rally outside with many participants wearing black t-shirts saying, “No Line 5 Oil Tunnel,” dozens of people this morning (August 21) overflowed the meeting room and lobby of the Grand Traverse County Board of Commissioners in Traverse City. In all, 54 residents spoke out for the next 2 ½ hours against a resolution supporting a proposed tunnel under the Straits of Mackinac. Only two people — one an owner of a local gas and oil company — spoke for the oil tunnel.

And then the county commissioners had the final say, with the majority ultimately disagreeing with their own constituents and voting 4-3 for the resolution. (Click here to view a video of the meeting.)

The outcome was disheartening to many in attendance who spoke of Enbridge’s spill-laden track record and the risk to the Great Lakes, drinking water, the economy, tribal rights, the climate, and a way of life that could be denied to future generations.

“It’s not a good pipeline. And for all the reasons already said, it needs to be shut down. And so promoting the life of it isn’t exactly helpful for my generation, or generations that come after me – or your generation! It’s not good for our water, it’s not good for our state, it’s not good for the world! So just consider that, please,” said Kellyn Walker Hundley, a teenager who attended and also is the daughter of Commissioner Bryce Hundley, an opponent of the resolution.

The pro-tunnel result delivered a boost for Enbridge, which didn’t comment at the meeting, but instead is letting its money do the talking by spending heavily on public relations and lobbying to gain support among counties statewide for their proposed oil tunnel. Only three other counties — all in the Upper Peninsula — to date have approved the model resolution that bears close resemblance to talking points that Line 5-owner Enbridge has circulated for months.

The Canadian energy transport giant’s goal is to build political backing for a tunnel as a replacement for its decaying oil pipelines crossing the open waters and bottomlands of the Straits of Mackinac, where Lake Michigan meets Lake Huron. Enbridge thought it had secured the oil tunnel in late 2018, when Michigan lawmakers rushed through a bill in lame-duck session. In March, however, newly elected Attorney General Dana Nessel found that the oil tunnel legislation to be unconstitutional.

Enbridge sued the State of Michigan in early June to resuscitate the law, and the multibillion-dollar company also is working with the Republican majority, as well as some Democrats, in the state House and Senate to introduce a new oil tunnel bill as early as this month to overcome the flaws flagged by Nessel. Nessel in late June also sued Enbridge to revoke the 1953 easement that conditionally authorizes Enbridge to pump oil through the twin pipelines in the Straits.

FLOW and its team of lawyers, scientists, engineers, and an international risk expert since 2013 have studied the increasing threat from Line 5 in the Straits of Mackinac and, more recently, the proposed Line 5 oil tunnel.

FLOW Deputy Director Kelly Thayer read a statement calling on the county board to reject the oil tunnel resolution, which claims an admirable safety record that is at odds with the reality that Line 5 has leaked at least 33 times, spilling a total of 1.1 million gallons of oil in Michigan and Wisconsin.

“It is vital to understand that with a ‘yes’ vote today for the oil tunnel resolution, you would effectively be interfering in ongoing litigation between Enbridge and the State of Michigan,” Thayer said. “Why entangle Grand Traverse County in these legal fights on Enbridge’s behalf?”

Enbridge wants the right to bore a tunnel in the next 5-10 years for Line 5 through State of Michigan public trust bottomlands under the Straits. Enbridge also wants to keep pumping up to 23 million gallons of oil and natural gas liquids a day through the decaying, 66-year-old Line 5 pipelines in the Straits during tunnel feasibility studies and construction.

An oil tunnel also would fail to address the risk posed by Line 5’s more than 400 stream and river crossings in the Upper and Lower Peninsulas and would conflict with Michigan Gov. Gretchen Whitmer’s plans to combat ongoing climate change.

FLOW and other Great Lakes advocates have long called for shutting down Line 5, which primarily serves Canada’s, not Michigan’s, needs and threatens the Great Lakes. FLOW research shows that viable alternatives exist to deliver propane to Michigan and oil to regional refineries, and Gov. Whitmer has formed an Upper Peninsula Energy Task Force to identify energy supply options. The system can adjust with smart planning.

You can learn more by visiting FLOW’s Line 5 program page and by downloading a copy of FLOW’s latest:

Kelly Thayer is FLOW’s Deputy Director

No ‘Line 5’ Oil Tunnel in the Great Lakes!

Photo: FLOW Deputy Director Kelly Thayer speaks to the Grand Traverse County Board in opposition to a pro-oil tunnel resolution.


By Kelly Thayer

Confronted at 8 a.m. on a Wednesday by a full audience passionately and unanimously against a proposed Line 5 oil tunnel in the Straits of Mackinac, the Grand Traverse County Board of Commissioners voted today to temporarily table a misguided and error-filled resolution supporting the oil tunnel. (Click here to view a video of the meeting, once posted by the county).

Some commissioners also could be heard chatting among themselves before the meeting about the voluminous amount of emailed comments against the oil tunnel that they also received in the hours leading up to the session, as local citizen groups spread the word of the pending vote.

While the outcome was received as a temporary victory in the moment by many in attendance, vigilance still is required. The resolution, which had been expected to gain quick approval, will likely come back for reconsideration — perhaps at a tentatively scheduled 8 a.m., August 14, study session — and then a possible vote at the Grand Traverse County Board’s next regular meeting at 8 a.m. on Wednesday, August 21, at the Governmental Center at 400 Boardman Ave. in Traverse City.

