Biden Administration Wants Enbridge Pipeline Ruling Revisited
Robert Tuttle
Wed, April 10, 2024
(Bloomberg) -- The Biden administration has stepped into Enbridge Inc.’s fight over an oil pipeline in Wisconsin, arguing an earlier ruling did not consider the impact on US policy and did not adequately compensate indigenous landowners.
In June, a US District Court in Wisconsin ordered the Canadian pipeline company to relocate the Line 5 oil pipeline away from the Bad River Reservation within three years or halt its operation and pay the band $5.15 million for trespassing.
While the US argued the court was correct that Line 5 was trespassing, it did not consider “trade and diplomatic relationship with and treaty obligations to Canada,” the Department of Justice said in a brief filed with the US Court of Appeals for the Seventh Circuit.
The brief also suggested restitution be reconsidered, given Enbridge “earned well over $1 billion in net profit from Line 5” during the 10 years it used tribal land.
Enbridge has been enmeshed in multiple court battles over Line 5, a crucial conduit for delivering millions of gallons of oil from Western Canada to refineries in the US Midwest as well as in Ontario and Quebec.
A Line 5 shutdown is “not in the public interest as it would negatively impact businesses, communities and millions of individuals who depend on Line 5 for energy in both the US and Canada,” Enbridge said in a statement.
The battle has soured relations between the US and Canada. In addition to the Wisconsin case, Enbridge is fighting Michigan Governor Gretchen Whitmer’s order that Line 5 be shut down because of the threat of a spill where the line crosses the Great Lakes at the Straits of Mackinac. The company has proposed to build a tunnel under the waterway to make the line safer.
Bloomberg Businessweek
Don't shut Line 5: Biden administration issues long-awaited position on Canada-U.S. pipeline
CBC
Wed, April 10, 2024
Pipes at Enbridge's terminal in Superior, Wis. The Calgary company's Line 5 carries crude across Wisconsin and Michigan to refineries in Sarnia, Ont. The pipeline is the subject of a lawsuit between the company and the Bad River Band of Lake Superior Chippewa, through whose territory the pipeline runs. (Jim Mone/The Canadian Press - image credit)
The Biden administration has weighed in for the first time on a major cross-border legal dispute that could shut down portions of Enbridge's Line 5 Canada-U.S. oil pipeline.
The opinion came in an amicus brief that, although nuanced, argued against shutting down the pipeline, partly in order to preserve diplomatic relations with Canada.
The more than 1,000-kilometre long Line 5 carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont.
The legal dispute in question is one to which the U.S. government is not actually a party. It involves Calgary-based Enbridge Inc. and the Wisconsin-based Bad River Band of Lake Superior Chippewa, through whose territory the pipeline runs.
In 2023, the U.S. District Court for the Western District of Wisconsin ruled in favour of the Bad River Band and ordered Enbridge to shut down parts of the pipeline within three years and pay the band $5.2 million for trespassing on its land after easement rights expired.
Both Enbridge and the band, which had wanted an immediate shutdown, appealed the ruling.
The Canadian government, in its own brief last fall, argued that a shutdown of the line would violate a 1977 Canada-U.S. pipeline agreement in which the countries agreed not to block the flow of each other's hydrocarbons.
Wednesday's submission from the U.S. Department of Justice cited Ottawa's argument and urged the U.S. Court of Appeals for the 7th Circuit to send the ruling back to the lower court.
A signpost marks the presence of high pressure petroleum pipelines including Enbridge's Line 5 pipeline, which Michigan Governor Gretchen Whitmer ordered shut down in May 2021, in Sarnia, Ontario, Canada March 20, 2021. Picture taken March 20, 2021.
A signpost marks the presence of high pressure petroleum pipelines including Enbridge's Line 5 pipeline, in Sarnia. Canada warned of serious economic damage if Line 5 gets closed. (Carlos Osorio/Reuters)
Government brief urges more compensation for band
On the one hand, Wednesday's brief supported the financial penalty the lower court issued against Enbridge; in fact, it said the payment to the community should be increased.
On the other hand, it urged the appeals court to reverse the part of the ruling that would require a shutdown of several kilometres of the pipeline.
The reason? According to the U.S. Department of Justice, the lower court failed to take into account significant consequences, including the possibility of a costly dispute with Canada.
"The United States has a manifest interest in complying with its treaty obligations with all sovereigns," said the 70-page amicus brief, publicly released Wednesday.
"The district court … did not consider what it had described as the 'significant public policy implications' that a shutdown order would have on the United States's trade and diplomatic relationship with and treaty obligations to Canada."
