Now that Michigan’s governor and attorney general have sunk the oil tunnel scheme hatched by the last administration, I’m asked nearly every day: What can citizens and state leaders do to shut down the propped-up, banged-up Line 5 oil pipelines in the Straits of Mackinac for good?
Here’s my answer, as succinctly as I can distill it, accompanied by a summary of the law and political history in play.
So what should Governor Whitmer and Attorney General Nessel do?
Governor Gretchen Whitmer and Attorney General Dana Nessel must take swift and comprehensive actions to review and reverse the improper failure of the former Snyder administration to bring Line 5-owner Enbridge under the rule of law. Enbridge has had its way with Michigan’s prior elected officials, and it is time to call a halt to this nonsense. Here are the steps to getting Enbridge out of the Great Lakes for good:
Proposed Oil Tunnel:
Send a Letter: Tunnel Deal Is Dead– Governor Whitmer and Attorney General Nessel should send a formal letter to Enbridge advising the company that its agreements calling for a transfer or occupancy of the Straits of Mackinac public trust bottomlands, the new state-granted easement, and 99-year lease for the proposed oil tunnel that would house a new Line 5 are unenforceable unless Enbridge has obtained authorization under state law – the Great Lakes Submerged Lands Act (GLSLA).
Line 5 in the Straits:
Send another Letter: No Life Support for Line 5 – Governor Whitmer and the Michigan Department of Environmental Quality (DEQ), along with Attorney General Nessel, should send a letter to Enbridge advising it that the agreements purporting to grant Enbridge occupancy and use of waters and bottomlands the existing Line 5 for 10 years or more are unenforceable, because the former administration and Enbridge failed to obtain the required authorization under the GLSLA.
Apply the Law to the Redesign of the Ailing Pipelines – Governor Whitmer and the DEQ, along with Attorney General Nessel, should investigate and correct the lack of review and showings required by the GLSLA and public trust law for the substantial change in design implemented for the 3 miles of pipeline elevated above the lakebed under the guise of “repair.”Enbridge should be instructed that it must show the risks and magnitude of harm are minimal and that there exist no other alternative than the existing line in the Straits or Great Lakes.
How Did We Get Here on Line 5? Tracing the Law and the Politics
The plotting of former Governor Snyder’s administration and Enbridge to hand over the public trust soils and bedrock under the Straits of Mackinac for the company to build and operate a new crude oil pipeline in a tunnel for 99 years has been put on hold.
On her first full day in office, Governor Gretchen Whitmer asked Attorney General Dana Nessel for a formal opinion on whether the Snyder-Enbridge agreement and legislature’s stamp of approval through a lame-duck law known as “Act 359” to hand over the Straits for Enbridge’s tunnel to Enbridge was constitutional.In late March, Attorney General Nessel found it was not constitutional because the legislature tried to graft a private tunnel-pipeline project onto a public infrastructure law that governs a public icon—the Mackinac Bridge.
Revoke the Easement – Attorney General Nessel along with the Department of Natural Resources (DNR), along with the above actions, revoke the 1953 easement because under the current circumstances the existing Line 5 is no longer in compliance with the common law standards of the paramount interests of the Great Lakes protected by public trust law; if Enbridge desires to continue using the existing line in the Straits, the company must submit an application for authorization of such use and occupancy along with the authorizations identified in this list.
Increase Insurance Requirement and Verify It – Governor Whitmer, the DEQ, and the DNR, with the Attorney General, should require Enbridge to submit financial assurances that cover the worst case economic and natural resources damages of at least $6 billion (significantly more than the current cap of $1.8 billion), retain qualified experts to determine the adequacy of those assurances, and require Enbridge to name the State of Michigan as an “additional insured” and/or “named insured” on its insurance coverage for Line 5. Inadequate insurance is another cause for revoking the easement.