“I was elected to work for the public interest and the people of Grand Traverse County, not the bottom line of a foreign oil company with a troubling safety record and equally troubling transparency practices,” said Commissioner Betsy Coffia after the meeting, who was prepared to oppose the symbolic resolution. “Enbridge pays a lot of lobbyists and lawyers to carry water for them. I don’t think it’s the job of the Grand Traverse County Commission to do that work for them.”

Only one county in Michigan—Dickinson in the Upper Peninsula—to date has approved the model resolution that bears close resemblance to talking points that Line 5-owner Enbridge has circulated for many months. The resolution tabled by Grand Traverse County Commissioners proposes to send “this resolution to all counties of Michigan as an invitation to join in expressing support” for the oil tunnel owned by Canadian-based Enbridge.

Dozens of people representing themselves, families, Indian tribes, businesses, environmental groups, and others attended and many spoke up against the oil tunnel and for protection of the Great Lakes, drinking water, public trust and tribal rights, and the Pure Michigan tourist economy.

FLOW and its team of lawyers, scientists, engineers, and an international risk expert since 2013 have studied the increasing threat from Line 5 in the Straits of Mackinac and, more recently, the proposed Line 5 oil tunnel.

FLOW Deputy Director Kelly Thayer read a statement calling on the county board to reject the oil tunnel resolution, which in its first sentence, incorrectly states the age of the decaying pipeline and claims an admirable safety record that is at odds with the reality that Line 5 has leaked at least 33 times, spilling a total of 1.1 million gallons of oil in Michigan and Wisconsin.

“It is critical for the Grand Traverse Board of County Commissioners to understand that—with the proposed resolution in your packet—the Board is being asked to interfere in ongoing litigation between the State of Michigan and Enbridge,” Thayer said. “In addition, there are at least four other active lawsuits against Enbridge and Line 5. Therefore, this type of resolution is misguided and not in Grand Traverse County’s, nor the public, interest.”

In March, Michigan Attorney General Dana Nessel found that the tunnel bill that became law was unconstitutional. In early June, Enbridge sued the State of Michigan to resuscitate the tunnel legislation. And in late June, the State of Michigan sued Enbridge to revoke the 1953 easement that conditionally authorized Enbridge to pump oil through the twin pipelines.

Attorney General Nessel’s lawsuit alleges that Enbridge’s continued operation of Line 5 in the Straits violates the Public Trust Doctrine, is a common law public nuisance, and violates the Michigan Environmental Protection Act based on potential pollution, impairment, and destruction of water and other natural resources.

“Why would the current Grand Traverse County Board, which—to our knowledge—has never studied nor discussed the threat from Line 5, take a leap of faith in supporting a Canadian oil pipeline company’s alternative that diverts attention from the real problem—the bent, cracked, and encrusted oil pipelines in the Straits?,” Thayer asked.

Enbridge wants the right to bore a tunnel in the next 5-10 years for Line 5 through State of Michigan public trust bottomlands under the Straits, where Lake Michigan meets Lake Huron.

Enbridge also wants to keep pumping up to 23 million gallons of oil and natural gas liquids a day through the decaying, 66-year-old Line 5 pipelines in the Straits during tunnel feasibility studies and construction. An oil tunnel also would fail to address the risk posed by Line 5’s more than 400 stream and river crossings in the Upper and Lower Peninsulas and would conflict with Michigan Gov. Gretchen Whitmer’s plans to combat climate change.

The City of Mackinac Island, Grand Traverse Band of Ottawa and Chippewa Indians, and the Straits of Mackinac Alliance citizen group also have filed a contested case challenging Enbridge’s claim that installing hundreds of anchor supports to shore up the decaying Line 5 is mere maintenance, rather than a major redesign requiring an application and alternatives analysis under the 1955 Great Lakes Submerged Lands Act (GLSLA) and public trust law that apply to the soils and waters of the Great Lakes. Line 5-related lawsuits against the U.S. Coast Guard and against Enbridge in Wisconsin also continue.

FLOW and other Great Lakes advocates have long called for shutting down Line 5, which primarily serves Canada’s, not Michigan’s, needs and threatens the Great Lakes. FLOW research shows that viable alternatives exist to deliver propane to Michigan and oil to regional refineries, and Gov. Whitmer has formed an Upper Peninsula Energy Task Force to identify energy supply options. The system can adjust with smart planning.

You can learn more by visiting FLOW’s Line 5 program page and by downloading a copy of FLOW’s latest:

And you can contact the Grand Traverse County Board of Commissioners here:

  • Rob Hentschel, chair, rhentschel@grandtraverse.org or 231-946-4277
  • Ron Clous, vice chair, rclous@grandtraverse.org or 231-590-3316
  • Brad Jewett (introduced the pro-tunnel resolution) bjewett@grandtraverse.org or 231-633-9421
  • Betsy Coffia, bcoffia@grandtraverse.org or 231-714-9598
  • Bryce Hundley, bhundley@grandtraverse.org or 231-753-8602
  • Gordie LaPointe, glapointe@grandtraverse.org or 231-409-2607
  • Sonny Wheelock, swheelock@grandtraverse.org or 231-947-3277

Attorney General Nessel, Governor Whitmer Take Bold Legal Actions to Shut Down Line 5 and Apply Rule of Law

Today represents a historic turning point for all Michiganders. Attorney General (AG) Dana Nessel took decisive legal action on Pipeline 5 in the Straits of Mackinac when she filed suit in Ingham County Circuit Court to revoke the 1953 Easement that conditionally authorized Enbridge to pump oil through twin pipelines.

