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Michigan Readying Propane Trains, Storage to Fill Supply Gap Pending Line 5 Shut Down
Michigan officials said they would have propane supply security with trains and storage available if Enbridge Inc. shuts down deliveries in May on Line 5, the Canadian oil and natural gas liquids (NGL) system.
Line 5 flows 540,000 b/d, including 75,000 b/d of propane for about 55% of Michigan needs, led by two-thirds of requirements in northern parts of the state. The line also delivers NGLs to Ontario and Quebec.
About half of the fuel supply at the Detroit airport is refined from oil delivered by the 68-year-old pipeline. Canada’s biggest airport in Toronto also relies on the endangered pipeline for all of its fuel.
However, Michigan Gov. Gretchen Whitmer sent industry “clear market signals” to devise alternatives to Line 5, according to the Michigan Public Service Commission (MPSC).
“Gov. Whitmer has maintained a consistent goal for Line 5: shut down the oil pipelines that run through the Straits of Mackinac as quickly as possible, while securing the state’s energy needs,” according to the state’s six-page supply security plan released Friday.
“Michigan can no longer bear the risk of a catastrophic oil spill in the Great Lakes that would jeopardize our work, waters and way of life. And regardless of Line 5’s future, Michigan cannot achieve energy resilience for residents who rely on propane without alternative means of supply.”
Enbridge has requested an injunction from the U.S. District Court for the Western District of Michigan to prevent the state from shutting down Line 5 by revoking the 1953 state easement for its underwater leg across the Straits of Mackinac.
“The attempt to shut down Line 5 interferes with the comprehensive federal regulation of pipeline safety and burdens interstate and foreign commerce in clear violation of federal law and the U.S. Constitution,” the Calgary-based pipeline conglomerate said.
Enbridge is seeking to enforce a 2018 agreement with Michigan’s previous administration that would save Line 5 by allowing it to bury Mackinac crossing in a $500 million utility tunnel. The state assembly had ratified the deal.
State courts have rejected claims that the tunnel package violated Michigan’s constitution. Michigan courts have also upheld federal jurisdiction over safety aspects of Line 5, as exercised by the Pipeline and Hazardous Materials Safety Administration. The Michigan Department of Environment, Great Lakes and Energy recently granted a construction permit for the tunnel.
The MPSC plan would provide market monitoring, $15 million worth of railway and storage facilities, energy assistance eligibility for low-income households, $10 million in aid for home fuel efficiency renovations, and a proposal for a state strategic propane reserve.
“This plan protects propane customers from price gouging,” said the MPSC. The plan also “sends clear signals to encourage market participants to invest in alternative sourcing options; ramps up state investment in rail and propane storage infrastructure; increases state monitoring of the propane industry and coordinates the response to potential disruptions; and sets a long-term path to lower energy costs through investments in renewable energy, energy efficiency and electrification.”
Commission Chair Dan Scripps said the five-point approach “will allow us to better protect consumers and ensure that Michiganders have access to the energy resources on which they rely.”
Michigan Department of Transportation director Paul Ajegba also called it an opportunity to improve energy security.
“As we move forward with repairing and improving our infrastructure across the state, this moment creates an opportunity for us to increase reliability and resiliency in our energy delivery systems,” he said.
In Canada, calls for help by a cross-section ranging from farmers and industrial unions to Ontario’s Conservative government have ignited a campaign to save Line 5’s U.S. section by the national Liberal administration, using political lobbying and formal diplomacy.
Reaction to Whitmer’s plan was not welcomed by the Consumer Energy Alliance (CEA), which advocates for consumers, farmers, small businesses, distributors, producers and manufacturers toward what it said is an environmentally sustainable energy future.
“It is a sad day in America when a governor acts recklessly and indifferently to the needs of real people who will ultimately pay the consequences,” CEA Mid-West Executive Director Chris Ventura said. “Our policymakers should not be beholden to special interest groups dictating how we should live.
“It’s hard to imagine a worse ‘ready, aim, fire’ idea, especially since there is already a workable, environmentally sound and bipartisan solution in place if the state would just allow the Line 5 Tunnel Project to move forward.”
Ventura said the Michigan regulator’s plan was unrealistic.
“Government orders and mandates are not market signals” in the United States. “The market has already spoken and it is the reason that the Line 5 Tunnel Project was proposed years ago and is funded by private sector investment. If this administration had continued to act in good faith on this bipartisan plan, we could be halfway through building the tunnel right now, at no additional cost to taxpayers.”
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