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 requestby 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 theAttorney 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.”
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 AdministrationFailed 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.
After last year’s election, newly chosen leaders and the old guard with a few weeks left in Lansing rushed in opposite directions. The Snyder administration and legislators intensified their unprecedented, legally questionable attacks on water, the environment, and public health during a lame-duck feeding frenzy.
The new guard, Governor Gretchen Whitmer and Attorney General Dana Nessel, meanwhile formed transition teams and appointed cabinet members, new department heads, and staff to reestablish Michigan’s constitutional mandate that the state shall protect the paramount public concern in the Great Lakes, groundwater, and public health from pollution and harm arising out of water crises like statewide PFAS surface and well water contamination, Detroit drinking water shutoffs, lead and Legionnaire’s Disease in Flint water, and the Enbridge Line 5 oil pipelines in the Straits of Mackinac.
The combination of these crises manifests a far deeper crisis in state government—a breach of trust in the oath of office of state officials to uphold the constitution and rule of law. State leaders under the Snyder Administration and many elected officials deliberately ignored the constitutional and legal mandates and instead chose to serve special private interests.
FLOW’s Commitment: Protecting Public Waters from Pollution and Private Control
Here at FLOW, we are increasing our efforts and projects to protect the paramount public trust concern in water, the environment, and public health through our Campaign for Fresh Water launched last fall. One of these projects is to bring an end to the high risk of extreme damage to the Great Lakes, tribal fishing, drinking water, property, businesses, citizens, and Michigan’s economy from the continued operation of the decaying, 66-year-old Line 5 oil pipelines in the Straits of Mackinac.
FLOW has redoubled our efforts in concert with a large public outcry and movement to decommission or end Line 5, collaborating with Oil & Water Don’t Mix and many local and statewide environmental groups, like National Wildlife Federation and Groundwork Center, individuals, families, businesses, communities, elected officials, and the leadership and legal challenges brought by Michigan’s Indian tribes with treaty rights in the Straits, Straits of Mackinac Alliance, and the City of Mackinac Island.
The former Snyder Administration and state environmental and natural resource agencies, former Attorney General Schuette, and a core of pro-Enbridge legislators in a flurry of agreements, laws, and actions, suspended the state Constitution and rule of law to convey and appropriate public trust lands and waters for Enbridge to build a private oil tunnel for a new Line 5 in the Straits of Mackinac for another 99 years. Worse, these state officials and leaders purported to guarantee Enbridge to keep operating and using Great Lakes bottomlands for its dangerous existing Line 5 for another 10 years—without the required authorization and occupancy or use agreements required by the 1955 Great Lakes Submerged Lands Act (GLSLA) and public trust law that apply to the soils and waters of the Great Lakes.
This is the year of reckoning for Enbridge’s Line 5. It is time to unpack and nullify the unilateral deals made with Enbridge by the Snyder administration and confirmed by the legislature without following the constitution and rule of law.
This is the year of reckoning for Enbridge’s Line 5. It is time to unpack and nullify the unilateral deals made with Enbridge by the Snyder administration and confirmed by the legislature without following the constitution and rule of law. The administration and legislature signed off on a covert deal that would let Enbridge Energy continue pumping 540,000 barrels of oil a day (bbl/day; 1 barrel equals 42 U.S. gallons) through the dual lines laid in 1953 in the Straits and Great Lakes with a catastrophic worse-case damage scenario in the tens of billions of dollars. Unaccountably, the administration and legislature did so despite Great Lakes law in Michigan that prohibits the transfer or occupancy of the state-owned waters and the soils beneath them for private purposes.
Reward for Failure: After Enbridge’s 2010 Kalamazoo Pipeline Disaster, Michigan Officials Doubled Enbridge’s Oil Pumping across Michigan, and then Locked in an Oil Tunnel Deal for 99 Years
How is it that the State ended up rewarding Enbridge for a spill from Line 6B of a million gallons of crude oil and billions of dollars of damage to the Kalamazoo River system? While the State worked with Enbridge to address the damage from its unprecedented 2010 spill, it granted Enbridge a gigantic windfall by incrementally approving, from 2012 to the present, the doubling of Enbridge’s pipeline capacity and oil transport through the Great Lakes. In effect, while Canadians continued to block pipeline projects to transport crude oil to the country’s coasts, and citizens in the U.S. derailed the Keystone XL in the West, the Snyder Administration and former Attorney General Schuette orchestrated a “Great Lakes XL” that is even larger.
And then in 2018, Snyder, in his term’s waning months, and the lame-duck legislature gave away and endangered the Great Lakes to Enbridge, by locking in a 99-year sweetheart deal for Enbridge to build an oil tunnel to convey Line 5 under the Straits and granting Enbridge the cover to keep operating the existing failing Line 5 that threatens tens of billions in damages. On top of this deal, the Administration totally failed to even consider climate change impacts and risks and the rapid shift toward the new renewable energy economy that will leave the state with a billion-dollar dinosaur.
Here’s how the calculated actions of Snyder, Schuette, and their cohorts bypassed legal requirements in seven sweeping steps, along with some advice from FLOW to Michigan’s new leadership at the start of their journey to reestablish the rule of law and rollback the mess:
Bit by Bit, Doubling the Oil Flow on Line 6b after Enbridge’s Kalamazoo River Disaster
First, from approximately 2011 to 2014, the Michigan Public Service Commission (MPSC) approved a series of Enbridge applications to replace short segments, rather than a single application to replace the whole portion, that had the effect of doubling the design capacity of most of Line 6b pipeline from 400,000 to 800,000 barrels (bbl)/day. Allowing the MPSC to review shorter pipeline segments avoided the alternative analysis on the entire Line 6b from Indiana to Sarnia, Canada.
MPSC rules and decisions, and Michigan’s environmental laws, require a review of likely impacts and alternatives to the entire length of the pipeline. Had this rule been followed, the MPSC would have been required to look at all of the Enbridge lines in Michigan, and determine the overall needs of the public necessity and needs of the company, short and long term, and the alternative or best route or location that would best meet that need with the least impact and risk to water, environment, and communities. That would have included a review of the need for Line 5, including the risks to the Straits of Mackinac and Great Lakes. It also would have required a consideration of the future need for crude oil through Enbridge’s system in Michigan in light of falling crude oil demands caused by the rapid and imminent shift to renewable energy to reduce the effects of climate change.