Nessel’s lawsuit alleges that Enbridge’s continued operation of the Straits Pipelines violates the Public Trust Doctrine, is a common law public nuisance, and violates the Michigan Environmental Protection Act because it is likely to cause pollution, impairment, and destruction of water and other natural resources. Simultaneously, Governor Whitmer and the natural resources and environmental protection agencies have taken action through the AG to dismiss Enbridge’s June 6 lawsuit to defend the public’s rights and waters of the Great Lakes. 

“I have consistently stated that Enbridge’s pipelines in the Straits need to be shut down as soon as possible because they present an unacceptable risk to the Great Lakes,” said the Attorney General. “Governor Whitmer tried her best to reach an agreement that would remove the pipelines from the Straits on an expedited basis, but Enbridge walked away from negotiations and instead filed a lawsuit against the state. Once that occurred, there was no need for further delay.”

Gov. Gretchen Whitmer also ordered the Michigan Department of Natural Resources to review violations of the Line 5 easement. As the state’s top leader and public trustee, Whitmer has the express legal authority to revoke the easement to start decommissioning the pipeline.

“The governor’s primary goal has always been and remains to get the Line 5 dual pipelines out of the Straits of Mackinac as soon as possible,” said Whitmer’s press secretary Tiffany Brown today in a statement. “The risk of a catastrophic oil spill in the Great Lakes, and the harm that would follow to Michigan’s economy, tourism, and our way of life, is far too great to allow the pipelines to continue to operate indefinitely. As a recent National Transportation Safety Board report documented, any doubt as to the risk posed by Line 5 was erased in April 2018 when a barge dragging a 12,000-pound anchor nearly caused disaster.” 

FLOW (For Love of Water) commends Attorney General Nessel’s and Governor Whitmer’s legal actions against Enbridge. It’s about time Michigan’s government is standing up for our public waters — waters located in arguably the worst possible place in the Great Lakes for an oil spill to happen.

“Today, Attorney General Nessel returns Michigan and the protection of its citizens, taxpayers, and the Great Lakes to the rule of law,” said Jim Olson, president and founder of FLOW. “Governor Whitmer’s action on behalf of the state to nullify the lame-duck tunnel agreements also returns Michigan to the rule of law. They should be thanked. No, they should be applauded.”

Nessel’s move comes three weeks after Enbridge sued the State of Michigan on June 6 to claim its right to continue operating Line 5 and to build and operate a tunnel under the Great Lakes for the next 99 years. It comes just over six months after former Governor Snyder, former Attorney General Schuette and lawmakers gifted Enbridge a one-sided law and set of agreements during their last days in office that handed control of Great Lakes waters and soils beneath the Straits of Mackinac to a private Canadian company for its private gain.

Act 359 and the agreements during the 2018 lame-duck session were designed to allow Enbridge to continue the dangerous and unacceptably grave risks of a failing Line 5 design until the company builds a tunnel to lease for the next 99 years, with massive potential liabilities for the State and citizen taxpayers.

“The deal was approved by a lame-duck session law that was based on dubious constitutional and legal grounds, and sought to suspend the rule of law in Michigan, binding citizens and the state to the control of part of the Great Lakes for the next century,” said Olson. “The Snyder administration helped Enbridge run around our state constitution and evade the rule of law that protects the public’s ownership and rights in the Great Lakes.”

 

New year, new administration

After taking office on Jan. 1, Governor Whitmer’s first move was to direct Attorney General Nessel to examine the legality of the lame-duck tunnel deal. AG Nessel ruled in March that Act 359 violated Michigan law and openly violated the state constitution. Whitmer quickly ordered the executive branch to adhere to Nessel’s opinion, preventing the implementation by state agencies of the unlawful deal.

On June 6, Enbridge reacted by filing a lawsuit against the State in an attempt to resuscitate the lame-duck law and agreements, claiming easements and the right to continue using the existing Line 5 in the Straits indefinitely—or until it gets a 99-year tunnel and new pipeline to transport crude oil from Alberta and through Michigan into Ontario.

The Attorney General telegraphed her decision to stand with the Great Lakes. At the Mackinac Policy Conference in late May she told WWMT-TV in West Michigan, “I’m tired of it and we can’t have a private company be more important than the natural resources and residents of our state. They don’t own us, they don’t own the natural resources in this state and I think it’s time that we had elected leaders in office that recognize that.”

On the campaign trail in 2018, Nessel ran on a message to shut down Line 5.

“No state can cede the Great Lakes or soils under them to a person or private corporation,” said Olson. “These lakes and the soils under them are held in public trust for fishing, boating, drinking water, recreation, bathing, swimming for all citizens. This trust cannot be suspended by private agreements. The use of these trust waters and soils can only be authorized under law with transparent findings that there is no private deal or gain and no risk of impairment of current and future generations.”

 

Pure Michigan

Our freshwater seas are of paramount importance to Michiganders, and citizens throughout the Great Lakes basin. They uphold our economy and represent our very way of life. According to the Great Lakes Commission, Michigan has more than 3,000 miles of freshwater coastline and 11,000 inland lakes that provide residents, businesses, and visitors with access to nearly 20 percent of the world’s surface freshwater. More than 800,000 Michigan jobs and $62 billion in resulting annual wages are directly linked to the Great Lakes. 

An oil spill in the turbulent Straits of Mackinac between Lakes Michigan and Huron, where the currents create a washing machine effect, could jeopardize all that we are as Michiganders.

“This is a watershed moment in the battle to decommission Line 5, prevent a catastrophic oil spill, and protect the Great Lakes, an economic engine for our state and the source of drinking water for millions,” said FLOW executive director Liz Kirkwood.Attorney General Nessel and Governor Whitmer made strong campaign promises to shut down Line 5, and now our elected leaders are making good on their commitment to protect the Great Lakes.” 

