Enbridge warns about Line 5 dangers if axed; reports strong 1Q performance

Enbridge CEO, Al Monaco, warned about the bad consequences if the Line 5 pipeline gets axed. However, he said that the possibilities of Michigan’s governor succeeding in her quest to shut down the project are low; all of this during a conference call with investors regarding the company’s 1Q financial results.

Firstly, as we reported previously, Michigan’s governor, Gretchen Whitmer has pledged to axe the Line 5 pipeline, which delivers up to 540,000 barrels per day of light crude and propane. Michigan’s order was due to concerns about the aging pipeline leaking to the great lakes.

Secondly, the pipeline sends petroleum products from Superior, Wisconsin, to refineries in Sarnia, Ontario. Canadian officials have warned that shutting down the pipeline would end thousands of jobs; and would also cut essential supply of gasoline and jet fuel to Ontario and Quebec.

Consequently, Al Monaco said. “You just can’t take 540,000 barrels per day out of the market and not have bad things happen; ultimately, to consumers and petrochemical plants and also refineries. It’s just a very bad outcome.”

However, as said above, he said he trusts that the outcome would be positive for the Enbridge project; due to the negotiations between the state and his company; in addition to Enbridge’s court battle against the order; which has its deadline in May 12.

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Enbridge Gas

Enbridge reports strong 1Q performance

Moreover, according to JWN, the federal liberal government will push back to Michigan’s order under the 1977 Transit Pipelines Treaty with the United States that allows for the uninterrupted flow of energy between the two countries.

On the other hand, Al Monaco, Enbridge’s CEO, reported a strong performance of his company during the first quarter of 2021. He reported a 1Q profit of $1.9 billion; compared with a loss of $1.4 billion in the same quarter last year.

Furthermore, he reported an operating revenue totaled $12.2 billion, up from $12 billion in the first three months of 2020.

Finally, this 1Q results, included a gain of $300 million related to the mark-to-market value of derivatives used to manage foreign exchange risk. Enbridge said it took a $1.7-billion charge related to the value of its investment in DCP Midstream LLC; as well as a $2.0-billion charge related to derivatives.

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