Increasing Line 5’s Oil Flow in the Straits by 80 Percent
Second, during the same time frame, the MPSC approved the location and installation of new and changed pump stations and anti-friction fluid injection facilities for Line 5, including the Straits segment, so Enbridge could implement its final increment to result in the increase the oil transport capacity of Line 5 from 300,000 to 540,0000 bbl/day. Again, the MPSC did not evaluate the need, impacts, risks, or alternatives to this overall 80-percent increase in flow volume of crude oil. Once more, the State allowed Enbridge to avoid the law that required a full evaluation of the purpose. Had the rule of law been followed in the doubled Line 6B and expanded flow volume in Line 5, the State through proper notice, public input, and evidence would have been required to look at overall impacts, risks, and alternatives and need for the Enbridge system, and Line 5 could have been decommissioned in an orderly manner in exchange for the doubling of Line 6B.
Saddling, Elevating, and Damaging Line 5 in the Straits
Third, although not disclosed by Enbridge until 2016, Enbridge installed saddle supports screwed into the lakebed to support a failing design of Line 5 in the Straits. The original design specified in the 1953 easement and built in the Straits called for the heavy steel dual lines in the Straits segment to be laid on the bottom on the lakebed. If wave action and currents scoured more than 75 feet of soils beneath a segment of the pipes, the company was required to stabilize the line by closing the existence of the spans.
While not disclosed until 15 years later, when filling or grout bags failed, Enbridge in 2001 started installing saddle supports screwed into the lakebed to elevate the heavy dual pipes above the lakebed. Initially, there were 16 supports, more and more were added, and between 2016 and 2018, the Michigan Department of Environmental Quality (DEQ) permitted Enbridge to install more than 70 saddle supports, bringing the total to 200 supports, which has resulted in a suspension of three miles of an aged line above the lakebed.
The DEQ shrouded Enbridge’s failing Line 5 risks and redesign by characterizing the supports as a “repair” and “maintenance.” This not only covered up the redesign but confined the legally required impact and alternative analysis to a 50-foot radius of lakebed around each support. As a result, the DEQ ignored and allowed Enbridge to escape the comprehensive review of potential impacts and alternatives to the failing condition of the outdated line required by the Great Lakes Submerged Lands Act.
In addition, Enbridge’s installation of the saddles has damaged Line 5’s anti-corrosion protective coating, a fact that the company hid from Michigan officials for three years during its negotiations to install additional anchor supports.
Signing Side Deals for Another 99 Years of Line 5 in the Straits
Fourth, Governor Snyder, DEQ and the Department of Natural Resources (DNR) signed two agreements with Enbridge between October and the end of December 2018 that purported to transfer state public trust bottomlands and soils of the Straits so Enbridge can build a tunnel for a new 99-year pipeline. The tunnel and new line will take 10 years or more to construct. Until the new line is operating, Enbridge is authorized to continue operating the failing design of the existing aged line.
Under the GLSLA, easements, leases, uses, or improvements on, in, under the state-owned public trust soils of the Great Lakes are prohibited unless authorized within two narrow exceptions: (1) it is for a public purpose, related to navigation, boating, fishing, swimming, or drinking water; and (2) it will not threaten an impairment of the public trust in the waters, soils, or these public trust uses.
Under the GLSLA, easements, leases, uses, or improvements on, in, under the state-owned public trust soils of the Great Lakes are prohibited unless authorized within two narrow exceptions: (1) it is for a public purpose, related to navigation, boating, fishing, swimming, or drinking water; and (2) it will not threaten an impairment of the public trust in the waters, soils, or these public trust uses. The two agreements that commit leasing, easements, or use of waters and soils beneath the Straits do not require Enbridge to obtain authorization or findings under the GLSLA. In other words, the Governor and his agencies agreed to transfer state public trust lands for the tunnel and the private 99-year new line, and at the same time allow the continued use of public bottomlands for the existing line, without obtaining the authorization required by law.
Ramming through a New Law to Transfer State Public Lands to Canada’s Enbridge without Proper Authorization
Fifth, when the Legislature ram-rodded the passage of Public Act 359 and Governor Snyder signed it into law in late December, they created a corridor authority to sign the tunnel agreement, easements, leases and other commitments for Canadian-based Enbridge to take over the public’s state-owned waters and soils and build the tunnel and its new pipeline. On its face, Act 359 transfers or commits to the authority these state public trust bottomlands without requiring authorization of the conveyance under the GLSLA. Under U.S. Supreme Court and Michigan Supreme Court decisions, any disposition, occupancy, or use must obtain authorization based on findings of no private purpose and no impairment of waters, soils, fishing, navigation or other public rights. Otherwise, it is prohibited.
Bypassing State Law and Alternatives to Risking the Great Lakes
Sixth, the easement for a public utility, after approval by the MPSC, such as the tunnel or the 99-year lease, or the continued operation of the existing Line 5 in the Straits, must be obtained from the state DNR in addition to the authorization under the Great Lakes Submerged Lands Act. Because the easements involve public trust bottomlands, they cannot be granted unless authorized by the GLSLA or unless based on the standards of the common law of public trust, which requires the comprehensive review of potential impacts and alternatives to the total or substantial change of the outdated dual lines in the soils and open waters of the Great Lakes.
Appropriating Public Property for Enbridge’s Private Purpose
Seventh, the Michigan Constitution, Art IV, Sec. 30, prohibits the appropriation of public property of the State for private or local purposes. An appropriation occurs where the disposition or transfer of state property, like the public trust waters and soils of the Great Lakes, is granted without findings or full and fair compensation—that is, where the transfer is for free, little consideration, or less than the full public trust value of these waters and soils.
In short, our former Governor, DEQ and DNR Directors, the MPSC, and former Attorney General suspended wholesale the rule of law for the benefit of Enbridge’s massive increase in the volume of crude oil through our Great Lakes State for private gain.
