Photo credit: Kathryn DePauw
By FLOW Staff
Gov. Gretchen Whitmer and the State of Michigan have taken legal action to shut down Line 5 in the Straits of Mackinac by next May to prevent a catastrophic oil spill in the Great Lakes from the 67-year-old pipeline. Meanwhile, Line 5-owner Enbridge and its allies continue to engage in a Chicken Little “sky is falling” campaign, with the Canadian company claiming in recent days that, “shutting down Line 5 would cause shortages of crude oil for refineries in Michigan, Ohio, Pennsylvania and eastern Canada, as well as propane shortages in northern Michigan. It also would boost shipments of oil by rail or trucks, Enbridge said, without providing any evidence.
Enbridge’s drumbeat of fear has been building for a few years, for example, with a full-page advertisement in 2019 in the Traverse City Record-Eagle, alleging that “Shutting down Line 5, even temporarily, would mean lost union jobs, refinery closures, gas price spikes and greater harm to the regional economy every year.”
In fact, none of those predictions materialized when both legs of the dual Line 5 pipelines in the Straits were shut down for more than a week last June and one leg remained closed until about mid-September following damage that the U.S. Coast Guard said likely was caused by an Enbridge-contracted vessel. Research conducted during the partial shutdown by former Dow Chemical engineer Gary Street found that in August after more than 50 days with at least one leg of Line 5 closed, gasoline prices and supply were unaffected in Michigan and Canada.
The research results are consistent with these studies forecasting little if any change in energy costs after Line 5 shuts down for good:
- Available capacity and flexibility to meet energy demand in the Great Lakes region already exists in the North American energy pipeline system operated by Enbridge and its competitors without threatening our public waters and Pure Michigan economy, according to FLOW’s experts.
- A Line 5 shutdown could increase the cost of gasoline in metro Detroit by only about 2 cents a gallon, according to a 2017 study commissioned by the former Snyder administration.
- Shutting down Line 5 would add just five cents to the cost of a gallon of propane, which has hovered around $2 for the past year, according to a 2018 study by London Economics International LLC, a Boston-based consultancy, and commissioned by the National Wildlife Federation.
- The Upper Peninsula has viable options to Line 5 for its propane supply and economy, according to FLOW’s research.
- Oil & Water Don’t Mix has a great animated video showing how the Upper Peninsula does not need Line 5’s propane.
Another claim regarding the impact of a Line 5 shutdown emerged last year from management of the PBF refinery in Toledo, Ohio. Likely at Enbridge’s behest, PBF warned of a refinery shutdown and loss of a thousand jobs if the supply provided by Line 5 is no longer available. The Toledo refinery, PBF suggested, has no other source of petroleum.
This assertion immediately raised the question: What kind of refinery management would leave itself vulnerable by receiving crude from only one source? It also directly contradicts statements PBF says in its own investor filings, as well as reports from market analysts. They emphasize the PBF refinery has several sources of supply and can adjust them depending on market conditions.
“The [PBF] refinery only processes light/medium and sweet crude and gets most of its WTI crude through pipeline from Canada, the mid-Continent, the Bakken region and the U.S. Gulf Coast,” an analyst says. Another credits PBF with using “its complex crude processing capacity to source the lowest cost input.” PBF says in its 2016 filing with the Securities and Exchange Commission that crude is delivered to its facility through three primary pipelines, Line 5 from the north, Capline from the south, and Mid-Valley from the south. Crude is also delivered to a nearby terminal by rail and from local sources by a truck to truck unloading facility in the refinery property.
The fact is that multiple alternative pipelines, rail, and truck sources are and will be available to enable PBF to continue refining petroleum as it is today. No evidence points to job loss in Toledo from a Line 5 shutdown. And PBF itself said in a September 2017 news story challenging EPA regulations because of alleged job losses that the Toledo refinery employed 550, not 1,000 workers.
