A recent economic analysis predicts that shutting down the Enbridge Line 5 pipeline would have an insignificant impact on Michigan’s energy markets and gas prices.
MICHIGAN—A new report shows that Michigan’s economy will likely “adapt” just fine, should Enbridge ever be forced to shut down its Line 5 oil pipeline beneath the Straits of Mackinac.
The new expert analysis refutes corporate messaging that points to “immediate and severe” consequences—and higher gas prices—should the pipeline (even temporarily) be shut down, and Michigan Attorney General Dana Nessel said the latest findings are a “game-changer.”
“It confirms what I and others have said for years,” Nessel said in a statement last week. “Enbridge has tried to justify its operation of a dangerous pipeline in the Great Lakes by arguing that Line 5 is too important to the economy to shut down. Those claims have never been true.”
Nessel said the new, 111-page report from PLG Consulting, a Chicago-based firm that specializes in economic and industrial logistics, marks the “most detailed” in a series of expert analyses of what would happen to oil and gas prices if Line 5 shuts down.
Among its findings:
Michigan’s “energy markets will adapt—as they have always done and continue to do—in the event that Line 5 is shut down.” And with advance notice, the market can accommodate its closure “without supply shortages or price spikes,” according to the recent report.
“Companies participating in Line 5 products and markets are sophisticated and large energy firms that regularly evaluate and anticipate risks and market changes,” the report states. “It’s not surprising that for at least the past six years, contingency plans have been developed.”
Each day, nearly 23 million gallons of oil rushes through the 70-year-old Line 5 pipeline beneath the Straits of Mackinac that stretches about 645 miles across Michigan. It’s part of Enbridge’s 8,600-mile Lakehead System which transports light crude oil and natural gas liquids across the midwest and Canada—but not all of that oil always makes its way to its intended destination.
Despite insistence from Enbridge executives that Line 5 has “operated without incident” since 1953, reports show the pipeline has spilled at least 1.1 million gallons of oil in the past 50 years.
As the state’s top law enforcement official, Nessel has consistently argued that Line 5 needs to be shut down as soon as possible because it poses “an unacceptable risk” to the Great Lakes.
But litigation that would actually accomplish that goal, so far, has been held up by appeals.
In court, Enbridge has claimed that closing Line 5 would create a shortfall of 14.7 million gallons of transportation fuel a day, as well as a daily propane shortage of about 756,000 gallons. Company officials have also said that Michigan, as a whole, would need to find up to 7.7 million gallons of gas, diesel, jet fuel, and propane every day to make up for the resulting shortfall.
The new report from PLG Consulting, however, is more optimistic—finding that Michiganders would still have access to a steady supply of reliable and affordable fuel in Line 5’s absence, and that existing infrastructure can offset all but 13% of the oil now supplied by the pipeline.
It also found that with some notice, shortages and price spikes can be avoided altogether.
“Enbridge has known of the possibility of a Line 5 shutdown for years, and yet they have consistently claimed that a shutdown would cause an economic catastrophe.” Nessel said. “The truth is that Enbridge and the companies that receive oil and gas from Line 5 have had ample time to prepare contingency plans. The failure to do so would be professional malpractice.”
And as a long-running legal battle over risks posed by the 70-year-old steel pipeline continues this month, Nessel said the report also has a clear takeaway: “Michigan does not need Line 5.”
Another lawsuit that aims to shut down the pipeline is also ongoing in Wisconsin—and last month, Nessel filed a brief arguing that Enbridge’s claims of the “dire economic consequences” should Line 5 be shut down had been “exaggerated.” Nessel has also contended that any impact tied to the shutdown is “far outweighed” by clear environmental risks to the Great Lakes.
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