Enbridge seeks court ruling on Great Lakes oil pipeline deal
Calgary-based company wants confirmation that agreement with previous government to build Line 5 is binding
Enbridge Inc. is asking a Michigan court to rule on the legality of an agreement it reached with former Gov. Rick Snyder to build an oil pipeline tunnel beneath the channel linking lakes Huron and Michigan.
The Calgary-based company said Thursday that it is asking the Michigan Court of Claims to determine the constitutional validity of the deal that would replace its current pipeline built 65 years ago.
The Court of Claims deals with civil actions filed against the state and its agencies.
Snyder, a Republican, was replaced in January by Democratic Gov. Gretchen Whitmer. She is pushing the company to speed up its timeline for building the tunnel in the Straits of Mackinac and wants to reach an agreement by Monday.
Michigan Attorney General Dana Nessel has said a law enacted in December to implement the tunnel agreement violates the state constitution.
Enbridge says risk 'virtually zero'
In a statement, Enbrige defended the integrity of the pipeline and said it's going above and beyond to ensure there are no spills into the Great Lakes.
"Despite this strong safety record, and in response to concerns raised by some within the State, Enbridge is prepared to improve safety even further by investing $500 million to construct and operate a concrete-walled tunnel 100 feet below the Straits, in which a new Line 5 would be housed by 2024," reads the statement.
"This would reduce the risk at the Straits to virtually zero."
Enbridge says the new administration in Michigan has not offered an alternative to the plan established prior to it taking office and that the timeline for shutdown of the current pipeline — two years — is untenable.
"We are taking this action in order to protect Michigan consumers," said Guy Jarvis, Enbridge executive vice-president of liquids pipelines, in the statement.
"We require a court review of the enforceability in order to remove obstacles to building the tunnel as quickly as possible and ensure energy security and environmental protection for Michigan."
Impact on prices
Kevin Birn, vice-president of North American crude oil markets at IHS Markit, said a shutdown of Line 5 would have major impacts.
"It's an integral part of the Enbridge system, you can't just turn things off and not have disruptions in the system," he said.
"Enbridge has commitments for both the people that ship on their system to deliver the product to market and the people that buy the crude at the other end, refiners that process it into gasoline diesel. So disruptions like that, you know, would be hugely disruptive to those relationships."
That lack of capacity could also force down the price of Western Canadian oil, said Birn.
Line 5 has drawn fierce criticism in recent years from environmental groups, native tribes and tourism-related businesses fearful of a rupture that, according to worst-case scenarios outlined by university researchers, could pollute hundreds of miles of Great Lakes shoreline.
With files from The Associated Press