Restoring the Rule of Law and the Paramount Place of the Water and the Great Lakes in Michigan’s Future Prosperity
The first order of business for our new leaders—Governor Whitmer and Attorney General Nessel—is to restore the rule of law on Line 5 in Michigan, and they are off to a good start. The high risks and more than $6 billion catastrophe from a release of crude oil in the Great Lakes and an estimated additional $45 billion in damage to shipping, steel production, and jobs are unacceptable by any sane measure.
The public deserves better, the law and state Constitution demand it, and we applaud and urge on the governor and attorney general’s steps to bring Line 5 to a prompt and orderly decommissioning and closure.
Governor Whitmer should direct her new directors of the DEQ and DNR and Attorney General Nessel should direct her lead attorneys on Line 5 and the Great Lakes to conduct a thorough and careful review and reevaluation of the Snyder Administration’s and former Attorney General Schuette’s failure to follow the public trust, GLSLA, and Michigan Constitution in the handling of the entire Enbridge Line 5 controversy.
Buoyed by the work of so many organizations, tribes, communities, individuals and families, and the majority of citizens who elected them, the Governor and Attorney General Nessel and their administrations have a mandate and opportunity to restore water, environment, and public health as paramount in Michigan. The public deserves better, the law and state Constitution demand it, and we applaud and urge on the governor and attorney general’s steps to bring Line 5 to a prompt and orderly decommissioning and closure.
Jim Olson, President and Founder
Enbridge has alternatives within its pipeline system to meet all of its and Michigan’s needs without using the 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.
FLOW Supports Gov. Whitmer’s Request for an Opinion from Attorney General on Legality of Hastily Crafted Law and Side Agreements on ‘Line 5’ Oil Pipelines and Proposed Tunnel in Mackinac Straits
The following statement can be attributed to Jim Olson, environmental attorney, founder, and president of FLOW (For Love of Water), a Great Lakes law and policy center based in Traverse City:
“This first and immediate step by Gov. Gretchen Whitmer in a letter asking Attorney General Dana Nessel for an opinion on Public Act 359 is critical in unpacking the layers of problems with the newly enacted law, any tunnel agreement, and most importantly the massive threat posed by the existing Line 5 in the Straits of Mackinac, a threat that must be ended 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.”
“In the last three weeks of 2018, then-Gov. Rick Snyder, the Department of Environmental Quality, and Department of Natural Resources signed agreements to enable Enbridge to construct a tunnel that the state would own and lease to Enbridge for 99 years for a new crude oil pipeline under the waters and in the soils of the bottomlands of the Straits of Mackinac. In order to finalize the deal before the end of the year, the Republican-controlled legislature during the lame-duck session rushed through a law—Public Act 359—that set up a Mackinac Straits Corridor Authority to sign the tunnel deal with Enbridge and guarantee the transfer of publicly owned and controlled Great Lakes bottomlands and other financial benefits to Enbridge for private gain, the 99-year privately owned pipeline.
“During this same time, Governor Snyder, the DEQ, DNR, and Enbridge without public review finalized a separate agreement that would give Enbridge the right to continue using its existing dangerous and flawed Line 5 pipelines in the open waters of the Mackinac Straits for another 10 years, or as long as it takes to complete the tunnel and install the new pipeline.
“Everyone agrees that the release of oil to the Great Lakes would cause massive harm to those waters, as well as businesses, communities, property owners, tribal fishing rights, and the public’s paramount rights for fishing, boating, and recreation protected by the public trust doctrine – an ancient principle that prohibits the transfer of public lands and waters without compliance with laws that assure a public purpose and no imprudent risks to health, environment, and property.
“Public Act 359, coupled with the State’s public entanglement with Enbridge, puts private gain and economic interests above the State’s and public’s paramount trust interest in the waters and soils of the Great Lakes. The 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. Act 359 and these 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 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 agreements are peppered with other serious problems, most of which are covered by the questions the Governor has asked the Attorney General to answer. These 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 comingling 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 Governor and Attorney General will be followed by an immediate and full review of the Snyder administration’s and agencies’ mishandling of the grave and continuing risks of the existing Line 5, and the real and imminent threat to the Mackinac Straits, towns and cities like Mackinac Island, tribal fishing interests, private property interests, businesses, and the rights of the public in the Great Lakes.”
Protect our greatest treasures — the Great Lakes and the Mackinac Bridge. Stop Gov. Rick Snyder’s rush to lock in a 99-year deal for a private oil tunnel in the Mackinac Straits. Never stop fighting for clean water and democracy.
Those were the messages loud and clear from a big crowd of residents, business owners, tribal leaders, environmental and social justice groups, and many others who spoke out Thursday in St. Ignace in favor of protecting the Great Lakes and Pure Michigan economy and against rushing to make the Mackinac Bridge Authority the owner of an oil tunnel for at least 99 years.
Snyder administration officials pushed their deal with Enbridge to keep the decaying Line 5 oil pipelines in the Straits of Mackinac running at least through 2028 while exploring a possible tunnel. The authority board — recently packed by Snyder with pro-tunnel appointees — asked few questions.
But the public had many pointed questions for the Mackinac Bridge Authority. What’s the rush on a decision with century-long consequences? Why partner with deceptive and spill-prone Enbridge? Why try to exempt Enbridge from laws protecting our public health, private property, land, and water? Why give away our public lands and waters to benefit a private foreign corporation? Why ignore tribal treaty rights in the Straits that pre-date the state of Michigan?
The questions kept coming as nearly 40 people took turns. Why lock in this Great Lakes shortcut for Canadian oil for another century when our changing climate demands clean energy solutions in the immediate future? How will our tourist-based businesses survive a Great Lakes oil spill catastrophe? Why politicize and dilute the single-purpose mission of the authority to operate and protect the Mackinac Bridge? Why tie the hands of the incoming governor and attorney general, who campaigned on shutting down Line 5 before it blows?
Bill Gnodtke, immediate past MBA chair
Immediate past chair of the Mackinac Bridge Authority Bill Gnodtke drew a standing ovation after questioning the lack of transparency and attempt to weaken the single-purpose mission of the authority board. He submitted a letter from himself and seven other former members of the authority board with a collective 88 years of service to the Mackinac Bridge. The letter notes that the endorsers, including Mackinac Island Grand Hotel owner Dan Musser III, were appointed under Democratic and Republican Governors Blanchard, Engler, Granholm, and Snyder.
