LINE 5
Enbridge appeals to vacate an order that would shut down its pipeline
, The Associated Press
MADISON, Wis. — An attorney for the energy company Enbridge tried to persuade a federal appellate court Thursday to vacate an order that would shut down part of a pipeline running through a Wisconsin tribal reservation.
About 12 miles (19 km) of Enbridge's Line 5 pipeline runs across the Bad River Band of Lake Superior Chippewa's reservation. The company contends that U.S. District Judge William Conley improperly ordered Enbridge last summer to shut down a section of the pipeline on the reservation within three years. Conley also ordered the company to pay the tribe millions of dollars in trespassing fees, Enbridge attorney Alice Loughran told a three-judge panel at the 7th U.S. Circuit Court of Appeals in Chicago.
She said Conley's order violates a 1977 treaty between the United States and Canada that states no authority in either country shall impede the flow of oil and natural gas through pipelines between the two nations. Enbridge wants to reroute the pipeline around the reservation, but needs more time to secure permits from multiple government agencies, Loughran said.
“The court's shut-down order is prohibited,” she said.
The Bad River tribe's attorney, Paul Clement, implored the judges to go beyond Conley's order. He urged them to shut down the pipeline immediately to protect the environment from a potential spill and increase the financial penalties Conley imposed on Enbridge for trespassing on the reservation.
“Enbridge wants to continue business as usual,” Clement said.
Line 5 transports up to about 87 million litres of oil and liquid natural gas daily. The pipeline runs about 1,038 kilometres from the city of Superior, Wisconsin, through northern Wisconsin and Michigan to Sarnia, Ontario.
The tribe sued Enbridge in 2019 to force the company to remove the portion of Line 5 that crosses its reservation, saying the 71-year-old pipeline is dangerous and land easements allowing Enbridge to operate on the reservation expired in 2013. Enbridge has proposed removing the pipeline from the reservation and rerouting it, but the project depends largely on obtaining permits from multiple government agencies.
Bad River members told Conley in May that erosion around a 3.7 kilometres section of Line 5 has created an immediate risk of rupture and contamination and asked him to immediately shut down that section. The company says there haven't been any spills from Line 5 in Wisconsin since 2002, when a leak was contained at its Superior terminal.
Conley in June ordered Enbridge to shut down that portion of the pipeline but gave the company until June 2026 to do it, saying he wanted to give the energy industry time to prepare for the disruption to oil and natural gas supplies. He also ordered the company to pay the tribe more than US$5.2 million for trespassing and to keep paying as long as the pipeline keeps operating on tribal land.
The appellate judges questioned why government agencies haven't moved faster to grant Enbridge permits to reroute the pipeline. They also chastised the tribe for not taking preemptive steps to protect the area from a possible spill, such as placing sandbags around it.
Loughran said the tribe hasn't allowed Enbridge to take protective steps, while Clement countered that the tribe shouldn't have to do anything since Enbridge is trespassing.
The judges sounded frustrated with the two sides refusing to work together. “The parties have mutually declared war against each other,” Judge Michael Scudder said.
Judge Frank Easterbrook said the panel likely won't issue a ruling for at least several months.
Enbridge has been under scrutiny since 2010, when its Line 6B pipeline ruptured in southern Michigan, releasing 800,000 gallons of oil into the Kalamazoo River system.
Michigan’s Democratic attorney general, Dana Nessel, filed a lawsuit in 2019 seeking to shut down twin portions of Line 5 that run beneath the Straits of Mackinac, the narrow waterways that connect Lake Michigan and Lake Huron. Nessel argued that anchor strikes could rupture the line, resulting in a devastating spill. That lawsuit is still pending in a federal appellate court.
Michigan regulators in December approved the company's $500 million plan to encase the portion of the pipeline beneath the straits in a tunnel to mitigate risk. The plan is awaiting approval from the U.S. Army Corps of Engineers.
, The Associated Press
MADISON, Wis. — An attorney for the energy company Enbridge tried to persuade a federal appellate court Thursday to vacate an order that would shut down part of a pipeline running through a Wisconsin tribal reservation.
About 12 miles (19 km) of Enbridge's Line 5 pipeline runs across the Bad River Band of Lake Superior Chippewa's reservation. The company contends that U.S. District Judge William Conley improperly ordered Enbridge last summer to shut down a section of the pipeline on the reservation within three years. Conley also ordered the company to pay the tribe millions of dollars in trespassing fees, Enbridge attorney Alice Loughran told a three-judge panel at the 7th U.S. Circuit Court of Appeals in Chicago.
She said Conley's order violates a 1977 treaty between the United States and Canada that states no authority in either country shall impede the flow of oil and natural gas through pipelines between the two nations. Enbridge wants to reroute the pipeline around the reservation, but needs more time to secure permits from multiple government agencies, Loughran said.
“The court's shut-down order is prohibited,” she said.
The Bad River tribe's attorney, Paul Clement, implored the judges to go beyond Conley's order. He urged them to shut down the pipeline immediately to protect the environment from a potential spill and increase the financial penalties Conley imposed on Enbridge for trespassing on the reservation.
“Enbridge wants to continue business as usual,” Clement said.
Line 5 transports up to about 87 million litres of oil and liquid natural gas daily. The pipeline runs about 1,038 kilometres from the city of Superior, Wisconsin, through northern Wisconsin and Michigan to Sarnia, Ontario.
The tribe sued Enbridge in 2019 to force the company to remove the portion of Line 5 that crosses its reservation, saying the 71-year-old pipeline is dangerous and land easements allowing Enbridge to operate on the reservation expired in 2013. Enbridge has proposed removing the pipeline from the reservation and rerouting it, but the project depends largely on obtaining permits from multiple government agencies.