General view of the Imperial Oil refinery, located near Enbridge's Line 5 pipeline, which Michigan Governor Gretchen Whitmer ordered shut down in May 2021, in Sarnia, Ontario, Canada March 20, 2021. Picture taken March 20, 2021. Picture taken through a fence. REUTERS/Carlos Osorio
A view of the Imperial Oil refinery near Enbridge's Line 5 pipeline in Sarnia. Supporters of the pipeline say it's a vital supply line for refineries in Ontario and Quebec and essential to the production of jet fuel for major airports on both sides of the Canada-U.S. border. (Carlos Osorio/Reuters)
Another dispute ongoing in Michigan
Canada has for years pressed the Biden administration to weigh in on the pipeline dispute especially in light of the fact that it was that same administration that has already cancelled one Canada-U.S. pipeline project, Keystone XL, on its first day in office in 2021.
In its filing, the U.S. federal government cited Canada's claim that a shutdown of the pipeline would have devastating economic consequences, particularly on parts of Central Canada. Supporters of Line 5 say it's a vital supply line for refineries in Ontario and Quebec and essential to the production of jet fuel for major airports on both sides of the Canada-U.S. border.
It said that Canada has already invoked the 1977 Canada-U.S. treaty and said a shutdown could lead to a dispute process, arbitration and significant penalties if the U.S. were found to be violating its treaty obligations.
This photo taken in October 2016 shows an aboveground section of Enbridge's Line 5 at the Mackinaw City, Mich., pump station.
An aboveground section of Enbridge's Line 5 at the Mackinaw City, Mich., pump station. Another court case against Line 5 is ongoing in the state that neighbours Wisconsin. (The Associated Press)
The appeal currently being considered is separate from another ongoing legal dispute between the state of Michigan and Enbridge over the same pipeline's path through the Great Lakes.
The state points to a past spill as evidence of the environmental threat from Line 5 and has fought to block the aging pipeline from crossing the vital waterways.
The company, meanwhile, wants to build a new tunnel through the Straits of Mackinac, which link lakes Michigan and Huron.
Band River chairman 'disappointed'
Reactions to the U.S. government filing in Wisconsin were, unsurprisingly, mixed.
A Canadian official briefed on the submission said the main assessment from government lawyers was that the submission is neutral to Canadian interests.
Bad River Chairman Robert Blanchard said in a statement that the tribe was grateful the U.S. agrees Enbridge is operating on tribal land unlawfully but was "disappointed that the U.S. has not unequivocally called for an immediate end to Enbridge's ongoing trespass."
This June 29, 2018 photo shows tanks at the Enbridge Energy terminal in Superior, Wis. For the second time in a year, the federal government is invoking a little-known 1977 energy treaty between Canada and the United States to defend the Line 5 pipeline. This time, it’s in Wisconsin, where Line 5 skirts the southwestern shores of Lake Superior before crossing into Michigan. THE CANADIAN PRESS/AP-Jim Mone
An Enbridge terminal in Superior, Wis. The company appealed a lower court ruling that ordered it to shut parts of Line 5 in three years and pay compensation to the Bad River Band of Lake Superior Chippewa for trespassing on its land. (Jim Mone/The Associated Press)
Whitney Gravelle, president of the Bay Mills Indian Community, another Chippewa Great Lakes community along the pipeline route, said in a statement that the filing left the community with "more questions than answers."
"It also leaves Bad River, other Tribal Nations throughout the region, and the 40 million people that rely on the Great Lakes at risk of a catastrophic spill," Gravelle said. "We fear it will take Line 5 failing again and the disaster of an oil spill for our position to be taken seriously."
CBC
Wed, April 10, 2024
Pipes at Enbridge's terminal in Superior, Wis. The Calgary company's Line 5 carries crude across Wisconsin and Michigan to refineries in Sarnia, Ont. The pipeline is the subject of a lawsuit between the company and the Bad River Band of Lake Superior Chippewa, through whose territory the pipeline runs. (Jim Mone/The Canadian Press - image credit)
The Biden administration has weighed in for the first time on a major cross-border legal dispute that could shut down portions of Enbridge's Line 5 Canada-U.S. oil pipeline.
The opinion came in an amicus brief that, although nuanced, argued against shutting down the pipeline, partly in order to preserve diplomatic relations with Canada.
The more than 1,000-kilometre long Line 5 carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont.
The legal dispute in question is one to which the U.S. government is not actually a party. It involves Calgary-based Enbridge Inc. and the Wisconsin-based Bad River Band of Lake Superior Chippewa, through whose territory the pipeline runs.
In 2023, the U.S. District Court for the Western District of Wisconsin ruled in favour of the Bad River Band and ordered Enbridge to shut down parts of the pipeline within three years and pay the band $5.2 million for trespassing on its land after easement rights expired.
Both Enbridge and the band, which had wanted an immediate shutdown, appealed the ruling.
The Canadian government, in its own brief last fall, argued that a shutdown of the line would violate a 1977 Canada-U.S. pipeline agreement in which the countries agreed not to block the flow of each other's hydrocarbons.
Wednesday's submission from the U.S. Department of Justice cited Ottawa's argument and urged the U.S. Court of Appeals for the 7th Circuit to send the ruling back to the lower court.