Once the Governor and Attorney General do these things, they will have taken action consistent with their pledge in being elected to lead the State and protect the Great Lakes, by nullifying the improper actions and agreements of their predecessors and bringing Enbridge, finally, under the rule of law. Regardless of the outcome, the interested parties, communities, and persons in this controversy and the government will be required to make determinations concerning the fate of Line 5 in an open forum based on facts, science, and law.We are ruled by law, not by self-serving agreements that were plotted to avoid it.
Given President Trump’s executive orders this week to water-down or smooth over federal laws and regulations affecting water, the Great Lakes, and pipelines, it is more critical than ever that Governor Whitmer and Attorney General Nessel exercise the full jurisdiction and authority they and the State of Michigan under its exclusive power over use of the waters and bottomlands of the Great Lakes, its lakes and streams, public lands, and the public trust in the Great Lakes and navigable waters and public common property of Michigan. This trust imposes a duty on our leaders to protect the interests of citizens, the legal beneficiaries of this trust. Not the President, not Congress, not federal agencies, or state government can repeal, limit, or narrow the state’s duties and citizens’ individual and common rights under this public trust.
What Should Citizens Do?
It is quite simple: Citizens should do what they always do best. Continue to stay involved, increase communications to Governor Whitmer, Attorney General Nessel, and the Director of the DEQ, and the DNR.These communications should do the following:
In the wake of an opinion by Attorney General Dana Nessel invalidating a law that sought to give away Great Lakes public trust bottomlands to Enbridge for 99 years for a private oil tunnel, Governor Gretchen Whitmer has now ordered state agencies to pause permitting on Line 5, an action hailed by FLOW (For Love of Water), a Great Lakes law and policy center based in Traverse City.
“We welcome the Governor’s swift, prudent action to halt the legal effect of the law and tunnel and side agreements,” said Jim Olson, founder and president of FLOW. “Now, it’s time to bring the existing perilous Line 5 in the Straits under rule of law and decommission it as quickly as possible.”
“The backroom deals creating Enbridge’s proposed oil tunnel couldn’t survive public scrutiny, and now we know they can’t survive the rule of law,” said Liz Kirkwood, Executive Director of FLOW. “It’s time to focus on Michigan’s true energy future and protect Michigan’s Great Lakes and our economy from a Line 5 pipeline rupture. The path forward for Michigan is for Gov. Whitmer to immediately begin the process of decommissioning Line 5 in the Straits of Mackinac.”
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.”
This is the first in a series of essays by FLOW board member Rick Kane on the vital issues of risk management and the responsibilities of public officials under the public trust doctrine. The issue has special meaning in light of the risks posed by the twin Enbridge pipelines that convey 23 million gallons of petroleum products through the Straits of Mackinac daily. 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.
Managing Risk and the Public Trust
Every day, we manage risk in our personal lives and for our families. I wonder what the weather will be like today; what should I wear, or do I need to prepare differently for my trip? There are consequences for not preparing, like getting wet, but the weather forecaster helps by providing the probability for rain and threat of severe weather. We listen, assess the risks, consider alternatives, and make a decision.
Envisioning scenarios, forecasting, and assessing risk are management activities performed in a variety of organizations. If the risks are too high, we take action to reduce them or, better yet, implement an alternative that eliminates the risk entirely. Alternatives analysis is a known but underutilized approach. Too often, organizations reduce risk by making incremental changes and not by using an alternative that could eliminate it. “It is not acceptable to harm people when there are reasonable alternatives - - - - It is not acceptable to harm the environment when there are reasonable alternatives.” In her book, Making Better Environmental Decisions, An Alternative to Risk Assessment, scientist and risk expert Mary O'Brien promotes alternatives - not just accepting risk assessments and incremental risk reduction strategies, i.e. identify and implement risk elimination alternatives.
For the big risks, we depend on elected officials and government regulators to take action in the best interest of public safety, environmental protection and economic interests. The Public Trust Doctrine is an important legal principle that they are required to apply to protect the waters of the Great Lakes. Risk and alternatives assessments are vital inputs needed to reach appropriate decisions under public trust law.
