Michigan commission says emissions can factor into Line 5 project approval

Michigan's utility commission said emissions concerns can be factored into the approval process for Enbridge's Line 5 partial replacement project to build a tunnel for the crude oil and propane pipeline system beneath a portion of the Great Lakes.

The Michigan Public Service Commission's regulatory process is completely separate though from the ongoing efforts by Michigan Gov. Gretchen Whitmer to permanently shutter the 540,000 b/d pipeline in mid-May, which is currently playing out in both state and federal courts.

Line 5, which Enbridge is proposing to partially replace by 2024, mostly transports natural gas liquids, especially propane for home heating, as well as light crude oil from Western Canada, to various hubs in the US Midwest and Eastern Canada. The 645-mile line stretches from Wisconsin through Michigan and into Ontario and is part of Enbridge's larger Mainline and Lakehead systems.

Arguing there are ongoing safety threats in the Great Lakes, Whitmer has ordered the 68-year-old Line 5 shut by May 12. While Calgary-based Enbridge has pledged to defy the orders, court-ordered mediation talks began last week.

As for the longer-term efforts to build a Line 5 tunnel beneath the Straits of Mackinac -- a 4-mile-wide channel linking Lakes Huron and Michigan -- the Michigan utility commission said it will consider arguments pertaining to greenhouse gas emissions. The tunnel project is intended to keep the old pipeline network safe and viable long term.

However, energy analysts from ClearView Energy Partners said they do not see this determination necessarily as a negative for Enbridge, especially if the existing pipeline remains open. ClearView said the project's opponents could struggle to prove the tunnel replacement would increase greenhouse gas emissions relative to their current levels.

A bigger win for Enbridge is the utility commission's additional decision that the regulatory process will not consider whether there is a public need for the pipeline. The commission essentially ruled that public demand issue was determined way back in 1953. Opponents have tried to argue that the project is unnecessary because of the transition away from fossil fuels and toward more renewable energy sources.

Enbridge is hoping to start construction on the tunnel project by the end of this year. The timeline drags out until 2024 because building a tunnel involves much more engineering and construction work than only installing a new pipeline.

The Whitmer administration and Enbridge have maintained a confrontational relationship since she took office in the beginning of 2019, and tensions escalated last year when Line 5 was partially shuttered for much of this summer after an anchor support for the pipeline was damaged and eventually repaired. Following the governor's November shutdown order by May 12, Whitmer in February issued an executive order declaring an emergency to ensure adequate propane distribution when supplies were tight earlier this winter.

Energy analysts believe ongoing court fights over the proposed shutdown will extend well beyond May. Michigan is suing to revoke the pipeline's original 1953 easement and close the propane system, while Enbridge is countersuing for an injunction against Whitmer's shutdown order, arguing the US Pipeline and Hazardous Materials Safety Administration is instead in charge of the pipeline's safety.

The pending court battles largely rest on whether Line 5 is primarily under federal or state regulatory oversight.