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MOSCOW (MRC) -- Enbridge said it will
defy the state of Michigan's order to shut down its Line 5 crude oil and propane
pipeline system by May, and will instead challenge Gov. Gretchen Whitmer's
permitting revocation in federal court, reported S&P Global.
Enbridge's Jan. 12
letter to the Democratic governor comes in response to Whitmer's decision in
November 2020 to yank the Line 5's 1953 easement from when the pipeline system
first came online, citing safety violations. In doing so, Whitmer said the dual
pipelines had to close by May. The state also filed a lawsuit seeking legal
recognition of the shutdown order.
Whitmer and Enbridge have maintained a
confrontational relationship since she took office in the beginning of 2019, and
tensions escalated last summer when the 540,000 b/d Line 5 was partially
shuttered for much of this summer after an anchor support for the pipeline was
damaged and eventually repaired.
The 645-mile line stretches from
Wisconsin through Michigan and into Ontario, and is part of Enbridge's larger
Mainline and Lakehead systems. Enbridge's planned Line 5 tunnel replacement
project under the Great Lakes' Straits of Mackinac has progressed despite state
opposition, although project completion is not expected until late 2024,
according to Enbridge.
In terms of the more immediate fight, Enbridge
said it has no intention of shutting down the Line 5 system because it said the
state's unspecified allegations are baseless.
"Our dual lines in the
Straits are safe and in full compliance with the federal pipeline safety
standards that govern them," wrote Enbridge executive vice president Vern Yu in
the response letter. "In the meantime, the dual pipelines will continue to
operate safely until they are replaced on completion of the Tunnel
Project."
Enbridge claimed the state lacks the authority to terminate or
revoke the 1953 easement, and that Enbridge is in full compliance with revised
safety agreements approved in 2017 and 2018 with the state under the previous
Republican governor, Rick Snyder.
Enbridge added that the pipeline was
reviewed and approved for operation by the US Pipeline and Hazardous Materials
Safety Administration last year after the necessary repairs were made following
the anchor support accident.
Enbridge is asking a federal court to
dismiss the state's easement revocation.
"To make matters worse, the
state of Michigan has offered no short-term or long-term plans for alternative
propane or energy supply should Line 5 be shut down," Enbridge spokesman Michael
Barnes added in a statement.
In yanking the easement in November, Whitmer
cited "persistent and incurable violations of the easement's terms and
conditions," including structural issues with the dual pipelines that provide
Michigan customers with more than half of their propane
supplies.
"Enbridge has imposed on the people of Michigan an unacceptable
risk of a catastrophic oil spill in the Great Lakes that could devastate our
economy and way of life," Whitmer said in a Nov. 13 statement. "That's why we're
taking action now, and why I will continue to hold accountable anyone who
threatens our Great Lakes and fresh water."
There's been greater scrutiny
of Enbridge in Michigan since a significant 2010 oil spill from a separate
Enbridge pipeline along the Kalamazoo River.
At the time, Alberta Energy
Minister Sonya Savage called the move by Whitmer the latest in her
"long-standing efforts" against Line 5. Savage predicted a "long, protracted
process in the American court system."
Energy analysts have contented
there is a low likelihood of the pipeline actually shuttering this spring given
the protracted legal fight involved.
Enbridge reiterated that it is
offering to meet with state officials to resolve any differences.
As MRC
wrote
previously, in late December 2019, Enterprise Products Partners and Enbridge
agreed to jointly develop a deepwater crude oil export terminal offshore
Houston, the latest sign of consolidation in the crowded field of US Gulf Coast
export projects.
We also remind that Enterprise Products Partners' Mont
Belvieu propane dehydrogenation unit in Texas restarted from
planned maintenance in the first week of December, 2019. The PDH unit went
offline for maintenance on November 13. That day, the company said in a filing
with the Texas Commission on Environmental Quality that the RAC "B" turbine shut
down, which resulted in flaring. The flaring was estimated to last 72 hours. The
unit has a capacity of 750,000 mt/year of propylene.
Propylene is the
main feedstock for producing polypropylene (PP).
According to MRC''s DataScope report,
PP imports into Russia increased by 21% year on year to about 202,000 tonnes in
the first eleven months of 2020. Propylene homopolymer (homopolymer PP)
accounted for the main increase in imports. |