The Public Trust Doctrine holds that government has a solemn obligation to protect the waters of the Great Lakes in perpetuity for public use and enjoyment. The state serves as a trustee and is accountable for managing the waters for the benefit of current and future generations. Any private, public, or commercial existing or proposed use, diversion, or discharge cannot cause harm by materially reducing the flow, changing the levels, or polluting the waters. Those who seek to use, continue to divert, or alter the waters have the burden of proof to show they will not impair, pollute, or cause harm, or the proposed action is not permitted. Under the public trust, the waters can never be controlled by or transferred to private interests for private purposes or gain. Public rights cannot be alienated or subordinated by our governments to special private interests. This means that all reasonable private use and public uses may be accommodated so long as the public trust waters and ecosystem are not harmed and paramount public right to public uses are not subordinated or impaired.
For government officials, it is a duty to comply with the Public Trust Doctrine and ensure that the principles are followed. Citizens should understand public trust and hold their elected officials accountable for protecting the waters of the Great Lakes on their behalf and for future generations.
It Takes All Kinds
Growing up in the chemical industry, working in the private, government and non-government sectors taught me that a balance between the sectors is required to obtain feasible and acceptable outcomes. Private companies cannot be relied upon to self-regulate as not all of them have everyone’s best interest in mind. But private sector technical experts are positioned to identify feasible, safer technologies and alternatives. They may also need to be pushed to implement them by shareholders and regulators. Elected officials and government regulators can ensure that the competitive field is level for industry players and that companies are following the rules.
But there are cases where rules go too far, resulting in unintended consequences. Professional societies and standard-setting organizations provide direction to scientists, engineers, and member professionals on ethics and best practices that they should be applying on the job; strong, ethical professionals make strong organizations. And non-government organizations (NGOs) promote public, social, and long-range goals, but there must also be a balance and analysis for unintended consequences.
Taking a systems or macro/micro view is also very important in assessing risk and alternatives. Limiting the boundaries of study or scope prematurely can result in flawed and fatal conclusions. Here is an example that affected a large part of the world.
When Things Go Wrong, and Hindsight Is 20/20
Risk management involves the use of simple to very complex methodologies. However, they all depend on a proper definition of the scope of study, the system, relevant facts, key assumptions, and taking action to fill in important information gaps. Flawed assessments result when the scope of studies are too limited, methodologies are inappropriately modified or faulty, biased assumptions are used. O'Brien’s book provides an excellent overview on where risk assessments can go wrong.
The Daiichi Nuclear Power Plant Disaster was the second worst in history, just behind the April 1986 Chernobyl disaster. We use the Fukushima incident in teaching risk and process safety management. The Daiichi nuclear reactors were located on the Japanese coast and designed to withstand an earthquake and tsunami. The actual earthquake was larger than the safety design basis and the tsunami higher. The earthquake/tsunami triggered a number of failures that all had the same origin, in risk analysis terminology, “a common cause failure” – the earthquake/tsunami.
For safety, the reactors had a “layered or defense-in-depth” design to enable a safe shutdown in emergencies. But:
1st line - electrical supply from off-site to power the cooling water pumps, this supply was lost in the initial earthquake.
2nd line - emergency generators installed with the electrical switchgear in the basement, which flooded along with the generator fuel tanks when the tsunami hit.
3rd line – the battery back-up system did not have enough capacity to enable completion of the shutdown.
And the emergency response was delayed because the company and country thought they could handle the incident on their own and did not want to admit how bad things really were.
In hindsight, the consequences of a nuclear meltdown were known, but could a better assessment have been done for the threat of locating the facility near the coast in an earthquake, tsunami prone area? What about the vulnerability analysis on the emergency shutdown systems and consideration of common cause failures? Was the “worst-case scenario” analysis faulty or biased for some reason? Today, parts of the area are still uninhabitable, although some residents have recently begun to return even when warned that radiation levels are still above safe levels. What next as this disaster continues?