The only voice in support of the oil tunnel deal came from a woman identifying herself as an Enbridge employee, although it appeared that dozens of Enbridge employees arrived in company trucks, and sat silently in rows of seats, wearing pro-tunnel buttons on their shirts.
The authority board had no answers, then left without discussion or voting. The board set its next meeting for Feb. 12-13 in Lansing, but retains the option to schedule an ad hoc meeting before year’s end to further consider or approve the bridge-tunnel scheme.
Shortly after the meeting and in coordination with the Snyder administration, departing State Sen. Tom Casperson, a Republican from Escanaba, introduced Senate Bill 1197 to amend the Mackinac Bridge Authority Act to allow it to own and operate a “utility tunnel,” with the Enbridge Line 5 oil pipeline as the intended occupant. There’s also the uncertain prospect of adding gas or electric lines, which could rent space in the tunnel by paying Enbridge, not the bridge authority that is proposed to own it. The Michigan Senate could quickly approve the bill in the lame duck session after Thanksgiving, and send it to the house. Gov. Snyder is seeking to sign and tie the hands of the incoming administration of Gretchen Whitmer and Attorney General Dana Nessel, who both campaigned for shutting down Line 5, not replacing it with a tunnel. Gov. Snyder also released a draft of a third oil tunnel agreement with Enbridge, which Senate Bill 1197 seeks to enact.
FLOW and other leaders of the Oil & Water Don’t Mix campaign are planning a Line 5 lawmaker education day for November 27 to fight for the Great Lakes and the Mackinac Bridge. Stay tuned to the FLOW website for deeper analysis of Senate Bill 1197 and the third oil tunnel agreement, and steps that citizens, communities, and businesses can take to protect the Great Lakes and the Mighty Mac.
FLOW’s Jim Olson speaks about Line 5, a proposed private oil tunnel, and the law on behalf of the Oil & Water Don’t Mix campaign at the November 8, 2018 meeting of the Mackinac Bridge Authority.
Liz Kirkwood speaks at the November 8, 2018 Mackinac Bridge Authority Meeting on risk and due diligence
Kelly Thayer speaks at the November 8, 2018 Mackinac Bridge Authority Meeting on not partnering with Enbridge.
Links to presentations by officials working for the Snyder administration on the proposed oil tunnel, the governor’s letter to the Mackinac Bridge Authority, and the governor’s draft third tunnel agreement with Enbridge: https://mipetroleumpipelines.com/resources-reports
On its 61st birthday, the Mackinac Bridge faces its biggest threat to date
FOR IMMEDIATE RELEASE November 1, 2018
Contact: Liz Kirkwood, Executive Director Email: Liz@FLOWforWater.org
FLOW (For Love of Water) Office: (231) 944-1568, Cell: (570) 872-4956
TRAVERSE CITY, MI – The use of the legal powers of the Mackinac Bridge Authority (MBA) to facilitate an oil tunnel under the Straits of Mackinac, as proposed by outgoing Gov. Rick Snyder in a secretly negotiated deal with Enbridge Energy Partners, violates environmental provisions of Michigan’s Constitution and laws, threatens the fiscal integrity of the MBA and its Mackinac Bridge, and could subject the authority and taxpayers to billions of dollars of liability in the event of a tunnel accident, FLOW said today in a letter to members of the authority.
FLOW called on the MBA to reject the proposed public-private partnership, or any other agreement with Enbridge, for the proposed tunnel or other privately owned utilities. The MBA Board on November 8 in St. Ignace will, for the first time, hold a public meeting to learn about and discuss its proposed role in the Snyder-Enbridge agreement that’s been hashed out covertly by Gov. Snyder for at least a year. Snyder in recent months has stacked the MBA Board with a majority that shares his tunnel vision.
“In law and practice since the day the Mackinac Bridge opened on November 1, 1957, exactly 61 years ago today, the MBA and the bridge have been jealously protected as a completely independent and stand-alone entity,” said FLOW Founder and President Jim Olson, who is an environmental attorney. “The bridge was a singular, and wholly public, state project for its citizens and the general motoring public connecting the people of both peninsulas. A key provision of the Snyder-Enbridge deal would do just the opposite. It demands that the MBA agree to and participate in a ‘public-private partnership,’ which is vastly different from a state-sponsored project for a singular public purpose like transporting the citizens and general public.”
The Snyder-Enbridge deal provides that the MBA would own the proposed oil tunnel and lease it to Enbridge for 99 years. However, while a lease in theory could provide for indemnification of the MBA for any liabilities, damages, or losses, these are only contractual assurances and will not prevent the MBA from being held liable for any occurrences, including catastrophic damages and losses, as owner and overseer of the project and its operation for essentially a private function. In essence, the MBA’s protection through such contractual promises is a fantasy.
“The MBA should postpone any hasty decisions that dilute its single-purpose mission to protect and maintain the Mackinac Bridge and that burden this authority for the next century to take ownership responsibility for a risky private tunnel venture,” FLOW wrote.
FLOW Executive Director Liz Kirkwood observed, “Enbridge has other alternatives not threatening the Great Lakes that this foreign corporation can and should use its own financial resources and borrowing power to apply for the necessary lands, authorizations, and permits to implement those options.”
Michigan’s legislature enacted the Mackinac Bridge Authority in 1952 for the express and singular purpose of building, maintaining, and operating the Mackinac Bridge. The bridge was opened for traffic on November 1, 1957. To this public end, the MBA has operated for more than six decades as an independent authority designed to be free from outside influence and political pressure. Each of Michigan’s governors since that time has appointed members to the MBA who have fiercely defended its independence. The MBA’s singular mission is to maintain and govern this iconic infrastructure that spans and unites our Michigan peninsulas.
In 2004, the Michigan Department of Transportation sought to increase the control of over the MBA and its engineering, finances, and employees. In response, the state legislature voted the next year in unanimous, bipartisan fashion (107-0 in the house, 38-0 in the senate) to amend to the MBA law to prohibit state government interference. The 2005 amendment expressly directs that the MBA and its core tasks must be kept “independent” and free of interference by state agencies and officials.
