A consulting report for Enbridge Inc. estimates the closure of the Line 5 pipeline would lead to an increase of one to two cents per litre in gasoline prices for Ontarians and Quebecers, a revelation that has reignited debate on the true economic impacts of shuttering an aging pipeline with very clear environmental risks.
The report became public last week, but the Calgary-based pipeliner filed it as evidence six months ago in a lawsuit seeking the removal of its oil pipeline from Bad River Band territory on the south shore of Lake Superior, Environmental Defence Canada writes in a release.
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The Bad River Band lawsuit comes atop efforts by the Michigan government to close Line 5 over concerns that an oil spill would have devastating impacts on aquatic ecosystems and the well-being of those who depend on them. The matter of just how much economic harm the closure of Line 5 might generate remains a matter of hot debate.
Confirming analysis commissioned by Environmental Defence, Enbridge’s own consultant Neal Earnest calculated in his report that shuttering the 540,000-barrel-per-day pipeline would lead to gas prices increasing just 0.5 cents per gallon in Michigan and Wisconsin, and 1.8 cents per litre in Ontario and Quebec.
“International energy markets control oil prices, not any one single pipeline. And Enbridge knows this,” said Environmental Defence Water Program Manager Michelle Woodhouse.
“Fossil fuel companies like Enbridge are raking in record profits while they exploit the current conflict in Ukraine and high gas prices as a means to protect their bottom line and keep Line 5 in operation despite the threat it poses to the Great Lakes,” she added. “But the truth is, Line 5’s operation is irrelevant to the issue of soaring gas prices.”
Enbridge spokesperson Jesse Semko accused Environmental Defence of quoting selectively from Earnest’s report, writes the Globe and Mail.
“Reports from activists have cherry-picked selective portions of Neil Earnest’s analysis to present an inaccurate view of the impacts associated with shutting down Line 5,” Semko said in a statement.
But the report [pdf] did find a negligible impact on gas prices, and it also went into detail about the impacts on NGL (natural gas liquid) fractionation facilities, as well as crude oil refineries in the region, describing them as anywhere from “significant” to “severe.” “Shutting down Line 5 will result in the closure of a major NGL fractionation facility in Ontario,” alongside two smaller ones in Michigan and Wisconsin, the report found, noting that “there is also potential for one or more refinery closures” and that “significant job losses and refined product shortages will result.”
Semko also claimed that Russia’s war in Ukraine means the timing isn’t right for pipeline closures.
“The impact of ongoing inflationary pressures and the Ukraine war’s disruption to global energy markets has made this a particularly fraught time to be considering the closure of any oil pipelines, much less one as significant to the U.S. and Canadian economies as Line 5,” he said.
Since he was engaged to consider the regional impacts on propane and crude oil markets should Line 5 cease operations, the Enbridge expert did not address the matter of potential environmental risk if the 69-year-old pipeline is not shut down. Environment Defence, and numerous other environmental and First Nations groups on both sides of the border, are clear on this issue, however.
“A spill from Line 5 would be devastating to the Great Lakes and the people who live here,” said Woodhouse. “Disastrous” environmental harms would ensue, she added, with economic damages estimated at “anywhere between US$1.8 and $6.3 billion,” excluding impacts on Canadian shorelines.
“It should be very clear now that when it comes to the operation of Line 5, the biggest economic threat we face is actually the threat that it poses to the Great Lakes ecosystem which we depend upon for all aspects of life here,” Woodhouse said.