Reactions from local leaders — both in city hall and in the private sector — were strong.

“Shutting down Line 5 is a priority to those in northern Michigan who rely on the economic benefits of the natural resources we have in our Great Lakes,” said Traverse City Mayor Jim Carruthers. “Our Attorney General is right for supporting the immediate shut down of this aging Enbridge Pipeline under our Straits, to ward off the devastating effects of a breach that will destroy all that is important to life ‘up north’. As the mayor of Traverse City, I wholeheartedly support these actions to protect the waters around my city for all to enjoy and benefit from.”

Business owners like Brian Schwartz of eightyfive MILES, a lifestyle apparel and accessory brand company, reflected on the economic value and significance of the Great Lakes.

“I am the owner of a Great Lakes’ inspired start-up and former hedge manager, and I don’t see Enbridge’s enthusiasm or desire to fund a $500 million tunnel project,” he said. “We believe it’s a faulty plan and the time is now to shut down Line 5. We support Attorney General Dana Nessel in the State’s battle to shut down this aging pipeline. Our company contributes a share of revenues to support Great Lakes’ conservation and it would be an ecological disaster and economic catastrophe to Michigan if the pipe were to burst. There’s no need to put the State’s livelihood and environment at risk.”

 

Deception campaign

“Despite the posturing and rhetoric of Enbridge’s media scheme, there are alternatives to the existing Line 5 that do not require a tunnel,” said Olson. “These include delivering propane for those pockets of customers in the Upper Peninsula, and the use of excess capacity in other Enbridge lines that run across southern Michigan and northern Indiana to Canada and Detroit. We don’t need a 99-year tunnel and pipeline in light of plummeting demand for crude oil as the world economy rapidly shifts to renewable energy.”

“The Enbridge lawsuit is a diversion from the reality that the 540,000 barrels of oil are pulsating through a 66-year old pipeline, which is peppered with design flaws, gouges, corrosion, and unavoidably threatened with another anchor strike at any time.”

Enbridge has failed to prove itself as a trustworthy and transparent partner. Time and time again, Enbridge has withheld information, attempting to hide Line 5’s design flaws, pipeline coating, cracks, gouges, corrosion, and the April 1, 2018 anchor strike that nearly caused a calamitous spill, anchor strikes, and more. Enbridge’s operational track record is dismal. Its Line 6B Kalamazoo River disaster in 2010, one of the largest inland oil spills in U.S. history, cost $1.3 billion in damages. Line 5 has suffered 33 known spills, leaking approximately 1.1 million gallons of oil into Michigan’s environment.

An increasingly desperate Enbridge is enlisting allies to engage in what can only be deemed a deceitful Chicken Little campaign. The Canadian company wildly alleges that “shutting down Line 5, even temporarily, would mean lost union jobs, refinery closures, gas price spikes and greater harm to the regional economy every year.” The campaign is designed to scare officials into giving the company what it wants — a 99-year lease to use the people’s waters and lakebed to transport refined dirty tar sands oil from western Canada primarily to Sarnia, Ontario.

Enbridge makes the absurd claim that the PBF refinery in Toledo, Ohio, would lose a thousand jobs if Line 5 is shut down. But that directly contradicts statements PBF says in its own investor filings, as well as reports from market analysts, emphasizing the refinery has several sources of supply and can adjust them depending on market conditions. PBF also claims that 40% of the jet fuel used at Detroit Metropolitan Airport comes from refined Line 5 petroleum. But PBF and the Marathon Detroit refineries appear to supply only about 9% of the jet fuel used at the airport each day. Alternative pipeline sources can more than make that up. Impacts of a Line 5 shutdown on Metro Airport jet fuel have never before been raised as an issue in the Line 5 debate or when Line 6B ruptured and closed in 2010. Its introduction at the 11th hour after more than five years of controversy over the fate of Line 5 is a transparent effort to alarm the public.

Enbridge has alternatives within its pipeline system to meet all of its and Michigan’s needs without using the Mackinac Straits and the Great Lakes. There are several good solutions to assure continued delivery of propane to rural areas in the Upper Peninsula. It may even save Enbridge and its shareholders from shouldering a future stranded asset, as the need for Alberta crude oil, including through Line 5, will plummet in the next decade with the rise of the new renewable energy economy backed by public demand.

Enbridge has a track record of misleading the public and governments about its performance, and its recent efforts are consistent with the company’s apparent philosophy of saying anything to keep Line 5 petroleum — and profits — flowing.

FLOW applauds Michigan’s top leaders — Gov. Whitmer and AG Nessel — for their leadership in defending the people’s rights and public waters of the Great Lakes.

Fact Check: When Line 5 Shuts Down, Detroit Jets Will Still Fly and Union Refinery Jobs Will Still Exist

As the time for the State of Michigan to take action on Line 5 at the Straits of Mackinac approaches, an increasingly desperate Enbridge is enlisting allies to engage in what can only be deemed a deceitful Chicken Little campaign. Behold, for example, Enbridge’s full-page advertisement Wednesday in the Traverse City Record-Eagle, which wildly alleges that “Shutting down Line 5, even temporarily, would mean lost union jobs, refinery closures, gas price spikes and greater harm to the regional economy every year.”

The campaign is designed to scare officials into giving the company what it wants — a 99-year lease to use the people’s waters and lakebed to transport dirty tar sands oil from western Canada primarily to Sarnia, Ontario.

The latest and one of the most outrageous fabrications regarding the impact of a Line 5 shutdown emerged last week from management of the PBF refinery in Toledo, Ohio. No doubt at Enbridge’s behest, PBF warned of a refinery shutdown and loss of a thousand jobs if the supply provided by Line 5 is no longer available. The Toledo refinery, PBF suggested, has no other source of petroleum.