“The principle of MBA independence, so critical to lawmakers for six decades, is too important to be cast aside by a lame-duck governor in the waning weeks of his administration,” Olson said.
The MBA’s stand-alone powers also do not satisfy the modern legal regime designed to protect the public interest and public trust resources. For example, the MBA Act exempts the actions of the authority to transfer public lands, bottomlands, and construct the bridge from “any approvals required from state boards or agencies.” However, using the MBA Act to authorize Great Lakes oil tunnel construction would be inconsistent with the mandates, policies, and standards of the Great Lakes Submerged Lands Act; Article 4, Sec. 52 of the state’s 1963 Constitution; the 1970 Michigan Environmental Protection Act; and the 2002 Michigan statute banning oil and gas drilling under the Great Lakes.
The waters of the Great Lakes and the lands beneath them are held in and protected by a public trust, Kirkwood explained. “The public trust doctrine means that the state holds these waters and soils beneath them in trust for the public for the protection of preferred or dedicated public trust uses of navigation, fishing, boating, swimming, bathing, drinking water, and other recreation, said Kirkwood, an environmental attorney. “As a general rule, there can be no disposition, transfer, conveyance, occupancy, or use of any kind of these public trust waters and the soils beneath them, unless there is a statute authorizing this and the action predominantly serves a public interest, not a private one.”
If you live anywhere along the route of Enbridge’s Line 5 crude oil and natural gas liquids (NGLs) pipeline, which travels 547 miles across the Upper Peninsula, the Straits of Mackinac, and down through Lower Michigan, you should be asking state and local government officials and emergency responders a lot of questions. You should know whether your family’s safety is at risk. Public focus is on the environmental and economic impact of a pipeline failure and crude oil release at the Straits of Mackinac, and now, and an agreement for a possible oil pipeline tunnel in 10 years. This “tunnel vision” does not solve the human safety and property damage impacts along the other 539 miles of pipeline route, not only from a crude oil release, but also from the potential for a huge fireball resulting from an NGLs release.
The integrity of the Line 5 pipeline outside of the Straits is known to be questionable, as evidenced by at least 29 documented spills totaling 1.1 million gallons of oil, numerous repairs, and use of a lower standard of materials and construction for the single 30” pipeline compared to the twin 20” pipelines under the Straits.
photo: Bill Latka
Line 5 also transports large quantities of NGLs, a mixture of propane and butane (and perhaps ethane), which is a liquid under the pressure of Line 5’s operation and a gas when released. The NGLs composition in Line 5 as reported by Dynamic Risk Assessment Systems, Inc., the consultant hired by the Michigan Pipeline Safety Advisory Board (MPSAB) is largely propane. Propane is commonly used for home and commercial heating and chemical production, and is purchased everywhere for home barbecues. If Line 5 fails when it is carrying NGLs (which is 20% to 30% of the time), the released NGLs could quickly flash into a gas, ignite, and create a large fire. If ignition is delayed several minutes, a vapor cloud explosion and huge fireball could occur. The public safety and property damage impacts of a Line 5 NGLs release anywhere along its 547-mile length in Michigan are not being questioned vigorously enough. What would be the impact of a NGLs release, fire, and/or vapor cloud explosion?
The Dynamic Risk study included several NGLs underwater release scenarios at the Straits to determine if the resultant fireball would impact the Mackinac Bridge and people in vehicles on the Bridge. Modeling showed that a full-bore 20” pipeline failure at the bottom of the Straits could create a flame envelope of just under one mile, but not touch the Bridge. But what if you are living or traveling near Line 5 upstream or downstream of a new Straits tunnel? Line 5, along its 547-mile length in Michigan:
Travels through several populated areas along its route: Ironwood, Manistique, Engadine, Naubinway, St. Ignace, Mackinac City, Indian River, West Branch, Linwood, Bay City, Vassar, and Marysville, Michigan.
Crosses nearly 400 streams, wetlands, or other water bodies in Michigan, runs near many inland lakes, endangering fishing, wildlife, private property, businesses, riparian owners, and the public. Studies conducted for the state designate 74 water-crossing locations as “prioritized,” indicating sensitive areas vulnerable to a spill and including endangered species habitat and sites near drinking-water intake pipes. Some of the waterways include the renowned AuSable, Sturgeon, Manistique, and Rapid rivers, and the Upper Peninsula’s Lake Gogebic.
Is 65 years old, primarily designed to carry crude oil, but also NGLs, which as a gas or vapor cloud are highly flammable and explosive.
Is 30” in diameter outside the Straits, thinner, longitudinally welded, and can fail like Enbridge Line 6B did in 2010 in the Kalamazoo River watershed, which resulted in the largest inland heavy crude oil spill in U.S. history.
Has leaked 29 times upstream and downstream of the Straits, and has been dug up, inspected, and repaired due to detected “anomalies.” In May 2018, Enbridge was fined $ 1.8 million for failing to meet mandated inspection requirements imposed by a consent decree from the Line 6B disaster.
The nearly one-mile flame envelope for an NGLs release at the Straits was determined using a proprietary computer model that is widely used by industry for safety and risk management studies. Could a much larger fireball occur for a pipeline failure outside of the Straits? The answer clearly is: Yes.
An NGL release could be much larger because it would not necessarily be in deep water experiencing hydrostatic pressure resistance. NGL pipeline pressure at other locations could also be higher as a leak at the Straits would be on the low-pressure side of the Mackinac City pumping station. The distance between shutoff valves outside the Straits is also greater, which would result in larger release quantities and fireballs.
By Rick Kane, FLOW Board Member and Advisor
Citizens along the entire route of Line 5 should not be lulled into thinking that the risk is only at the Straits and that it will be solved with “tunnel vision.” What is the risk to your family and neighborhood from NGLs and vapor cloud explosion? Do you know where Line 5 is? Do local authorities and emergency responders have disaster scenario information and response plans? This information should be available to you and not out of sight due to “tunnel vision.”
Importantly, there are alternatives to the continued operation of Line 5, which is not vital to Michigan or U.S. interests, as documented in FLOW’s December 2015 report. Line 5 enables the export of Canadian oil, with Michigan being the shortcut and taking all of the risks. Don’t be lulled by “tunnel vision.”
