By Staff The Canadian Press
Posted May 5, 2021
Enbridge president and CEO Al Monaco prepares to address the company's annual meeting in Calgary, Wednesday, May 9, 2018. THE CANADIAN PRESS/Jeff McIntosh
The CEO of Enbridge Inc. says the company’s Line 3 and Line 5 pipelines in the United States are “absolutely critical” as each faces ongoing hurdles thrown up by environmental, political and other opponents.
During the Calgary-based energy infrastructure company’s annual general meeting on Wednesday, Al Monaco said Enbridge must continue to fight for those pipelines for its benefit as well as the benefit of the shippers who move products on them and the consumers who need those products.
Enbridge’s Line 5 is facing a looming May 12 shutdown ordered by Michigan Gov. Gretchen Whitmer last fall after accusing the company of violating terms of a 1953 deal that allowed the line to traverse the bottom of the Straits of Mackinac, which connects Lake Michigan and Lake Huron.
READ MORE: Michigan agency to include climate in Line 5 tunnel permit review
Watch below: (From January 2021) Prime Minister Justin Trudeau responded to questions Wednesday regarding the cancellation of the Keystone XL pipeline project, as well as an attempt by Michigan to shut down Enbridge’s Line 5.
The CEO of Enbridge Inc. says the company’s Line 3 and Line 5 pipelines in the United States are “absolutely critical” as each faces ongoing hurdles thrown up by environmental, political and other opponents.
During the Calgary-based energy infrastructure company’s annual general meeting on Wednesday, Al Monaco said Enbridge must continue to fight for those pipelines for its benefit as well as the benefit of the shippers who move products on them and the consumers who need those products.
Enbridge’s Line 5 is facing a looming May 12 shutdown ordered by Michigan Gov. Gretchen Whitmer last fall after accusing the company of violating terms of a 1953 deal that allowed the line to traverse the bottom of the Straits of Mackinac, which connects Lake Michigan and Lake Huron.
READ MORE: Michigan agency to include climate in Line 5 tunnel permit review
Watch below: (From January 2021) Prime Minister Justin Trudeau responded to questions Wednesday regarding the cancellation of the Keystone XL pipeline project, as well as an attempt by Michigan to shut down Enbridge’s Line 5.
VIDEO 2:27 Trudeau questioned on cancellation of Keystone XL project, impacts of calls to shut down Enbridge’s Line 5Trudeau questioned on cancellation of Keystone XL project, impacts of calls to shut down Enbridge’s Line 5 – Jan 27, 2021
The 68-year-old conduit has never leaked and Enbridge has said it will ignore the order because the state doesn’t have the authority to shut down the pipeline.
The 68-year-old conduit has never leaked and Enbridge has said it will ignore the order because the state doesn’t have the authority to shut down the pipeline.
Meanwhile, the $9.3-billion Line 3 pipeline replacement project is under construction with a completion target of late this year, despite ongoing protests and court challenges.
READ MORE: Arguments made in Minnesota appeals court over Enbridge’s Line 3 project
Watch below: Some Global News videos about the Line 3 project.
Construction begins on Line 3 pipeline project as Trans Mountain faces hurdles
In response to an investor’s question of how much Enbridge spends to defend itself from legal challenges, Monaco said “a lot,” but added that such costs are part of the business now.
“The infrastructure assets we own as a company and the ones we’re developing and replacing, like this, and modernizing, I think are absolutely critical to the energy future no matter what the degree of change in the energy landscape is,” he said.
“But I have to say, this is really part of the business today. We expect to have legal challenges and, frankly, it’s the management team’s job to manage those.”
© 2021 The Canadian Press
Varcoe: Halting Line 5 would create oil shortages, pain for consumers, says Suncor CEO
Analysts say a disruption in Line 5 would hit consumers in the region and the effect would ripple across Canada
Author of the article: Chris Varcoe • Calgary Herald
Publishing date: May 05, 2021 •
In this 2017 file photo, nuts, bolts and fittings are ready to be added to the east leg of the Line 5 pipeline near St. Ignace, Mich. PHOTO BY DALE G YOUNG/DETROIT NEWS VIA AP, FILE
The head of oilsands giant Suncor Energy isn’t pulling any punches about Line 5.
The threatened shutdown of the pipeline by the state of Michigan won’t just hurt oil refiners, but consumers in Canada, says Mark Little.
Suncor Energy’s chief executive joined a chorus of Canadian business leaders, analysts and politicians warning recently about the painful ramifications if Michigan succeeds in closing Enbridge’s existing pipeline that moves western Canadian oil to Central Canada through the state.
“This is a significant month because the governor has called for the line to be shut down. We don’t think that they have the authority to do that,” Little said Tuesday on a first-quarter earnings call.
“If this line gets shut down, it takes half of the oil that flows into Ontario refineries and stops it from flowing there. This will have a consequence on the people in Ontario and Quebec.”