This assertion is absurd on its face — What kind of refinery management would leave itself vulnerable by receiving crude from only one source? — but also directly contradicts statements PBF says in its own investor filings, as well as reports from market analysts. They emphasize the PBF refinery has several sources of supply and can adjust them depending on market conditions.

“The [PBF] refinery only processes light/medium and sweet crude and gets most of its WTI crude through pipeline from Canada, the mid-Continent, the Bakken region and the U.S. Gulf Coast,” an analyst says.  Another credits PBF with using “its complex crude processing capacity to source the lowest cost input.”  PBF says in its 2016 filing with the Securities and Exchange Commission that crude is delivered to its facility through three primary pipelines, Line 5 from the north, Capline from the south, and Mid-Valley from the south. Crude is also delivered to a nearby terminal by rail and from local sources by a truck to truck unloading facility in the refinery property.

The fact is that multiple alternative pipelines, rail and truck sources are and will be available to enable PBF to continue refining petroleum as it is today. No evidence points to job loss in Toledo from a Line 5 shutdown. And PBF itself said in a September 2017 news story challenging EPA regulations because of alleged job losses that the Toledo refinery employed 550, not 1,000 workers.

Exploiting worker and community fears with bogus claims is the latest in a series of unconscionable tactics deployed by Enbridge to pressure Michigan officials into letting the company occupy the Straits with its current antiquated pipeline and later, a tunnel under the lakebed.

In another last-gasp attempt to distort decision-making and alarm the public, PBF claims the (nonexistent) Toledo refinery shutdown will seriously impinge on the supply of jet fuel at Detroit Metropolitan Airport, driving up fares or reducing flights, or both. The claim is that 40% of the jet fuel used at the airport comes from refined Line 5 petroleum. But PBF and the Marathon Detroit refineries appear to supply only about 9% of the jet fuel used at the airport each day, and again alternative pipeline sources can more than make that up.

It is worth noting that impacts of a Line 5 shutdown on Metro Airport jet fuel have never before been raised as an issue in the Line 5 debate or when Line 6B ruptured and was closed down in 2010. Its introduction at the 11th hour after more than five years of controversy over the fate of Line 5 is a transparent effort to alarm the public with false information and bring pressure on state officials.

Enbridge has a track record of misleading the public and governments about its performance, and its recent efforts are consistent with the company’s apparent philosophy of saying anything to keep Line 5 petroleum — and profits — flowing.

 

Key Facts, in a Nutshell

 

Jobs, let’s talk jobs! 

Continuing to operate the decaying Line 5 risks jobs. Many jobs. Shutting down Line 5 will protect hundreds of thousands of jobs in Michigan’s tourism economy.

According to a FLOW report in May 2018, direct spending by tourists supports approximately 221,420 jobs, and the total tourism economy in 2016, including direct, indirect and induced impacts, supported 337,490 jobs—approximately 6.1% of total employment in Michigan.

 

Toledo PBF Refinery 

  • Enbridge’s and fossil-fuel industry allies have a track record of false and unsubstantiated claims and lack of transparency.
  • The numbers are inflated:
  • Enbridge and refineries and some politicians are misleading the public. They falsely claim that the 2 Toledo refineries and 1 Detroit refinery, and by extension the jobs there, are fully and wholly dependent on Line 5, including a large number of jobs at these refineries. The refineries supposedly affected are: Marathon – Detroit; BP-Husky-Toledo – which carries no Line 5 feedstock because it’s a tar sands refinery that takes feedstock from Line 78 (formerly Line 6B), and PBF-Toledo.  PBF states in its 2018 annual report for stockholders that it “processes a slate of light crude oils from Canada, the Mid-continent and the U.S. Gulf Coast.”
  • The refineries rely on multiple pipelines and suppliers, and they say so in writing.
  • Marathon refinery primarily uses dilbit, which Line 5 doesn’t currently carry.

 

Detroit Metro Airport

  • In a letter to Michigan Governor Gretchen Whitmer, Ohio Governor Mike DeWine claimed, “our refineries supply the majority of aviation fuels to Detroit Metro Airport” and asserted shutdown of Line 5 would lead to airline schedule disruptions.
  • But 2020 jet fuel consumption at Detroit Metro will total 1,658,000 gallons per day, according to a 2010 estimate by the airport. Based on numbers published by PBF, BP Husky and Marathon Refineries, Line 5 appears to supply only about 10% of the jet fuel at Detroit Metro Airport, not 40% as claimed by Ohio Gov. DeWine. Both Marathon and PBF have other crude oil sources, and therefore other pipelines could provide feedstock to satisfy regional jet fuel needs. Alternatively, other nearby refineries in Illinois, Indiana and Ohio could make up this shortfall.

 

Bottom line: Shutting down Line 5 will protect hundreds of thousands of jobs. A Line 5 shutdown would not significantly impact jobs at Toledo refineries. There is absolutely no evidence that a shutdown would impair operations at Detroit Metro Airport.