Acceptable risk levels are based on the stakeholder’s tolerance for the risk. For example, for some citizens, an acceptable flood risk might be once every 500 years, while the acceptable risk of a human fatality from an industrial accident might be less than the probability from natural causes, say one in one million.
Risk assessments may be required to comply with federal, state, and/or local laws, insurance company policies, or company procedures. There are ethical principles: you cannot impose risk on someone else, and elected officials and government regulators have a duty to protect constituents and the environment. If you cannot live with a risk because the consequences are too high, then you must identify and implement an acceptable alternative. A Michigan high-risk and controversial example is the Enbridge pipeline.
Here are key terms in risk management:
Risk is a measure of human injury, environmental damage, or economic loss in terms of the likelihood that an incident will occur (probability) and the magnitude of the injury or loss (consequence).
Risk = Probability x Consequence
Probability can be further defined as a function of the threat, an event with the potential to cause loss or damage and the vulnerability, which is any weakness in the system or asset, that can be affected or exploited by accidental, natural, or man-made causes resulting in the harm. Thus, risk can then also be defined as:
Risk = Threat x Vulnerability x Consequence
Toxicological Risk Assessments for human health and living organisms define threat and vulnerability in terms of exposure and dose-response assessments to a harmful substance.
An Exposure assessment covers the most significant sources of environmental exposures, population potentially exposed, and concerns about cumulative or multiple exposures.
For a dose-response assessment, a dose-response curve for the route and level of exposure observed is developed and compared to the expected human or living organism exposure in the environment.
Risk assessments follow a stepwise process and can be a qualitative, judgement-based analysis, or a complex quantitative mathematical analysis.
Scope, System Boundaries, Macro/Micro, and Dynamics- When conducting a risk assessment, the definition of the scope (subject of study), system boundaries, and dynamics are extremely important. Events occurring outside of the boundaries and transitions affect risk. Major risks can be transient and occur during take-off and landing, start-up and shutdown, transition from one physical state to another, movement from one place to another, under certain weather conditions, and so on. AIChE, Center for Chemical Process Safety
The risk assessment process is known as Hazard Identification & Risk Assessment (HIRA, shown below). If the level of risk after one pass is not acceptable, risk reduction measures are added, and the process is repeated until an acceptable level of risk level is achieved; if not, a better alternative is pursued, and the current approach abandoned.
The Enbridge Pipeline - Line 5 Across the State of Michigan
Enbridge’s Line 5 is a 66-year-old pipeline that transports crude oil and natural gas liquids (NGLs) across the State of Michigan from Superior, Wisconsin to Sarnia, Ontario. From Superior to St. Ignace, Michigan, Line 5 is a 30-inch pipeline but divides into two 20-inch pipelines which then pass along the bottom of the Straits of Mackinac and merge back into a 30-inch pipeline west of Mackinaw City to Sarnia. Many studies have been conducted on the 20-inch pipelines at the Straits covering environmental and economic risks, pipeline mechanical integrity, structural modifications, failure modes, and numerous legal issues. And recently, the State of Michigan signed a new agreement for a study on replacing the twin pipelines with a new pipeline and tunnel under the Straits. Information can be found at on the FLOW and Michigan Pipeline Safety Advisory Board websites.
The Streetlight Effect
The streetlight effect, or the drunkard's search principle, is a type of observational bias that occurs when people only search for something where it is easiest to look. Both names refer to a well-known joke:
A policeman sees a drunk man searching for something under a streetlight and asks what the drunk has lost. He says he lost his keys, and they both look under the streetlight together. After a few minutes, the policeman asks if he is sure he lost them here, and the drunk replies no, and that he lost them in the park. The police officer asks why he is searching here, and the drunk replies, "this is where the light is."