Bad River members told Conley in May that erosion around a 3.7 kilometres section of Line 5 has created an immediate risk of rupture and contamination and asked him to immediately shut down that section. The company says there haven't been any spills from Line 5 in Wisconsin since 2002, when a leak was contained at its Superior terminal.
Conley in June ordered Enbridge to shut down that portion of the pipeline but gave the company until June 2026 to do it, saying he wanted to give the energy industry time to prepare for the disruption to oil and natural gas supplies. He also ordered the company to pay the tribe more than US$5.2 million for trespassing and to keep paying as long as the pipeline keeps operating on tribal land.
The appellate judges questioned why government agencies haven't moved faster to grant Enbridge permits to reroute the pipeline. They also chastised the tribe for not taking preemptive steps to protect the area from a possible spill, such as placing sandbags around it.
Loughran said the tribe hasn't allowed Enbridge to take protective steps, while Clement countered that the tribe shouldn't have to do anything since Enbridge is trespassing.
The judges sounded frustrated with the two sides refusing to work together. “The parties have mutually declared war against each other,” Judge Michael Scudder said.
Judge Frank Easterbrook said the panel likely won't issue a ruling for at least several months.
Enbridge has been under scrutiny since 2010, when its Line 6B pipeline ruptured in southern Michigan, releasing 800,000 gallons of oil into the Kalamazoo River system.
Michigan’s Democratic attorney general, Dana Nessel, filed a lawsuit in 2019 seeking to shut down twin portions of Line 5 that run beneath the Straits of Mackinac, the narrow waterways that connect Lake Michigan and Lake Huron. Nessel argued that anchor strikes could rupture the line, resulting in a devastating spill. That lawsuit is still pending in a federal appellate court.
Michigan regulators in December approved the company's $500 million plan to encase the portion of the pipeline beneath the straits in a tunnel to mitigate risk. The plan is awaiting approval from the U.S. Army Corps of Engineers.
Enbridge sees 'tailwind' for its Mainline system as Trans Mountain faces delays
, The Canadian Press
Enbridge Inc. could benefit from increased volumes on its Mainline oil pipeline network if the startup of the Trans Mountain pipeline expansion is significantly delayed, the Calgary-based energy infrastructure firm said Friday.
Enbridge, like the rest of Canada's energy sector, has been closely watching the latest developments with the Trans Mountain project. The high-profile pipeline expansion will increase Trans Mountain's capacity from 590,000 barrels per day to a total of 890,000 barrels per day, creating new oil shipping competition for Enbridge and its Mainline system, but the project has been marred by delays and construction cost increases.
Most recently, Trans Mountain Corp. announced it has run into new construction challenges in B.C. that will delay the pipeline's expected first quarter startup until sometime in the second quarter of this year.
Colin Gruending, president of Enbridge's liquids pipelines business, said Friday the company has been assuming an April 1 in-service date for Trans Mountain. He said if that date is pushed back, Enbridge will likely see a small boost in shipping volumes.
"To the extent it (Trans Mountain) is delayed, that's a slight tailwind," Gruending told a conference call to discuss Enbridge's fourth-quarter earnings.
"We believe we're going to be substantially full anyway, so a slight delay doesn't provide a massive increase for us. But there is some upside to that."
Enbridge's Mainline network is Canada's largest oil pipeline system, providing about 70 per cent of the total oil pipeline transportation capacity out of Western Canada. Demand for shipping on the Mainline — which moves oil to markets in Eastern Canada and the U.S. Midwest — has exceeded capacity over the past few years. However, the network has long been expected to lose barrels to Trans Mountain once the expansion project comes online.
But Gruending said that picture has changed due to Trans Mountain's delays. The pipeline project was originally supposed to be finished in 2022, and the construction delays have meant more time for Canadian oil producers to ramp up production in anticipation of the additional export capacity.
"I think this notion that the Mainline is going to lose a bunch of volume when (Trans Mountain) comes on is a bit of a stale concept. It might have been valid a view years ago, but it's been delayed materially," Gruending said.
"And in that multi-year period of delay, supply has structurally and permanently grown . . . That demand is there. It's basically insatiable."
Statistics Canada data shows oil production in Alberta rose to a new record of 3.82 million barrels per day in 2023. In December alone, Alberta produced 4.19 million barrels per day, a 10 per cent year-over-year increase.
A report released in October by Deloitte Canada said Canadian oil production is expected to grow by about 375,000 barrels a day over the next two years, greater than the total amount added to Canada's production levels over the past five years combined.
Enbridge is forecasting its Mainline system will run essentially at capacity for most of 2024, averaging three million barrels per day.
In December, Enbridge filed an application with the Canada Energy Regulator for approval of its new tolling deal for the Mainline system. Tolls are the fees oil companies pay to ship their product on a pipeline, and are how pipeline operators make money.
Enbridge had been negotiating a new tolling framework with its oil industry customers for a year and a half. Once finalized and approved by the regulator, the new tolling deal will be in place through 2028.
On Friday, Enbridge reported a profit of $1.73 billion or 81 cents per share in its fourth quarter compared with loss a year earlier when it took a large non-cash goodwill impairment charge.
The result compared with a loss of $1.07 billion or 53 cents per share in the last three months of 2022 when the company took at $2.5-billion charge relate to its gas transmission business.
On an adjusted basis, Enbridge said it earned 64 cents per share in the quarter ended Dec. 31 compared with an adjusted profit of 63 cents per share a year earlier.
The company said last month it was cutting its workforce by 650 positions due to what it called "increasingly challenging business conditions" related to geopolitical instability, persistent inflation and rising interest rates.
This report by The Canadian Press was first published Feb. 9, 2024.
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