 

Sources:

Marathon 2019 total capacity:  140,000 bpd https://www.marathonpetroleum.com/Operations/Refining/Detroit-Refinery/

Increase of Heavy Crude to 115,000 bpd https://www.myplainview.com/news/article/Marathon-refinery-seeks-support-for-second-8578737.php                           

https://www.ogj.com/general-interest/companies/article/17286350/marathon-to-upgrade-expand-detroit-refinery

BP Husky capacity and crude feed: https://www.hydrocarbons-technology.com/projects/bp-husky/

PBF Capacity: 170,000 bpd https://investors.pbfenergy.com/~/media/Files/P/PBF-Energy-IR-V2/documents/annual-reports-and-proxy/pbf-energy-2018-annual-report.pdf

PBF Truck terminal at Toledo:  22,500 bpd; https://www.pbflogistics.com/~/media/Files/P/PBF-Logistics-IR-V2/reports-and-presentations/20190514-pbfx-may.pdf (Appendix)

Jet Fuel Consumed per day at DTW: https://www.metroairport.com/sites/default/files/business_documents/masterplans_2009archive/04_-_demand_capacity_facility_requirements_2-16-10.pdf

 

An earlier version of this blog inadvertently reported that jet fuel consumption at Detroit Metro totals 1,658,000 barrels per day. 1,658,000 gallons is the correct amount.

Actress Amy Smart and writer and producer Geoff Johns urge Michigan Gov. Whitmer to protect our Great Lakes and shut down ‘Line 5’

 


Actress Amy Smart and comic book writer, screenwriter, and film and television producer Geoff Johns urge Michigan Governor Gretchen Whitmer to protect our Great Lakes and shut down Enbridge’s Line 5 oil pipeline in the Straits of Mackinac, where Lake Michigan meets Lake Huron.


Amy: Hi, I’m Amy Smart.

Geoff: Hi, I’m Geoff Johns.

Amy: And we’re here to urge you, Governor Whitmer. We’re so excited that you are the governor of Michigan, and we’re so excited that you believe in the Great Lakes and keeping them clean. We both grew up — you grew up in Michigan.

Geoff: I grew up in Michigan. I have a lot of family still in Michigan. I love Michigan, and Michigan is known for its lakes. It’s the Great Lakes State, and there is nothing more important than those lakes to the whole state and the people in it.

Amy: Yes, nothing more important. I now am a resident of Michigan, and we really need your leadership more than anything to shut down Pipeline 5. It’s way too risky, and it would be completely catastrophic if anything happened, so it’s urgent right now that you do that. We also would highly recommend not letting Enbridge build a tunnel because we don’t need any oil problems in our lakes at all.

Geoff: We don’t want to risk it, and we know you’re in a really tough situation right now, but we ask you to please use your judgment and make the right call. Thank you!

Amy: Thank you!


‘Line 5’ Threat to Great Lakes Won’t Be Solved By Proposed Anchor Rules

Let’s be clear: the ‘Line 5’ oil spill threat to the Great Lakes won’t be solved by emergency anchor rules that Gov. Whitmer called for today,” said Liz Kirkwood, executive director of FLOW. “The real solution to the threat of Line 5 in the Straits of Mackinac is to shut it down now.” 

The Enbridge oil pipelines are past their life expectancy, bent, and battered. The governor’s duty is to protect the Great Lakes from Enbridge, which has a well-documented track record of deceiving the state of Michigan about the condition of Line 5. The fastest way to protect the driver of Michigan’s economy and drinking water source for half of all Michiganders is to revoke the 1953 easement allowing Enbridge conditional access to the state’s waters and bottomlands. Burying this risk in an oil tunnel, which the Whitmer administration is negotiating now with Enbridge, is not a solution. It’s a recipe for another century of risk to our waters and our climate.

Images and video were released yesterday showing damage to the Line 5 oil pipelines in the Straits of Mackinac from an April 1, 2018anchor strike. The footage showed a gash across the east pipeline and several dents, exposed steel, and scrapes on the west pipeline. The longest dent is nearly twofeet long. Enbridge supplied the video and photos to the U.S. Senate Committee on Commerce, Science, and Transportation and to the U.S. Coast Guard, which is investigating the anchor strike. Enbridge told the committee they considered the evidence confidentialand didn’t want it published. U.S. Senator Gary Peters (D-Mich.) released the footage this week, after conferring with the Coast Guard.

Today, Michigan Governor Gretchen Whitmer directed the state Department of Natural Resources to proactively file an emergency rule to prevent anchor strikes in the Straits of Mackinac. According to the governor’s office, the emergency rule “will require large vessels to verify no anchors are dragging before passing through the Straits.” Whitmer also made a formal request to the U.S. Coast Guard to create a similar rule for all foreign vessels, which lie beyond state authority.

FLOW Praises Attorney General for Restoring Rule of Law on Line 5


FOR IMMEDIATE RELEASE:                                                                      March 28, 2019

Liz Kirkwood, FLOW Executive Director                                                   Email:Liz@FLOWforWater.org
Office: (231) 944-1568, Cell: (570) 872-4956                                           Web: www.FLOWforWater.org

Jim Olson, FLOW Founder and President                                                Email:olson@envlaw.com
Cell: (231) 499-8831

Dave Dempsey, FLOW Senior Advisor                                                     Email:Dave@FLOWforWater.org
(612) 703-2720


FLOW supports attorney general’s process and opinion, which is binding on state agencies and rejects the fatally flawed law and undermines side agreements on Enbridge oil pipelines, proposed tunnel in Mackinac Straits


In a major step toward restoring the rule of law, Michigan Attorney General Dana Nessel issued an opinion today declaring unconstitutional a hastily crafted law that sought to give away Great Lakes public trust bottomlands to Enbridge for 99 years for a private oil tunnel, while allowing the aged, dangerous existing “Line 5” oil pipelines in the Straits to continue operating for another decade as the tunnel is considered and possibly built.

The move comes in response to a formal request by Gov. Gretchen Whitmer and is critical to unpacking the layers of problems with the law creating the Mackinac Straits Corridor Authority that the lame-duck legislature rushed through in late 2018.