The risk analyses have primarily focused on the twin 20-inch pipelines and consequences of a crude oil release. However, the system risk must include the entire pipeline and products transported. The design, fabrication and protection technologies of 30-inch pipelines above and below the Straits are at lower standards than the 20-inch pipelines. There have been at least 29 leaks in Line 5 and a history of ongoing repairs and patching. The replacement of the 30-inch pipeline would be a huge expense and most likely be implemented after a tunnel project is started. The risks and lack of discussion (unknowns to the public outside of the Straits) were previously noted by FLOW. Living Along Enbridge Line 5 in Michigan.In only looking at the problem as being under the Straits, consider the allegory "The Street Light Effect."
A Confined Scope– assessments with scopes that are too narrowly defined restrict the consideration of alternatives and opportunities to eliminate risk. There are continuing strong arguments that feasible alternatives to Line 5 exist and that the pipeline can be decommissioned on a priority basis. This analysis is beyond the scope of this article, but details can be found at: FLOW Alternatives Report 2015
Poor System Definition - system boundaries for Line 5 risk assessments have been limited to the 20-inch pipelines, as this is where the State of Michigan has authority and control over the Mackinac Straits bottomlands, i.e. the system study boundary is being set where there is legal control, not where the full existence of risk occurs. This in turn establishes a crude oil release as the primary threat because the consequences of a natural gas liquids (NGLs), (a mixture of largely propane with some ethane and butane), release would be small in comparison. Thus, this is a legally defined system and not one based on Line 5 system risk to human safety, the ecosystem, and economy. An NGL release poses a major risk to human safety and infrastructure along the entire Line 5 route. The risk is not transparent to the citizens of Michigan (only looking under the streetlight); they are not provided information on known unknowns and a consideration of possible unknown unknowns.
In terms of the risk equation- Risk = Threat x Vulnerability x Consequence
What are the consequences, threats, and vulnerabilities outside of the Straits? For example, the impact of an NGLs leak.
Consequences - Line 5 travels near several populated areas: Ironwood, Manistique, Engadine, Naubinway, St. Ignace, Mackinaw City, Indian River, West Branch, Linwood, Bay City, Vassar, and Marysville, Michigan, and it transports NGLs about 20-30% of the time. NGLs are a liquid under Line 5 operating conditions but would flash into a vapor cloud if a leak occurred. According to the Dynamic Risk Assessment Systems, Inc. study contracted by the Michigan Pipeline Safety Advisory Board (MPSAB), a large underwater release under the Straits could create a flame envelope of just under one mile. But what if you are living or traveling near Line 5 upstream or downstream of the Straits? A ground level release and fireball could be much larger as the pipeline pressure is higher and distance between emergency shutoff valves greater.
For a crude oil release, Line 5 crosses nearly 400 streams and wetlands and runs near many other sensitive public and environmental areas. Studies conducted for the state designate 74 water-crossing locations as “prioritized,” indicating sensitive areas vulnerable to a spill and including endangered species habitats 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.
Defining the system in terms of legally controlled boundaries results in the risk to areas outside of the Straits being overlooked. In addition, the December 2018 Enbridge-State agreement enables threat to continue until at least 2024 as tunnel studies are conducted, and beyond if a tunnel project is launched. Meanwhile, the threats outside of the Straits continue.
Vulnerability to failures outside of the Straits have many known unknowns and possible unknown unknowns due to different operating conditions, design and maintenance and inspection programs, and environmental exposure conditions. For the public, there should be many questions, but unfortunately, with the focus on only the Straits, under the street light, citizens do not know that they should be asking safety questions.
Here Are Some Starting Questions
What are the risks for a release upstream or downstream of the Straits, especially for NGLs? What is the safety risk to populated areas from a fireball and the lakes and rivers to a crude oil spill? What are the plans to mitigate the risks now, with and without a tunnel project?
