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Canadian Company Defies Michigan Order to Shut Down Oil Pipeline

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OTTAWA — A Canadian company on Wednesday defied an order to shut down an oil and gas pipeline that passes through Michigan, flouting a directive from Gov. Gretchen Whitmer in a contest of wills that threatens to aggravate U.S.-Canada relations.

Ms. Whitmer in November canceled the pipeline’s legal permission to cross the Straits of Mackinac, the narrow, heavily trafficked waterway that separates Michigan’s upper and lower peninsulas, and links Lake Michigan to Lake Huron.

She cited “persistent and incurable violations” of the permission, known as an easement, and concerns that potential leaks could pollute a vast area of the Great Lakes and endanger drinking water for millions of people in both countries.

The state had given Enbridge, the company that owns the pipeline, until Wednesday to shut it down. But the pipeline’s future is currently in mediation ordered by a U.S. district court in Michigan, and Mike Fernandez, senior vice president of Enbridge, said that the company, based in Calgary, Alberta, will only stop the flow of oil if ordered by a court.

He disputed the governor’s allegations that the company had violated the easements’ terms and noted that federal inspections had declared the pipeline, which has a relatively small capacity of 540,000 barrels a day, to be sound.

Most of the oil carried by Enbridge Line 5 is extracted from Alberta’s oil sands, a process that releases more greenhouse gases and other pollutants than most oil production. Michigan’s action and the company’s defiance place Prime Minister Justin Trudeau’s government in the uncomfortable position of defending an oil sands pipeline while making the fight against climate change one of its top priorities.

On Tuesday, Canada joined the legal fray, filing a brief in support of Enbridge, arguing that the state had overstepped its authority. Ottawa backed Enbridge’s claim that only the U.S. federal government can order a shutdown, and that the matter must be negotiated between the two nations.

But involving the Biden administration could complicate relations between the two countries. Ms. Whitmer is a close political ally of President Biden, appearing on his shortlist of potential running mates during the 2020 presidential election.

Kirsten Hillman, Canada’s ambassador in Washington, said that Mr. Trudeau had raised the issue with the president and members of the Canadian cabinet had brought it up with their American counterparts. Along with other officials, Ms. Hillman said that she had laid out Canada’s case with Ms. Whitmer as recently as last week and with officials throughout Washington.

Exactly what Canada has to show for that, however, is unclear.

“I don’t really think that’s for me,” Ms. Hillman said. “Their discussions, within their system, are really something you’d have to ask them about.”

The Canadian government’s involvement adds another factor to the mix: a 1977 treaty in which Canada and the United States agreed not to block oil and gas while it is in transit through either country.

“The treaty is a very clear demonstration of the fact that this is an international matter,” Ms. Hillman said.

A spokesman for the White House declined to comment about Line 5 or Michigan’s authority over it.

Environmentalists in the state have long argued the line’s two aging pipes, which sit on the lake bed, could be broken open by a ship’s anchor or a structural failure. Any resulting spill would despoil cherished, economically vital waters.

“We spend time growing up going to the lakes, going to the beach,” said David Holtz, a spokesman for Oil & Water Don’t Mix, a group that wants Line 5 closed. “The governor has really decided that the right decision is to not put the Great Lakes, and our northern Michigan economy and shipping at risk for an oil pipeline that primarily services the Canadian market.”

Several Indigenous groups on both sides of the border and several states have also backed the governor’s move. Her opponents include business groups and some labor unions.

On Wednesday, Bobby Leddy, Ms. Whitmer’s press secretary, called Enbridge’s decision to keep oil flowing “unlawful.”

“These oil pipelines in the Straits of Mackinac are a ticking time bomb, and their continued presence violates the public trust and poses a grave threat to Michigan’s environment and economy,” he told the Detroit Free Press.

Ms. Whitmer said in a letter to Enbridge on Tuesday said that the state will attempt to recover all of the company’s future earnings from the continued operation of the pipeline.

Mr. Fernandez said pipeline opponents ignore its economic importance. In addition to delivering crude oil to Michigan and surrounding states, Line 5 provides refineries in Ontario and Quebec, home to about two-thirds of Canadians, with about 45 percent of their crude oil.

“There are protesters that think we can push a button or turn a dial and automatically what’s going to happen is that oil is going to be filled by other sources of energy,” Mr. Fernandez said. “That’s not readily apparent and the infrastructure currently is not in place.”

He added that the 4.5-mile-long underwater section of Line 5 has never leaked in the 68 years since it was built.

But Enbridge has a sullied reputation in Michigan. Eleven years ago, another Enbridge pipeline in the state burst and poured 843,000 gallons of heavy oil from the oil sands into the Kalamazoo River. The spill soiled 35 miles of wetlands and waterways and sickened 320 people and about 4,000 animals. An inquiry blamed avoidable blunders by Enbridge for the spill.

The Conservative opposition in Canada’s Parliament and the conservative government of Alberta have been pressing Mr. Trudeau to get Mr. Biden behind the pipeline. However, Annamie Paul, the leader of Canada’s Green Party, and several environmentalists say that Canada is backing the wrong side in the battle.

“We see no reason to doubt the data she is relying on,” Ms. Paul said of the governor. “It is ill-advised for our prime minister to be spending additional political capital down in the States on stopping the shutdown of a pipeline.”

Exactly how economically disruptive for Canada shutting the pipeline down would be is unclear.

Bob Larocque, the president and chief executive officer of the Canadian Fuels Association, a trade group for oil refiners, said that his members’ contingency planning has found other pipelines can handle about 60 percent of the oil that now arrives at Ontario and Quebec refineries through Line 5. The rest, he said, would have to be moved by truck, trains and ships, all more expensive transport modes. Mr. Larcoque said that he had no way to estimate the resulting increase in the price of gasoline and other fuels.

Under Michigan’s previous governor, Rick Snyder, a Republican, Enbridge received state permission to build a tunnel well under the lake bed. It would, according to the company, eliminate any danger to the pipeline from ships and also contain any oil in the case of any leaks.

Canada, Ms. Hillman the ambassador said, hopes that Enbridge can end the dispute by selling its tunnel plan to Ms. Whitmer.

“We’re really supportive of that tunnel project,” she said. “The pipeline’s already operated safely for over 65 years and that the tunnel project will make the pipeline safer, eliminating any risk of spills.”

Mary M. Chapman contributed reporting from Detroit.


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