Built in the early 1950s, Enbridge’s Line 5 pipeline ships 540,000 barrels of oil and natural gas liquids from Western Canada to refineries in Ontario, Quebec and the U.S.
The federal and provincial governments, along with the Canadian oil industry, oppose Michigan’s order that Line 5 stop operating by May 12 — something Enbridge has said isn’t within the state’s authority to dictate.
The pipeline, which runs under the Straits of Mackinac, transports oil through Michigan to Sarnia and is essential to Canadian petroleum producers moving their oil to market, as well as refiners and consumers in the region.
Citing safety concerns, Michigan Gov. Gretchen Whitmer’s office gave notice in November the state would revoke an easement that dates back more than six decades and allows the pipeline to cross under the straits, which connects Lake Huron to Lake Michigan.
(The company has proposed constructing a tunnel for the Line 5 portion that runs under the straits, while noting the existing line has operated safely for decades.)
MORE ON THIS TOPIC
U.S. 'highly unlikely' to order Line 5 shut down as deadline on crucial pipeline nears, chief negotiator says
Looming showdown as Michigan governor orders Line 5 pipeline to Ontario shut down
Frustrated Canada presses White House to keep Enbridge's Line 5 oil pipeline open
Varcoe: Canadian MPs rally around a pipeline — who could've imagined?
Enbridge has challenged Michigan’s order in U.S. federal court, maintaining the state lacks the authority to shut down the pipeline as oversight rests with the U.S. Pipeline and Hazardous Materials Safety Administration.
A judge ordered the two sides to work with a mediator to seek a resolution and additional meetings have been scheduled.
“We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely,” Enbridge’s Tracie Kenyon said in a statement.
The attempt to shut down the line has commanded the attention of federal and provincial politicians across the country, given the potential fallout.
If operations are halted, Enbridge notes refineries in Ontario, Quebec, Ohio, Pennsylvania and Michigan would receive about 45 per cent less oil from Enbridge than they currently demand. Line 5 supplies about half of all propane demand in Michigan.
The pipeline is clearly critical for consumers — and blocking it would cause a lot of unnecessary angst.
“All you are doing is artificially constraining the market. . . . When you do that, there is going to be a product shortage. It is going to increase prices and hit consumers,” Little said in an interview.
“This is a hit to the economies and it’s being generated by this action by the governor.”
While Suncor has contingency plans to continue supplying its refineries in Montreal and Sarnia, these measures would increase the expense of doing so.
“The tougher it is to get into the marketplace, the more constraints you throw up . . . the higher the price goes,” Little said
The head of oilsands giant Suncor Energy isn’t pulling any punches about Line 5.
The threatened shutdown of the pipeline by the state of Michigan won’t just hurt oil refiners, but consumers in Canada, says Mark Little.
Suncor Energy’s chief executive joined a chorus of Canadian business leaders, analysts and politicians warning recently about the painful ramifications if Michigan succeeds in closing Enbridge’s existing pipeline that moves western Canadian oil to Central Canada through the state.
“This is a significant month because the governor has called for the line to be shut down. We don’t think that they have the authority to do that,” Little said Tuesday on a first-quarter earnings call.
“If this line gets shut down, it takes half of the oil that flows into Ontario refineries and stops it from flowing there. This will have a consequence on the people in Ontario and Quebec.”
Built in the early 1950s, Enbridge’s Line 5 pipeline ships 540,000 barrels of oil and natural gas liquids from Western Canada to refineries in Ontario, Quebec and the U.S.
The federal and provincial governments, along with the Canadian oil industry, oppose Michigan’s order that Line 5 stop operating by May 12 — something Enbridge has said isn’t within the state’s authority to dictate.
The pipeline, which runs under the Straits of Mackinac, transports oil through Michigan to Sarnia and is essential to Canadian petroleum producers moving their oil to market, as well as refiners and consumers in the region.
Citing safety concerns, Michigan Gov. Gretchen Whitmer’s office gave notice in November the state would revoke an easement that dates back more than six decades and allows the pipeline to cross under the straits, which connects Lake Huron to Lake Michigan.
(The company has proposed constructing a tunnel for the Line 5 portion that runs under the straits, while noting the existing line has operated safely for decades.)
U.S. 'highly unlikely' to order Line 5 shut down as deadline on crucial pipeline nears, chief negotiator says
Looming showdown as Michigan governor orders Line 5 pipeline to Ontario shut down
Frustrated Canada presses White House to keep Enbridge's Line 5 oil pipeline open
Varcoe: Canadian MPs rally around a pipeline — who could've imagined?
Enbridge has challenged Michigan’s order in U.S. federal court, maintaining the state lacks the authority to shut down the pipeline as oversight rests with the U.S. Pipeline and Hazardous Materials Safety Administration.