Rick Kane, FLOW Board Member
Based on the agreement signed by the State, current operations at the Straits can continue to 2024 and beyond with minimal additional monitoring and on-site emergency response. Why are “extraordinary” emergency response measures not required to counter the extreme consequences that would occur at the Straits? This is a normal requirement in other high consequence, non-mitigated risk situations.
What are the plans for the entire pipeline system, especially outside of the Straits where the design and mechanical integrity is known to be less than at the Straits? Should citizens expect a segment by segment replacement as was done on Line 6B/78 in southern Michigan?
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.”
FLOW Executive Director Liz Kirkwood testifying Dec. 11, 2018, at the Michigan House of Representatives Government Operations Committee.
FLOW Deputy Director Kelly Thayer testifying Dec. 11, 2018, at the Michigan House of Representatives Government Operations Committee.
In coordinated fashion, the Michigan’s lame-duck legislature on Tuesday and governor today opened the flood gates to a 99-year deal for a Canadian oil tunnel under the Great Lakes.
Their vision would lock in a century of oil transport through the Mackinac Straits when scientists agree that the world has a decade or so to change to renewable energy sources or face intensifying rounds of extreme storms, heat, floods, and drought from a changing climate.
Despite reasoned and compelling appeals (see video at 10:56 mark here) from businesses, environmental advocates, and current and former members of the Mackinac Bridge Authority, state lawmakers on Tuesday rushed the tunnel bill in just hours through committee and full House on a 74-34 vote and Senate 25-12, with behind strong lobbying for the tunnel by Enbridge, the Michigan Chamber of Commerce, and groups representing labor, energy, and infrastructure. (See how state Senators voted here on page 2118 and state House members here on page 2536.)
Representatives of FLOW testified against Senate Bill 1197, and were joined in Lansing by tribal leaders and leaders of Oil & Water Don’t Mix, Great Lakes Business Network, Michigan Environmental Council, Clean Water Action, Mackinac Straits Alliance, National Wildlife Federation, Groundwork Center, Friends of the Mackinac Bridge, Michigan League of Conservation Voters, Michigan League of Women Voters, Sierra Club, and more.
Today (Wednesday), Gov. Snyder signed the legislation, and then appointed the three members to the Mackinac Straits Corridor Authority Board created in the new law. The law calls for either the Mackinac Bridge Authority or the MSCA by December 21 to receive from Gov. Snyder a draft agreement with Enbridge for the authority board to sign by December 31, leaving just days to negotiate the details regarding legal, fiscal, and liability concerns tied to the state owning the tunnel and leasing it for 99 years to Canada's Enbridge.
The Governor’s latest draft agreement with Enbridge is expected to authorize the company to continue operating its decaying oil pipelines in the Straits for 10 years or more while Enbridge considers whether or not to build the tunnel. The Line 5 pipelines threaten the drinking water source for half of Michigan residents and risk a $45 billion blow to shipping and the steel industry. Line was built in 1953 and is 15 years past its life expectancy and carrying 80 percent more oil than called for in the the original design.
The rapid-fire political moves come as departing Gov. Snyder and state lawmakers race to lock in agreements and laws to limit the choices and powers of incoming Gov. Gretchen Whitmer and Attorney General Dana Nessel, who have publicly opposed the tunnel and Line 5 continuing to pump oil through the Mackinac Straits.
Enbridge's dual Line 5 pipelines in the Mackinac Straits push up to 23 million gallons of oil and natural gas liquids daily through in the Straits of Mackinac, where Lake Michigan meets Lake Huron. Line 5, which begins in Superior, Wisconsin, and ends in Sarnia, Ontario, is a link in Enbridge's vast North America network.
A view from the Mackinac Bridge of the Straits of Mackinac, just east of where the Enbridge Line 5 oil pipelines (not visible) cross along the bottom.
