Midstream

Line 5 controversy mounts; how can it affect the energy security of Canada?

Line 5 controversy

Line 5 controversy has mounted just a day before its operating company, Enbridge, makes the decision to whether shut it, or keep running it; after Michigan’s governor, Gretchen Whitmer threatened to seize the company’s profits of it, if the company denied to shit the midstream asset.

Firstly, as we reported previously, the Line 5 is not just another pipeline. It delivers to northern Alberta more than 2,8 million barrels of oil, more than half of Canada’s total production. It also carries as much as 70% of the total crude oil produced in Saskatchewan that goes into the market. In short, is part of Canada’s vital energy security assets.

Secondly, Michigan’s Governor, Whitmer, revoked a 1953 easement that allowed the pipeline to operate for more than 65 years; accusing Enbridge of violating the terms of the agreement after the company attempted to build a tunnel underneath the Great Lakes to upgrade the old pipe; while keeping the old one in operations.

The pipeline has a 1977 treaty backing it

However, in a legal filing this Tuesday, the Canadian government warned that a potential shut of the pipe could severely harm the relationship between the U.S. and Canada. It said that shutting down Line 5 would provoke price spikes. It would also violate a 1977 treaty, which prevents a state-level government from shutting down a pipeline running between the two countries.

In fact, this is the main argument from Enbridge and Canadian officials to keep the Line running; Michigan wouldn’t have the jurisdiction to make such a call and shut a cross border energy asset. The brief also highlighted: “The proposed shutdown would cause a massive and potentially permanent disruption to Canada’s economy and energy security.”

Moreover, Natural Resources Minister Seamus O’Regan, said that Ottawa was backing the governments of Alberta, Saskatchewan, Ontario and Quebec, in filing the brief. The pipeline does not just affect one province or one region; it supports our entire country,” O’Regan said.

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Enbridge Line 5

Line 5, as vital in the U.S. as it is in Canada

Furthermore, he also added. “It remains the safest, most efficient way to transport fuel to refineries and markets and is a reliable source of energy for Michigan, Ohio, Pennsylvania, Ontario and Quebec. The pipeline is as important to Canada as it is to the U.S.”

In fact, according to Sonya Savage, Alberta Energy Minister, if the Line 5 gets shut, it would create a dangerous precedent for other states to try to shut cross border projects; it would put in hazard energy infrastructure and therefore vital oil supply.

Consequently, not just the oil and gas market would be hit, but also the gasoline, and jet fuel ones; as Line 5 supplies at Toronto Pearson International Airport as well as 66 % of Quebec’s crude oil needs. “A Line 5 shutdown would severely disrupt the supply and increase the price consumers pay for fuel across Quebec and Ontario.” The brief says.

In addition, Ottawa underlined, according to the Financial Post, that closing the pipeline would “cause massive revenue losses; and also, potentially significant job losses in the Western Canadian energy sector. Therefore, he economic impacts of a shutdown would be immediate; and also severe for both the fuel users in the east and for producers in the west.”

Nevertheless, for Collin O’Mara, president and CEO of the National Wildlife Federation; Whitmer’s decision to shut the pipeline is in fact the correct one. “Is indeed the right decision to safeguard the Great Lakes; and also, protect the health and livelihoods of the millions of people and wildlife who depend upon them.”

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