A judge ordered the two sides to work with a mediator to seek a resolution and additional meetings have been scheduled.
“We will not stop operating the pipeline unless we are ordered by a court or our regulator, which we view as highly unlikely,” Enbridge’s Tracie Kenyon said in a statement.
The attempt to shut down the line has commanded the attention of federal and provincial politicians across the country, given the potential fallout.
If operations are halted, Enbridge notes refineries in Ontario, Quebec, Ohio, Pennsylvania and Michigan would receive about 45 per cent less oil from Enbridge than they currently demand. Line 5 supplies about half of all propane demand in Michigan.
The pipeline is clearly critical for consumers — and blocking it would cause a lot of unnecessary angst.
“All you are doing is artificially constraining the market. . . . When you do that, there is going to be a product shortage. It is going to increase prices and hit consumers,” Little said in an interview.
“This is a hit to the economies and it’s being generated by this action by the governor.”
While Suncor has contingency plans to continue supplying its refineries in Montreal and Sarnia, these measures would increase the expense of doing so.
“The tougher it is to get into the marketplace, the more constraints you throw up . . . the higher the price goes,” Little said
.
Suncor Energy CEO Mark Little at the Fort Hills oilsands project on Sept. 10, 2018. PHOTO BY VINCENT MCDERMOTT/FORT MCMURRAY TODAY/POSTMEDIA NETWORK
Last week, Imperial Oil CEO Brad Corson said the integrated producer is closely watching the Line 5 situation as the company uses the infrastructure to move oil to its refineries in Sarnia and Nanticoke, Ont.
Last week, Imperial Oil CEO Brad Corson said the integrated producer is closely watching the Line 5 situation as the company uses the infrastructure to move oil to its refineries in Sarnia and Nanticoke, Ont.
Imperial also has plans ready in case the pipeline is shut down, although Corson views that as a “low probability” event.
Analysts say a disruption in Line 5 would hit consumers in the region and the effect would ripple across Canada.
A recent report by the industry consultancy Kent Group said refineries would need to find other, more expensive sources of oil if Line 5 is blocked, which would translate into higher diesel and gasoline prices in Ontario and Quebec.
“There will be a short-term spike in pricing and we think that will be six to eight cents a litre,” Vijay Muralidharan, a senior consultant with the Kent Group, a Kalibrate company, said in an interview Tuesday.
“It will be first felt in Ontario, but . . . the price increase will flow through across Canada.”
After a sharp rise in gasoline and diesel prices, other fuel supplies would likely flow into the region and ease some of the pressure, he added.
If a disruption lasted long enough, it could also affect petroleum producers by widening the price discount for western Canadian crude as oil becomes stranded in the region due to a transportation bottleneck.
Jackie Forrest, executive director of the ARC Energy Research Institute, noted there is excess crude-by-rail capacity available to move barrels to market today, but it’s likely not enough to cover all of the shipments moving on Line 5 for a protracted period of time.
“It would have knock-on effects on Canadian heavy oil prices,” said Forrest.
“It would reduce the amount of crude oil that we can put into our export pipelines and we already have quite a tight situation here.”
None of these outcomes is tenable. The pain would be felt in many parts of the country if the pipeline is suddenly stopped.
For Canada, the struggle over Line 5 continues as more voices speak out.
Chris Varcoe is a Calgary Herald columnist.
Analysts say a disruption in Line 5 would hit consumers in the region and the effect would ripple across Canada.
A recent report by the industry consultancy Kent Group said refineries would need to find other, more expensive sources of oil if Line 5 is blocked, which would translate into higher diesel and gasoline prices in Ontario and Quebec.
“There will be a short-term spike in pricing and we think that will be six to eight cents a litre,” Vijay Muralidharan, a senior consultant with the Kent Group, a Kalibrate company, said in an interview Tuesday.
“It will be first felt in Ontario, but . . . the price increase will flow through across Canada.”
After a sharp rise in gasoline and diesel prices, other fuel supplies would likely flow into the region and ease some of the pressure, he added.
If a disruption lasted long enough, it could also affect petroleum producers by widening the price discount for western Canadian crude as oil becomes stranded in the region due to a transportation bottleneck.
Jackie Forrest, executive director of the ARC Energy Research Institute, noted there is excess crude-by-rail capacity available to move barrels to market today, but it’s likely not enough to cover all of the shipments moving on Line 5 for a protracted period of time.
“It would have knock-on effects on Canadian heavy oil prices,” said Forrest.
“It would reduce the amount of crude oil that we can put into our export pipelines and we already have quite a tight situation here.”
None of these outcomes is tenable. The pain would be felt in many parts of the country if the pipeline is suddenly stopped.
For Canada, the struggle over Line 5 continues as more voices speak out.
Chris Varcoe is a Calgary Herald columnist.
No comments:
Post a Comment