Analysis of Straits pipeline will cost Enbridge $3.6 million

NORTHERN MICHIGAN — The State of Michigan has selected two contracting firms to conduct an analysis on a Northern Michigan oil and petroleum gas liquid pipeline known as Line 5.

The Michigan Attorney General, Department of Natural Resources, Department of Environmental Quality and the Michigan Agency for Energy representatives made the decision July 12.

The state chose the Canadian Dynamic Risk Assessment Systems contractor to evaluate current status of the line and also look at alternatives to the pipeline. Det Norske Veritas was selected for the risk assessment and cost of a worst case spill aspect of the study.

Line 5, owned and operated by Enbridge Inc., is a 63-year-old twin pipeline that separately carries both light crude oil and natural gas liquids.

The pipeline crosses Michigan-Canadian borders with the Michigan portion of Line 5 stretching from the Upper Peninsula through the Straits of Mackinac and south to the central and southeast part of Michigan.

Both studies making up a final report would focus on the Straits part of Line 5.

In a news release this week from Attorney General Bill Schuette’s office, Enbridge will pay around $3.6 million toward the analysis.

According to the Enbridge Line 5 Payment Agreement document, Enbridge has contracted for a preview of the final report five days prior to a public release.

Otsego County is one county on a list of Northern Michigan areas and municipalities that unanimously passed recent resolutions asking Enbridge to restrict the line to its original design capacity and called for an independent study of the pipeline.

In an email, John Burt, Otsego County administrator, said he applauds the agreement.

“This is an important step in ensuring that the Great Lakes are protected,” Burt said. “Whatever the outcome, at least we’ll all have the facts.”

Ryan Duffy, Enbridge spokesperson, said the contractors will provide an independent analysis of Line 5 in the Straits.

“We expect this analysis will help build trust and confidence among Michigan residents in our continued safe and reliable operations of Line 5 in the Straits,” Duffy said in an email.

He said Enbridge is pleased the board selected independent companies that understand energy infrastructure, pipelines and the environment.

“We continuously monitor and inspect Line 5 and, while it’s not perfect, we know through our very rigorous inspection process that the line is in very good condition,” Duffy said. “We believe this additional analysis will reach the same conclusion.”

Jennifer McKay, Tip of the Mitt Watershed Council policy specialist, said the study is one of four recommendations made by the state in September.

“Enbridge has to hold a certain amount of liability and financial insurance in the event of a pipeline spill,” McKay said. “This would determine what is an appropriate level of financial assurance.”

She said this analysis will help with future decisions and potential alternatives to the pipeline.

“Ultimately, the decision and oversight of the studies and paying the contractors — while the funds are coming from Enbridge — all of that is the (responsibility of) the State of Michigan,” McKay said.

David Holtz with the Michigan Chapter of the Sierra Club — a national grassroots environmental organization, said the agreement between Enbridge and Michigan gives special treatment to Enbridge.

“Instead of the state spending the amount of money that it needs to spend to get the research and the studies and the recommendations independently — it’s going to Enbridge and telling Enbridge ‘You have to pay for it,’” Holtz said. “And then Enbridge of course wants a consideration for that.”

He said the state is cutting corners on the research and a potential oil spill in the Straits would be too catastrophic to “do on the cheap.”

Holtz said the five-day advanced preview of the study findings is unfair, especially for Straits area towns that rely on tourism.

“Shouldn’t the communities that are dependent on tourism whose economies are so tied to the Great Lakes up in Northern Michigan — shouldn’t they be getting the recommendations about Line 5 at the same time as Enbridge?” Holtz said. “Why should Enbridge have priority over them?”

Moving forward, McKay said the process needs more public comment, consideration and input.

She said the next step toward the analysis of Line 5 in the Straits would be finalizing the contracts.

“Now, the state of Michigan will go back to the companies that they selected and put forth an agreement — a contract — that will outline the scope of the work,” McKay said. “The state has indicated that they will improve public outreach opportunity and make sure that the calendars for both of these studies were to coincide.”

McKay said the state has plans to have both reports completed by next summer.