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.
When I sat down to finish this post this morning on the news about Michigan’s agreement with Enbridge to consider replacing an aging, dangerous Line 5 crude oil pipeline through the Great Lakes basin, I realized that what I should really be writing about is yesterday’s dire warning by the U.N.’s Intergovernmental Panel on Climate Change (www.ipcc.ch/) that if citizens, countries, communities, and businesses don’t act to reduce carbon dioxide levels by 45 percent before 2030, the world will tilt over the brink of massive destruction. We’ve been warned that the earth’s temperature must not increase more than 2 degrees C by 2050. Now scientists urge countries and citizens to mount an unprecedented historical shift in human actions to reduce that limit to 1.5 degrees C by 2030. If we do not engage in this historical shift, we but more so our children and grandchildren, will suffer untold loss. The narrative is clear: Future survival and prosperity are now dependent on enlightened water and energy policies; they are inseparable.
The IPCC report concludes that, “There is no documented historic precedent” for the scale of social and technical change that must occur for the world to survive. How ironic that our Governor and state agencies, with the advice of our Attorney General, signed a second agreement with Enbridge Energy last week to assure continued use of an aged, dangerous Line 5 in the Straits, and to propose a possible replacement tunnel in 7 to 10 years that would transport light and heavy tar sands crude for the next 99 years. Michigan should not be thinking about building a tunnel for Enbridge in the next decade, we should be taking immediate action to slash fossil fuel consumption by 45 percent.
Climate change aside, Michigan faces a serious risk of disaster from the aged, and failing original design of Line 5 in the Straits. To make sure we immediately address this risk, there are some critical realities beneath the rhetoric about the agreement that must be understood and avoided. If these realities are not avoided, Michigan citizens, communities, and businesses will face two disasters—(1) the intensity of catastrophic extreme weather from climate change and (2) an oil spill from Line 5 that would wreak massive irreparable damage and loss to Lake Huron and Lake Michigan, our drinking water, ecosystem, and economy.
This is not about meeting Michigan’s needs. Our leaders signed an agreement with recitals of fact claiming that “the continued operation of Line 5… serves important public needs by providing substantial volumes of propane to meet the needs of… citizens… and transporting essential hydrocarbon products, including oil to Michigan and regional refineries.” In fact, a number of modest adjustments would deliver propane via truck, train, or 4-inch-diameter pipeline to meet the needs of our rural residents. In fact, the existing pipeline network across southern Michigan and from Pennsylvania, Ohio, and the southern U.S. will meet the crude oil needs of Michigan and regional refineries. There are sensible, less costly alternatives within this existing pipeline network that render the need for Line 5 or a tunnel under the Straits imprudent and unnecessary. A number of independent studies, including FLOW’s, and the London Economics International (LEI) have come to this same conclusion: decommissioning Line 5 is not only economically feasible but is the best alternative because it would protect Michigan’s waters and natural resources, and it would have no noticeable impact on Michigan’s economy.
Enbridge’s pledge to operate consistent with its easement cannot be trusted. The agreement contains a recital that Enbridge “continues to operate and maintain such pipelines [dual 20-inch lines in the Straits] consistent with the terms of the  Easement as part of Line 5.” In fact, the state and other organizations and reports have proven that Enbridge has violated its obligations in the Easement to prevent scouring of lakebed beneath the pipeline designed to lay on the bottom of the Straits, to exercise prudence in order to prevent harm to public and private property, and to provide financial assurances, among others. Unfortunately, it appears our State leaders would rather weaken the State’s ability to enforce the 1953 Easement.
Near-term safety measures don’t address Line 5’s failing design. The agreement contains a recital that “near-term measures to enhance the safety of Line 5, and the longer-term measure—the replacement of Dual Pipelines—can essentially eliminate the risk of adverse impacts that may result from a potential release from Line 5 in the Straits.” However, those “near-term” measures will not address the failing design of the 65-year-old oil pipelines in the Straits. The State has allowed Enbridge to install 150 anchors, with a request for 48 more, to elevate the dual lines above the lakebed as a “repair” or “maintenance” because the original, “as built” design failed to account for the scouring of lakebed under the lines. The installation of anchors elevating the lines above the lake bed constitutes a totally new or changed design of these dual lines. Worrisome currents and natural forces have pulled some of the anchors from the lakebed. Worse, the design has never been evaluated or authorized by state agencies, as required by the Great Lakes Submerged Lands Act (GLSLA) and Michigan Environmental Protection Act (MEPA). So an unauthorized, aged line will continue to operate while a longer-term tunnel will be proposed and discussed and built, if at all, in 7 to 10 years. Quite a deal for Enbridge. The company gets to run a pipeline with a failing design full-tilt in exchange for a promise to talk about the idea of a tunnel, if at all, sometime in the future. In effect, by allowing Line 5 to continue in the Straits, the agreement mostly ignores the high-risk of an oil spill causing an estimated $2 to $6 billion in damages to more than 400 miles of shoreline across upper Lake Huron and Lake Michigan.
The State cannot truthfully say the agreement protects public trust resources. The State agreed to a recital that “the terms of the Second Agreement will both protect the ecological and natural resources held in public trust…” Agreements to locate or allow occupancy of pipelines or other structures on, under, or through the bottomlands of the Great Lakes require authorization under the GLSLA. Until the Michigan Department of Environmental Quality determines that the location or occupancy of a tunnel will not promote primarily a private purpose or not impair the public trust in Lake Huron and Lake Michigan, the agreement cannot even be implemented. Why not just require Enbridge to decide for itself what it wants to do, and demand the company apply for the required determinations under the rule of law of the GLSLA? Unfortunately, State officials signed an agreement that circumvents this rule of law and deprives the public of notice, participation, and their legal right that the State enforce our laws to protect the public trust and welfare of our communities and citizens. If the law would be followed, the Second Agreement would not have ignored the independent studies; instead, the agreement appears to favor the self-serving studies commissioned by Enbridge.