“We applaud Attorney General Nessel for clearly recognizing the legislative overreach, restoring the rule of law, and stopping the attack on the Great Lakes and the state constitution, which demands that the state’s air, water, and natural resources are treated and protected as ‘paramount,’” said Liz Kirkwood, an environmental attorney and Executive Director of FLOW (For Love of Water), a Great Lakes law and policy center based in Traverse City.

The attorney general’s opinion on Public Act 359 is binding on state agencies and voids the tunnel agreement called for by the law, and also nullifies the legal effect of the side agreements reached between the state of Michigan under then-Gov. Rick Snyder and Line 5-owner Enbridge. Those agreements allowed continued oil pumping through the Straits, where Lake Michigan meets Lake Huron, and an easement and 99-year lease of Great Lakes public bottomlands to Canadian-based Enbridge for private control of the tunnel for its own gain.

Public Act 359 and the related agreements for a tunnel and continued use of the existing, flawed Line 5 were not authorized under the standards of public trust law; the state and Enbridge flouted the Great Lakes Submerged Lands Act (GLSLA) that requires transfers and agreements for occupancy of the soils of under the Great Lakes by trying to avoid and ignore this most basic law and public trust principles.

Public Act 359 and the side agreements are peppered with other serious problems, most of which are covered by the questions the Governor asked the Attorney General to answer, which include:

  • Adding the tunnel and corridor authority to the 1952 law that created the Mackinac Bridge Authority goes far beyond the original public purpose to build a public bridge;
  • Establishing a term for members of the board of the corridor authority that exceeds the 4-year limit under Article III of the Michigan Constitution;
  • Violating provisions of the state constitution that prohibit fostering private or special purposes, the commingling of the government to aid primarily private projects, the appropriation of public property for private purposes, and the entanglement of the credit and taxpayers of the State for primarily private purposes.

“We hope this critical first step by the Attorney General will be followed by an immediate and full review of the Snyder administration’s and agencies’ deliberate evasion of the rule of law and mishandling of the grave and continuing risks of the existing Line 5, and the real and imminent threat to the Straits of Mackinac, towns and cities like Mackinac Island, tribal fishing interests, private property interests, businesses, and the rights of the public in the soils and waters of the Great Lakes,” said Olson.

FLOW recommends that Gov. Whitmer take immediate action to end the massive threat posed by the existing Line 5 in the Straits of Mackinac in a swift and orderly fashion based on the rule of law under our state constitution, statutes, and the public trust doctrine in the Great Lakes, including by:

  • Acknowledging that State of Michigan agencies are bound by the attorney general’s opinion.
  • Sending a letter to Enbridge indicating that the company should decide for itself, if it wants to build a new oil tunnel, and apply, if it chooses under the Great Lakes to construct a tunnel under the rule of law. The rule of law requires a full consideration of the risk to the paramount public rights in the soils and waters of the Great Lakes, and a showing that the company has no prudent and feasible alternatives to using the Great Lakes as a shortcut for western Canadian oil on its way to refineries in eastern Canada as well as overseas markets. If the company does not chose to do this, or cannot satisfy these mandatory requirements that protect the Great Lakes, then it should choose to use other parts of its several-thousand mile system.
  • Starting the process to decommission the 66-year-old Line 5 pipelines in the Straits of Mackinac, which are operating without lawful authority, in violation of the public trust and GLSLA, and in violation of their 1953 easement granted by the state. If Enbridge chooses to continue operating the existing Line 5 in the future, it can apply under the GLSLA for new authority to continue using Line 5 if it can demonstrate little risk and no feasible and prudent alternative to the unacceptable existing Line 5, but the state is not obligated to agree.

“Public Act 359, coupled with the State’s public entanglement with Enbridge, has put private gain and economic interests above the State’s and public’s paramount trust interest in the waters and soils of the Great Lakes,” said Olson. “The unconstitutional law and entangled state and Enbridge agreements represent one of the largest, if not largest, threats in the state’s history to the state’s ownership and public trust duty to protect the public’s rights and uses from private takeover or harm to the Great Lakes.”


Are Michigan’s Residents, Communities, and Businesses Insured if Line 5 Fails in the Straits?

Line 5 Pipeline

If the 66-year-old Enbridge Line 5 pipelines fail in the Straits of Mackinac, who will pay for the oil spill clean-up costs and damages to residents, coastal communities, businesses, and our public waters?

Michigan citizens may believe they are protected, at least at some level, by the insurance Enbridge should be required to have in place to pay the costs of cleaning up an oil spill disaster in the Straits, where Lake Michigan meets Lake Huron.

Unfortunately, that may not be the case.

A FLOW investigation has revealed potential holes in Michigan’s financial protections against a Line 5 pipeline rupture into the Great Lakes. The potential shortcomings could prove ruinous to communities, residents, and businesses that suffer losses at the hands of a Line 5 oil spill in the Straits.

The problems can be traced to last year when environmental regulators were largely sidelined by the Snyder administration, which negotiated four Line 5 agreements directly with Line 5-owner Enbridge from the executive offices of the governor.

Now FLOW’s findings come as Governor Gretchen Whitmer has issued an executive order and new directives aimed at strengthening the state’s regulatory and administrative oversight capabilities for the Great Lakes, although Republican legislators are seeking to overturn the governor’s order in favor of delegating oversight in part to the businesses being regulated by the state.

A Rush to Cut a Deal

The Snyder Administration’s inexplicable, rushed effort to sign agreements with Enbridge to replace Line 5, the dual 20-inch pipelines transporting crude oil and natural gas liquids through the Straits of Mackinac, has left the State of Michigan with potential catastrophic and unfunded financial liabilities.