Action Expected Dec. 11 in House, After Michigan Senate Passes Oil Tunnel Bill Still Tied to the Mackinac Bridge
The Michigan Senate on Wednesday, December 5, voted 25-13, mostly along party lines with Republicans in favor, to pass a hastily revised “substitute 2” version of Senate Bill 1197 – the Line 5 oil tunnel bill – that utterly fails to protect the Mackinac Bridge, the Great Lakes, or Michigan taxpayers. (You can click here and go to page 1977 to see how each Senator voted).
Sobering news in the Senate
After a flood of public opposition to the proposed oil tunnel being owned and run by the same state authority board that owns and operates the beloved Mackinac Bridge, the Senate made and approved quick revisions that attempted, but failed, to address that concern – contrary to widespread reporting.
The resulting bill, which was not made public until after it passed, leaves the Mighty Mac in peril, taxpayers on the hook, and the Great Lakes at increased risk of an oil spill disaster during the decade that Enbridge would be granted to keep running the damaged Line 5 in the Mackinac Straits while deciding whether or not to build a tunnel.
The very first line of the passed bill, with changes indicated in capitals in the original text, says, “An act authorizing the Mackinac bridge authority to acquire a bridge AND A UTILITY TUNNEL….” And then in a new Section 14, the bill states at the outset, “THE MACKINAC BRIDGE AUTHORITY MAY ACQUIRE, CONSTRUCT, OPERATE, MAINTAIN, IMPROVE, REPAIR, AND MANAGE A UTILITY TUNNEL.”
A few paragraphs later, the bill says that these powers over the proposed tunnel eventually will transfer to the Mackinac Straits Corridor Authority, which does not exist yet. To get past that stumbling block, the bill gives all the powers, and likely all the liability too, to both the existing Mackinac Bridge Authority and the anticipated one, and declares the problem solved. The bill also anticipates draining $500,000 a year from Mackinac Bridge revenue, which is earned by allowing fiber optics to cross the bridge that instead would be moved to the tunnel.
The ill-conceived and unconstitutional Senate bill is the key vehicle in a Republican-led race to guarantee a private oil tunnel for Enbridge under the Mackinac Straits before January 1, when incoming Governor Gretchen Whitmer and Attorney General Dana Nessel – both of whom are Democrats and tunnel opponents – take office.
In addition to risking the Mackinac Bridge, Michigan Senate Bill 1197:
Gives a shareholder-owned foreign company free access to the public’s Great Lakes water and bottomlands, untold millions of taxpayer dollars for state oversight (Gov. Snyder has requested $4.5 million in public funds so far) and a legal defense fund, and some cover from liability as the state takes on ownership of infrastructure that poses a risk to leak and/or explode, cripple the regional economy, and pollute the drinking water for Mackinac Island, St. Ignace, and half of all Michiganders.
Increases the odds of a catastrophic oil spill in the Mackinac Straits, where Lake Michigan meets Lake Huron, by allowing the cracked and dented Line 5 pipelines at least another decade of non-stop oil pumping through 2028, when Line 5 would be 75 years old, while Enbridge considers, but is notrequired to build, a tunnel.
Requires the as-yet non-existent Mackinac Straits Corridor Authority to approve by December 31– less than four weeks from now – a series of agreements being negotiated by the Snyder administration in private with Enbridge for building the tunnel, deeding it to the state, and then leasing the tunnel back for 99 years. The secret process shuts out lawmakers, citizens, businesses, and tribes from the opportunity to review, understand, and oppose or strengthen the pacts to benefit the public.
Reasons for hope in the House?
Action now moves to the state House of Representatives, where a number of lawmakers in both parties have previously raised concerns about Senate Bill 1197’s potential impact on the Mackinac Bridge, Michigan taxpayers, and the Great Lakes, which provides drinking water for half of Michiganders. Initial information suggests we have a few days to regroup and reach out to state Representatives. The Enbridge oil tunnel bill likely will be taken up on Tuesday, December 11, by the Michigan House Government Operations Committee, which is chaired by Rep. Lee Chatfield.
