It’s the latest in a seemingly endless series of challenges against Canada’s energy and petrochemical industries.
For various reasons we’ve witnessed several energy infrastructure projects abandoned, delayed or cancelled. Energy East? Toast. Keystone XL to the Golf Coast? Mired in legal squabbles, then scrapped. TMX to Vancouver was bogged down in legal challenges before being purchased by the federal government. Fingers crossed that TMX is built as soon as possible.
And now we see the State of Michigan is threatening to shut down Enbridge’s Line 5 – a line that has been in operation since 1953. Perhaps this threat will finally grab the attention of our friends in downtown Canada. Line 5 is a 1,038 km pipeline measuring 30 inches in diameter that carries up 540,000 barrels a day of synthetic crude, natural gas liquids and sour crude. Crude from Western Canada and elsewhere enters Line 5 in Superior, Wisconsin and carries on through Michigan and on to Sarnia’s petrochemical cluster in Ontario and beyond to Quebec via Enbridge’s Line 9.
Along the way it provides feedstock to various refineries in Michigan. Line 5 delivers 53 per cent of Ontario’s crude oil supply and basically all of the propane needs of Ontario. It also transports two-thirds of the crude consumed in Quebec.
At issue is the pipelines crossing under the environmentally sensitive Straits of Mackinac, even though the line has never failed there. Michigan is rightfully concerned about the prospect of a spill, having experienced considerable damage from a pipeline leak in the Kalamazoo River in 2010. Since that time, the industry has responded with increased safety systems and monitoring.
Regardless, Enbridge has come to the table with a proposal (at their own expense) to bore a tunnel through rock deep below the Straits lakebed. In fact, they’ve already invested $100 million on permitting, engineering and design. Once the tunnel is successfully built, Enbridge would shut down the old line and render a mishap with a ship anchor basically impossible.
Now, you’d think the benefits of this pipe would be apparent to everyone and we’d all be on the same page in working together to making the existing line safer. After all, shutting down the line would knock out half of Michigan’s propane supply – commonly used for home heating in that state. The energy delivered to Sarnia, Quebec and several US locations would need to be replaced by offshore energy delivered by tanker, which has its own environmental risks and cost implications. Huge chunks of Canada’s manufacturing supply chain would be disrupted.
You’d also think that, having experienced challenges around global supply chains for the past several years, politicians on both sides of the Canada-US border would be laser-focused on finding a solution that ensures safety while keeping this critical piece of infrastructure running.
Instead, the future of Line 5 is tangled up in court and it’s difficult to say when we might see some resolution. Right now, Canada’s energy and manufacturing industries need to focus on recovery. The Line 5 dispute is a senseless and totally avoidable distraction.
Canadian Manufacturers & Exporters (CME) is the voice of Canadian manufacturing. CME represents more than 2,500 companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.