The agreement commits the state to a new Line 5 segment under the St. Clair River without any environmental review. Paragraph B of the Agreement authorizes Enbridge to replace the segment of Line 5 under the St. Clair River with a new horizontal directional drilled (HDD) pipeline. In fact, the State agreed to allow Enbridge to make a substantial investment in this segment, tacitly confirming the continued existence of Line 5 for decades to come. How can our State officials commit to a new tunnel under the St. Clair River without considering and determining the risk sand alternatives to the entire length of Line 5, including the Straits? The law prohibits breaking up projects into little pieces to avoid full review of the risks, dangers, potential damages, and alternatives that would eliminate those risks. However, our State leaders allowed Enbridge to skirt the legal requirements that it must prove no more than minimal potential harm and no alternative to Line 5 (even though studies demonstrate that other alternatives exist and Line 5 is not necessary).
The State and Enbridge mistakenly claim the agreement provides for a “replacement” of the dual pipelines with an alternative Straits Tunnel in 7 to 10 years. In fact, there is no agreement or obligation for Enbridge to do anything: In paragraph I.F, state officials and Enbridge only agreed “to promptly pursue further agreements…” for “a replacement for the Dual Pipelines” in the Straits segment of Line 5. This means that Enbridge can decide not to agree to a replacement and continue operating the existing high-risk dual lines in the Straits indefinitely. It also means the State has ignored the legal requirement that Enbridge must first prove there are no alternatives to Line 5 in the Straits and Great Lakes under the GLSLA.
Paragraph I.G. of the agreement proposes a “Straits Tunnel” that is a corridor for a new Line 5 under the Straits for at least another 99 years. It is only a “proposal” and Enbridge and the State only agreed to “initiate discussions… to negotiate a public-private partnership agreement with the Mackinac Bridge Authority for locating the Straits Tunnel under the Straits of Mackinac. This means, Enbridge does not have to reach an agreement for a Straits Tunnel at all, but can continue operating the existing dual lines in the Straits indefinitely. It also means that a future “public-private partnership” (PPP) agreement will be negotiated with Enbridge and the Mackinac Bridge Authority. What exactly is a PPP?
There is no definition of what is meant by a “public-private partnership” agreement among the State, the Authority, and Enbridge. But PPPs are a flashing red warning light. PPPs substitute and favor private corporations with obligations to generate profits for shareholders for government or other publicly owned systems that by law are obligated to deliver services to the general public at cost. PPPs often involve property transfers, long term leases, and other agreements turning over public control of public lands and facilities to private interests. PPPs can be required to indemnify the government and public from liability for damages, but these agreements are often underfunded and do not supplant the liability of the state or a public body like the Mackinac Bridge Authority.
The Mackinac Bridge Authority was created by the legislature in 1952 for the sole purpose of constructing the Mackinac Bridge for the people of Michigan and the public to enjoy vehicular travel between the two peninsulas. The bridge was, and is, a public project for the traveling and motoring public. The bridge authority law does not authorize construction of a new tunnel for a privately owned pipeline company or privately owned electric utility, simply because a state utility board gives them a certificate of public convenience. These companies have an obligation to generate profits and dividends for their stockholders. The Bridge Authority has an obligation to preserve the fiscal and physical integrity of the Mackinac Bridge for the general public.
There is no requirement to shut down Line 5. In paragraph H.I there is a provision for the deactivation of the existing Line 5 in the Straits. However, it is not required unless Enbridge agrees to a tunnel, constructs one, and opens it for operation. Until that happens, there is no requirement for shutting down Line 5 in the Straits; the high risk of the aged, failing design will continue indefinitely into the future.
Enbridge’s financial assurance is at best vague and inadequate, at worst a sham. In paragraph I.J., Enbridge is supposed to provide a combination of assets and general liability insurance policies to cover a worst-case scenario risk assessment that estimates $1.878 billion in damages. In fact, another independent damage report puts the number at $6 billion, so the state accepted assurances at the low end of the range of estimated damages. Further, the estimated coverage is not adjusted for inflation over the next 10 years, and general liability policies often contain pollution exclusions that do not cover clean-up costs, restoration costs, and associated natural resource damages.
It appears the state has surrendered the water resources and pocketbook of the State and its taxpayers to Enbridge on flimsy financial assurance provisions. In paragraph I.J, the state also agreed that “Enbridge’s compliance with the requirements under this Paragraph I.J. satisfies its financial assurance obligations specified under Paragraph J of the  Easement.” In short, the State has waived its leverage to enforce the financial assurance obligation in the current Easement.
Jim Olson, President and Legal Advisor
So, here we are in a world facing a “historically unprecedented” challenge to rapidly reduce greenhouse gases, and Michigan has signed a mostly non-binding agreement for the possibility of a tunnel in 2028, the same time-frame that the state and country must slash its fossil fuel consumption by 45 percent. From an eagle’s eye view, Michigan energy policy is to foster the expansion, of production and consumption of crude oil and increase in greenhouse gases at a time when the world is on the brink. From a fiscal point of view, the agreement commits the State to an investment in a tunnel and continued high risk of catastrophic damages or loss from the existing Line 5, at a time when most likely the world and national markets for fossil fuels will decrease, likely to the point that the pipe dream for a tunnel will never happen, or if it does, the State and its taxpayers will end up with an obsolete and unaffordable relic. One way or another, citizens will suffer harm, and taxpayers will suffer loss under an Agreement that favors Enbridge, not Michigan.
Over three years ago, on July 15, 2015, the State of Michigan’s Petroleum Pipeline Task Force released its recommendations for the state to conduct an independent risk analysis and independent alternatives analysis on the Line 5 pipelines located in the open waters of the Great Lakes. The Governor’s Advisory Board, created by executive order, promised the public these two separate reports by the summer of 2017.
But just before the risk report’s release in June 2017, the state scrapped the report due to a conflict of interest involving Enbridge and the independent contractor who has simultaneously worked on Enbridge’s Line 6B pipeline. Now, three years after the initial study recommendation, we finally have the risk report estimating Enbridge’s liability at $1.8 billion for a worst-case-scenario (WCS) oil pipeline spill in the heart of the Great Lakes.