The recent agreements between Governor Snyder and Enbridge allow the continued operation of the existing Line 5 pipeline for a period of 7 – 10 years, the estimated construction time required to design and build a tunnel to house a proposed new oil pipeline across the Straits of Mackinac.

Under the “Second Agreement,” the potential damages resulting from a disastrous pipeline break are supposed to be addressed by liability insurance Enbridge carries that would, if an oil spill occurred, pay for economic harm, clean-up and restoration costs, and natural resource damages.

The Snyder Administration Failed to Conduct a Risk Management Review

In its haste to sign agreements with Enbridge, the state failed to conduct a study that would evaluate the financial capacity of Enbridge to address a worst-case scenario for damages and claims that may result from an existing Line 5 failure. The purpose of a detailed quantitative and qualitative assessment of Enbridge’s capacity to perform in the event of a pipeline failure is make sure that Enbridge has the ready financial capacity to:

  • Immediately address and remediate environmental damages over the next seven to ten years;
  • Pay for economic damages that citizens, businesses, and affected coastal communities may incur as a result of a spill; and
  • Ensure that the State of Michigan is protected from future liabilities and expenses that third parties may bring against the state.

An appropriate examination of measures necessary to manage the risks and exposure state and local governments may face from pipeline failures is an essential precaution necessary to evaluate the risks posed by pipeline failures.

Minnesota and Wisconsin Expert Reviews Found Enbridge’s Insurance Coverage Deficient

Recently, the State of Minnesota and Dade County, Wisconsin, retained insurance experts to determine the adequacy of the financial assurances Enbridge has in place for pipeline related projects in their states.

Both expert analyses determined that the insurance Enbridge carried was deficient. The General Counsel to Minnesota’s Department of Commerce stated that they “found no meaningful coverage for damages caused by oil spills.” The Wisconsin analysis revealed Enbridge did not carry Environmental Impairment Liability (EIL) insurance, explaining:

An EIL policy designed specifically to cover claims arising from pollutants provides broader coverage for environmental losses than a GL [General Liability] policy does. A good quality EIL insurance specifically insures Cleanup Costs, Emergency Response Costs, Restoration Costs and Natural Resources Damages within the insuring obligations of the policy. GL policies do not reference these important elements of coverage which will always come into play as a source of damages in a pipeline spill.

Unlike our sister states dealing with Enbridge, there is no evidence that the State of Michigan conducted a risk management and insurance review of any kind, nor does it appear that the State sought any assistance from qualified experts to determine whether the financial assurances Enbridge has proffered would, in fact, protect the State of Michigan and its natural resources as well as coastal communities, citizens, property owners, and businesses.

FLOW’s communications with the experts who conducted the Minnesota and Wisconsin reviews has raised the concern that the Line 5 pipeline may never have been adequately insured.  Even worse, Line 5 may be potentially uninsurable.  Given its age and known condition — anchor strikes, coating loss, abrasion, dents, cracks, bending, and deformities — Environmental Impairment Liability insurance may be unavailable in the international insurance market.

Inadequacies of Enbridge’s Financial Assurances to the State of Michigan

A preliminary review raises many questions regarding the adequacy of Enbridge’s financial assurances that are supposed to mitigate the economic harm if Line 5 fails:

  • Enbridge’s General Liability insurance may not cover clean-up costs, restoration costs, natural resource damages, or claims by third-parties who have been injured by a spill.
  • Enbridge does not carry “environmental impairment liability” insurance that would cover clean-up costs, natural resources damages and claims by injured third-parties.
  • Enbridge’s financial assurances are capped at $1.878 billion dollars, far less that the $6.3 billion estimate of worst-case damages determined by a study by Michigan State University, and a potential $45 billion loss to the nation’s Gross Domestic Product in after just 15 days from disrupting Great Lakes commercial shipping and steel production.
  • Enbridge Inc., the parent company, is not a signatory to the agreement relating to financial assurances; instead three Enbridge subsidiaries signed the agreement. It is unknown whether these subsidiaries are insured.
  • The State of Michigan may not be named as an “additional insured” on the insurance policies. If not, then the State of Michigan would have no direct right of recovery against an insurer, but instead would only have a derivative right to a recovery through Enbridge or one of its subsidiaries, assuming the subsidiary was an insured party.

An expert risk management review would have analyzed, quantitatively and qualitatively, the adequacy of Enbridge’s financial assurances and determined whether they afforded real economic protections to Michigan’s coastal communities, property owners and businesses.  It is imperative that an expert review be conducted immediately.

FLOW’s Recommendations for the State of Michigan

Based upon the preliminary review of the financial assurances intended to mitigate the present economic risks posed by a Line 5 failure and the ensuing questions and issues that have been identified by FLOW and independent insurance experts, the State of Michigan should:

  • Retain qualified experts to determine the adequacy of Enbridge’s financial assurances and to make appropriate recommendations regarding mitigating the magnitude of the financial risks posed by Line 5;
  • Determine to what extent the State of Michigan is bound by the indefinite and inadequate terms and provisions of the “Second Agreement;”
  • Require Enbridge, Inc., to name the State of Michigan as an “additional insured” and/or “named insured” on its insurance coverage for Line 5; and
  • Seek the termination of operation of Line 5 until all financial assurance deficiencies are fully cured and satisfied.

The Snyder Administration appears to have placed the people of the State of Michigan at great risk by its failure to exercise due diligence and assess the financial assurances proffered by Enbridge.

The Whitmer Administration and Attorney General Nessel have the opportunity to correct this critical omission.