Enbridge Inc. won an environmental round in Michigan on Friday to keep its 540,000 b/d Line 5 oil pipeline running by securing state water permits to bury the pipe leg across the Straits of Mackinac.

The Michigan Department of Environment, Great Lakes and Energy (EGLE) approved the $500 million conduit. Regulators said “the proposed tunneling project would have minimal impact on water quality in the Great Lakes and would not affect protected public uses of Michigan’s water resources.”

Enbridge said the EGLE permits “are an important milestone for the tunnel project and are part of the process to authorize its construction.” Still needed are permit approvals from the Michigan Public Service Commission and the U.S. Army Corps of Engineers.

The Calgary-based pipeline conglomerate said the environmental decision does not end a duel in state and federal courts over moves to shut down Line 5, as proposed in November by Gov. Gretchen Whitmer and Attorney General Dana Nessel. The officials want the pipeline shuttered in May.

“Such a shutdown before the completion of the Great Lakes tunnel project would lead to major energy shortages in the region and severe economic consequences for Michigan, neighboring states and Canada,” said Enbridge.

While it approved the water permits, EGLE regulators agreed with claims that Line 5’s 68-year-old underwater Straits crossing poses a pollution hazard. EGLE said it “affirmed the Michigan Department of Natural Resources’ conclusion that the current pipeline violates the Public Trust Doctrine” in the state’s constitution, and “poses an unacceptable risk to the Great Lakes.”

EGLE attributed the favorable decision on the project to its regulatory mandate.

“Although this proposed tunnel project has illuminated numerous related policy issues, the basis for our decision is required to be limited to compliance with the relevant environmental statutes created by our legislature,” said EGLE director Liesl Clark.

“We have issued permits designed to ensure that if a tunnel is constructed, it will be in strict compliance with relevant statutes and adhere to stringent protections against impacts to the Great Lakes.”