We urge you to contact Rep. Chatfield and other members of the committee with your concerns, using our bulleted list from above. In addition, if your state Representative is not on that committee, you can contact your lawmaker using this lookup, in anticipation of the bill in some form possibly clearing committee next week and reaching the full House.
And please know that your email or call makes a difference and is magnified by all of the other supporters of FLOW and our allied groups , families, businesses, and governments in the Oil & Water Don’t Mix campaign, which is co-directed by FLOW, and many others united by the threat from the oil tunnel scheme. Simply put, the Great Lakes belong to all of us, and FLOW and our partners are working to keep it that way.
Substitute Bill SB 1197 continues to be riddled with faulty assumptions and logic that favor and bend towards Enbridge’s private corporate shareholder interests. Most glaring of all is the audacious and misguided underlying assertion that we humans will continue to rely on a fossil fuel based economy over the next 99 years (the length of the proposed tunnel lease agreement between Enbridge and the State of Michigan).
The proposed tunnel agreement apparently is supposed to create “a mechanism to ensure that a utility tunnel is built with sufficient technical specifications and is maintained properly to ensure a long asset life and secondary containment for any leak or pollution from utilities using the tunnel.” 14(D)(4)(D).
Given accelerating trends in fossil fuel divestment, finance and asset management, and the electrification of transportation, continued investment in fossil fuel infrastructure is a risky proposition and completely at odds with the urgent and universally recognized need to reduce GHG emissions.
Accordingly, there is no realistic “mechanism” that Enbridge and the State of Michigan can craft to “ensure a long asset life” for Enbridge’s Line 5 pipeline tunnel wish.
FLOW’s chair, Skip Pruss, documents the fundamental energy shift we are seeing right before our eyes and explains why we must not invest in multi-billion fossil fuel infrastructure assets like a new Line 5 pipeline tunnel under our Great Lakes. In fact, Skip points out that even the world’s leading oil producers are abandoning the tar sands investments that drive Enbridge’s Canadian oil transport roadmap into North America and the Great Lakes.
Finance/Asset management – Asset managers are under increasing pressure to divest fossil fuel holdings. As of 2018, nearly 1000 institutions have pledge to divest $6.24 trillion in fossil fuel assets. Examples include the Norwegian Sovereign Wealth Fund ($910 billion), the Rockefeller Family Fund and the California Public Employees Retirement System fund ($292 billion). Over 120 universities and colleges have committed to fully or partially divest their holdings in fossil fuel companies.
Investment trends – Global investment in renewable energy exceeded $333 billion in 2017while investment in fossil fuels and nuclear energy totaled $144 billion. At the same time,
A recent WSJ analysis indicates shale oil and gas sector has lost $280 billion since 2007.
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.
New Zealand and Ireland have recently announced there intentions to decarbonize their economies.
Xcel Energy, electricity provider to eight states, announced that it will end the use of fossil fuels decarbonize its entire electric generation capacity.
Electrification of transportation– 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. VW alone, intends to invest $84 billion in transitioning to electric vehicles.
England, France, Israel, Norway, Netherlands, Slovenia, India, Egypt, 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.
Liz Kirkwood, Executive Director
Climate change has also increased actuarial uncertainties. The increasing frequency and severity of storm events necessitates recalibration of analytical models predicting impacts and losses. Insurance industry regulators are imposing more rigorous disclosure requirements and improved assessment and management of investment portfolios to mitigate risk. Moody’s Investors Service, announced recently that it would give more weight to climate change risks in evaluating the creditworthiness of state and local governments.
Skip Pruss, FLOW Chair
In sum, the facts simply don’t add up to justify the State of Michigan investing with Enbridge to construct a pipeline tunnel for the next 99 years. At this time in history, we must pivot and focus on solving complex systemic anthropogenic climate change impacts, rather than further contributing to it. Let’s encourage our Michigan leaders to put the interests of the Great Lakes and its people and tribes first by planning for our energy transition and inevitable future.