FLOW’s 2018 commissioned economic impact report (released in May 2018) — conducted by a nationally respected ecological economist and based on conservative assumptions — estimates $697.5 million in costs for natural resource damages and restoration and more than $5.6 billion in total economic impacts, including:
$4.8 billion in economic impacts to the tourism economy;
$61 million in economic impacts to commercial fishing;
$233 million in economic impacts to municipal water systems;
over $485 million in economic impacts to coastal property values.
Our FLOW team attended and testified at the state’s presentation this past Monday, on August 13, 2018, held at Boyne Highlands, and it was the first honest conversation between the state and citizens in a public forum about the real risk Line 5 poses to our waters and our way of life.
A team led by Dr. Guy Meadows of Michigan Technological University presented this independent risk analysis on its 58,000-barrel WCS disaster that would potentially affect 441 miles of Lakes Michigan and Huron shoreline in Wisconsin, Michigan, and Ontario. The Risk Analysis examined impacts to public health, drinking water, cultural resources, tourism, property values, natural resources, and economy. The report’s final section analyzed perceived risk and the social license to operate based on public opinion. To do this, the report reviewed the 45,000 comments submitted in December 2017 on Dynamic Risk’s Alternative Report, and found an overwhelming 80 percent of commentators opposed to Line 5. The reasons articulated by the opposition were grounded in sound science and law, according to Dr. Meadow’s team.
Although the dollar figures are different due to methodologies and assumptions, what the FLOW-commissioned MSU economic impact report and the state’s report demonstrate is this: Line 5 poses an unacceptable risk to the Great Lakes and the State of Michigan. Period.
The risk and potential harm unfairly burdens the citizens, businesses, and tribes of Michigan, and the freshwaters of the Great Lakes. A spill from Enbridge’s Line 5 could contaminate nearby municipal drinking water intakes, devastate some of the commercial, recreational, and tribal fisheries of the Great Lakes, kill aquatic and terrestrial wildlife, impair critical ecosystem services, diminish coastal property values, and tarnish the image of the state of Michigan and perceptions of its high levels of ecological integrity. Even bigger impacts would damage Michigan’s critical tourism industry.
The state’s risk analysis is yet another compelling reason for the state to take swift action to shut down Line 5.
In an end-run around the public participation process they established, Governor Rick Snyder and Enbridge, Inc., the owner and operator of Line 5, are exploring the possibility of building a $500 million tunnel to replace the stretch of 65 year-old Line 5 pipeline that runs under the Straits of Mackinac.
While a tunnel, properly designed and engineered, may be able to prevent harm in the event of a pipeline breach under Lake Michigan, there are compelling reasons why a tunnel should not be built.
First, the five-mile segment of a tunnel running under the Straits of Mackinac represents less than 1 percent of Line 5’s total length of 645 miles. Long segments of this aging infrastructure run parallel to the Lake Michigan coast in the Upper Peninsula, crossing 400 rivers and streams that are tributary to Lake Michigan and numerous other water bodies. Records from the Pipeline Hazardous Materials Safety Administration indicate that in the last 50 years, there have been at least 29 spills along the length of Line 5 outside of the Straits, resulting in the release of over 1 million gallons of oil and natural gas liquids.
The threats to our freshwater lakes and streams will escalate over time as the other 640 miles of Line 5 age and degrade.
Second, aside from the fact that Line 5 crosses Michigan largely to serve markets outside our state, a tunnel for Line 5 is a fundamentally unsound investment – one that is unneeded, economically imprudent, and may soon be functionally obsolete.
Major new pipeline infrastructure investments assume the continued demand for transportation fuels. But our fossil fuel-based economy is in transition and will be completely transformed within the coming decades.
Recent petroleum sector forecasts by firms specializing in energy trends like Bloomberg, Navigant, and Goldman Sachs, predict that the transition to electric vehicles will accelerate quickly with a corresponding, precipitous drop in the demand for transportation fuels.
The world’s major auto manufacturers are validating these predictions. General Motors, VW, Volvo, and others are making clear that petroleum-free electric drivetrains will dominate their future manufacturing investments and that future product offerings will not use transportation fuels.
At the same time, sovereign nations are intent on extinguishing demand for petroleum. England, France, Norway, Netherlands, Slovenia, India and China have announced their intentions to ban future sales and, in some cases, the use of vehicles with internal combustion engines. Ireland has gone even further, announcing that it will divest its sovereign interest in all oil, gas and coal.
And while Enbridge boasts that it transports 63 percent of all Canadian oil to the United States, Big Oil sees the writing on the wall. Seven international oil companies – Exxon Mobil, Conoco Phillips, Statoil, Koch Industries, Marathon, Imperial Oil and Royal Dutch Shell – will not need Enbridge’s future pipeline services as they have announced that they are writing off tar sand assets in Alberta.
The confluence of these trends will result in demand for transportation fuels declining precipitously, rendering a Line 5 tunnel project a costly albatross.
Third, climate change is the elephant in the room. Continued investment in fossil fuel infrastructure is fundamentally at odds with the global consensus on the urgent need to reduce greenhouse gas emissions. The findings of our National Climate Assessment are unambiguous – decarbonization of the global economy is an imperative, entailing a “fundamental transformation of the global energy system” to one that is no longer dependent on fossil fuels. As the need to address climate change becomes more acute, new pipelines proposals will be met with the scrutiny they deserve.
Finally, we should all be able to agree that there are exceptional places and natural features that are deserving of special protections. Just as we would not allow a foreign corporation to build a tunnel under the Grand Canyon, the Great Lakes should be off limits to fossil fuel infrastructure.
Our Great Lakes are a globally-unique natural resource, the largest interconnected freshwater system in the world, containing 84 percent of all surface water in North America. Recognizing that certain natural resource endowments are invaluable and irreplaceable gifts of nature, both state and federal law already prohibit all oil and gas development, even if done laterally from inland areas.
Skip Pruss, FLOW Chair
Building a tunnel to perpetuate Line 5 makes little economic or environmental sense. The decisions we make about how to use and protect our freshwater seas will ultimately be judged on whether they do or do not protect the ecological, social, cultural, and economic interests of future generations.
Simply put, our Great Lakes merit extraordinary protection, and their bottomlands must be off limits to oil and gas pipelines.