A signpost marks the presence of high pressure petroleum pipelines including Enbridge's Line 5 pipeline, which Michigan Governor Gretchen Whitmer ordered shut down in May 2021, in Sarnia, Ontario, Canada March 20, 2021. Picture taken March 20, 2021.
A signpost marks the presence of high pressure petroleum pipelines including Enbridge's Line 5 pipeline, in Sarnia. Canada warned of serious economic damage if Line 5 gets closed. (Carlos Osorio/Reuters)
Government brief urges more compensation for band
On the one hand, Wednesday's brief supported the financial penalty the lower court issued against Enbridge; in fact, it said the payment to the community should be increased.
On the other hand, it urged the appeals court to reverse the part of the ruling that would require a shutdown of several kilometres of the pipeline.
The reason? According to the U.S. Department of Justice, the lower court failed to take into account significant consequences, including the possibility of a costly dispute with Canada.
"The United States has a manifest interest in complying with its treaty obligations with all sovereigns," said the 70-page amicus brief, publicly released Wednesday.
"The district court … did not consider what it had described as the 'significant public policy implications' that a shutdown order would have on the United States's trade and diplomatic relationship with and treaty obligations to Canada."
General view of the Imperial Oil refinery, located near Enbridge's Line 5 pipeline, which Michigan Governor Gretchen Whitmer ordered shut down in May 2021, in Sarnia, Ontario, Canada March 20, 2021. Picture taken March 20, 2021. Picture taken through a fence. REUTERS/Carlos Osorio
A view of the Imperial Oil refinery near Enbridge's Line 5 pipeline in Sarnia. Supporters of the pipeline say it's a vital supply line for refineries in Ontario and Quebec and essential to the production of jet fuel for major airports on both sides of the Canada-U.S. border. (Carlos Osorio/Reuters)
Another dispute ongoing in Michigan
Canada has for years pressed the Biden administration to weigh in on the pipeline dispute especially in light of the fact that it was that same administration that has already cancelled one Canada-U.S. pipeline project, Keystone XL, on its first day in office in 2021.
In its filing, the U.S. federal government cited Canada's claim that a shutdown of the pipeline would have devastating economic consequences, particularly on parts of Central Canada. Supporters of Line 5 say it's a vital supply line for refineries in Ontario and Quebec and essential to the production of jet fuel for major airports on both sides of the Canada-U.S. border.
It said that Canada has already invoked the 1977 Canada-U.S. treaty and said a shutdown could lead to a dispute process, arbitration and significant penalties if the U.S. were found to be violating its treaty obligations.
This photo taken in October 2016 shows an aboveground section of Enbridge's Line 5 at the Mackinaw City, Mich., pump station.
An aboveground section of Enbridge's Line 5 at the Mackinaw City, Mich., pump station. Another court case against Line 5 is ongoing in the state that neighbours Wisconsin. (The Associated Press)
The appeal currently being considered is separate from another ongoing legal dispute between the state of Michigan and Enbridge over the same pipeline's path through the Great Lakes.
The state points to a past spill as evidence of the environmental threat from Line 5 and has fought to block the aging pipeline from crossing the vital waterways.
The company, meanwhile, wants to build a new tunnel through the Straits of Mackinac, which link lakes Michigan and Huron.
Band River chairman 'disappointed'
Reactions to the U.S. government filing in Wisconsin were, unsurprisingly, mixed.
A Canadian official briefed on the submission said the main assessment from government lawyers was that the submission is neutral to Canadian interests.
Bad River Chairman Robert Blanchard said in a statement that the tribe was grateful the U.S. agrees Enbridge is operating on tribal land unlawfully but was "disappointed that the U.S. has not unequivocally called for an immediate end to Enbridge's ongoing trespass."
This June 29, 2018 photo shows tanks at the Enbridge Energy terminal in Superior, Wis. For the second time in a year, the federal government is invoking a little-known 1977 energy treaty between Canada and the United States to defend the Line 5 pipeline. This time, it’s in Wisconsin, where Line 5 skirts the southwestern shores of Lake Superior before crossing into Michigan. THE CANADIAN PRESS/AP-Jim Mone
An Enbridge terminal in Superior, Wis. The company appealed a lower court ruling that ordered it to shut parts of Line 5 in three years and pay compensation to the Bad River Band of Lake Superior Chippewa for trespassing on its land. (Jim Mone/The Associated Press)
Whitney Gravelle, president of the Bay Mills Indian Community, another Chippewa Great Lakes community along the pipeline route, said in a statement that the filing left the community with "more questions than answers."
"It also leaves Bad River, other Tribal Nations throughout the region, and the 40 million people that rely on the Great Lakes at risk of a catastrophic spill," Gravelle said. "We fear it will take Line 5 failing again and the disaster of an oil spill for our position to be taken seriously."
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