Michigan governor aims to shut Enbridge Line 5 'as soon as possible'

Washington — The fight over Enbridge's 540,000 b/d Line 5 heated up Thursday as Michigan Governor Gretchen Whitmer promised to stop the "flow of oil through the Great Lakes as soon as possible."

The system remains a key route for light crude and NGLs to the US Midwest and Ontario, including about 55% of Michigan's propane demand.

The propane-by-rail market would likely have enough slack to replace pipeline flows into Michigan if the state carries through with a threat to force Enbridge to decommission Line 5, according to S&P Global Platts Analytics.

The future of Line 5 is in doubt after talks broke down this month between Enbridge and Michigan.

In March, Whitmer made good on a campaign promise to halt Enbridge's project to build a utility corridor under the Straits of Mackinac. The tunnel would address environmental safety concerns surrounding the 65-year-old pipeline and house a future replacement.

When talks broke down, Enbridge filed a lawsuit with the Michigan Court of Claims to enforce an agreement signed with Whitmer's predecessor approving the tunnel project.

Whitmer's lawyers asked the court Thursday to dismiss Enbridge's lawsuit.

"Her reasonable requirement has been that the dual pipelines through the Straits cease operation at a date certain, after allowing for a period of transition," spokeswoman Tiffany Brown said in a statement. "Enbridge, however, has insisted that it be allowed to run oil through the Great Lakes indefinitely."

STATE TO LOOK FOR 'POSSIBLE VIOLATIONS'

Whitmer directed the state Department of Natural Resources to begin a comprehensive review of Enbridge's compliance with the 1953 easement and "other factors affecting its viability."

"The 1953 Easement created the terms and conditions under which Enbridge could operate the dual pipelines on the bottomlands of the Great Lakes," the governor's spokeswoman said. "Possible violations of the easement are just one of several grounds by which the state could seek to shut down the pipelines, some of which the attorney general has already invoked today."

Enbridge spokesman Michael Barnes said Thursday the company remains open to discussions with Whitmer and hopes to reach an agreement outside of court.

"Line 5 is a critical source of 540,000 b/d of propane and crude oil supply for Michigan and surrounding areas, and shutting it down would lead to a serious disruption of the energy market," he said. "Line 5 serves an estimated 55% of the state's propane needs, including approximately 65% of the propane used in the Upper Peninsula and northern Michigan, for which no viable alternatives exist."

Barnes said Michigan residents and Detroit's international airport depend on the fuel that regional refiners produce from oil carried on Line 5.

"Line 5 is critical infrastructure that Michigan residents depend on every day, and it would be irresponsible to shut it down," Barnes said. "It is safe and well maintained, and we intend to continue to operate it for decades to come."

-- Meghan Gordon, meghan.gordon@spglobal.com

-- Edited by Jeff Mower, newsdesk@spglobal.com