Fanning employee and community fears with inflated claims is the latest in a series of tactics deployed by Enbridge and its allies to pressure Michigan officials into letting the company continue to occupy the Straits of Mackinac with its antiquated Line 5 pipeline, and later, a proposed oil pipeline tunnel under the lakebed.
PBF also claims that a feared Toledo refinery shutdown, which research cited above dispels, would seriously impinge on the supply of jet fuel at Detroit Metropolitan Airport, driving up fares or reducing flights, or both. The claim is that 40% of the jet fuel used at the airport comes from refined Line 5 petroleum. But PBF and the Marathon Detroit refineries appear to supply only about 9% of the jet fuel used at the airport each day, and again alternative pipeline sources can more than make that up.
It is worth noting that prior to PBF’s claims made in 2019, the impacts of a Line 5 shutdown on Metro Airport jet fuel had never before been raised as an issue in the Line 5 debate. Now Canadian officials are singing the same tune to bring political pressure on the Whitmer administration, claiming this week that Line 5 “is the single largest supply for gasoline, ultimately, in southern Ontario; for aviation fuel out of the Detroit airport; for heating fuel in northern Michigan; for the refineries in northern Ohio that fuel much of the Midwest U.S. economy.”
For its part, Enbridge has a track record of misleading the public and governments about its performance, including failure for 3 years to report bare spots in the protecting coating on Line 5 in the Straits, violating for several years the safety conditions of its easement agreement to occupy the public waters and bottomlands of the Straits, and running a dubious advertising campaign claiming to protect Michigan’s water. Enbridge’s and allies’ recent claims are consistent with the company’s apparent philosophy of avoiding transparency and saying anything to keep Line 5 petroleum and profits flowing.
Key Facts, in a Nutshell
Jobs, let’s talk jobs!
Continuing to operate the decaying Line 5 risks jobs. Many jobs. Shutting down Line 5 will protect hundreds of thousands of jobs in Michigan’s tourism economy. According to a FLOW-commissioned report in May 2018 conducted by an Michigan State University ecological economist, direct spending by tourists supports approximately 221,420 jobs, and the total tourism economy in 2016, including direct, indirect and induced impacts, supported 337,490 jobs—approximately 6.1% of total employment in Michigan.
Toledo PBF Refinery
- Enbridge’s and fossil-fuel industry allies have a track record of false and unsubstantiated claims and a lack of transparency.
- The numbers are inflated:
- Enbridge and refineries and some politicians are misleading the public. They falsely claim that the two Toledo refineries and one Detroit refinery, and by extension the jobs there, are fully and wholly dependent on Line 5, including a large number of jobs at these refineries. The refineries supposedly affected are: Marathon-Detroit; BP-Husky-Toledo — which carries no Line 5 feedstock because it’s a tar sands refinery that takes feedstock from Line 78 (formerly Line 6B), and PBF-Toledo. PBF states in its 2018 annual report for stockholders that it “processes a slate of light crude oils from Canada, the Mid-continent and the U.S. Gulf Coast.”
- The refineries rely on multiple pipelines and suppliers, and they say so in writing.
- Marathon refinery primarily uses dilbit, which Line 5 doesn’t currently carry.
Detroit Metropolitan Airport
- In a letter to Michigan Gov. Gretchen Whitmer, Ohio Gov. Mike DeWine claimed, “our refineries supply the majority of aviation fuels to Detroit Metro Airport” and asserted shutdown of Line 5 would lead to airline schedule disruptions.
- But 2020 jet fuel consumption at Detroit Metro will total 1,658,000 gallons per day, according to a 2010 estimate by the airport. Based on numbers published by PBF, BP Husky and Marathon Refineries, Line 5 appears to supply only about 10% of the jet fuel at Detroit Metro Airport, not 40% as claimed by Ohio Gov. DeWine. Both Marathon and PBF have other crude oil sources, and therefore other pipelines could provide feedstock to satisfy regional jet fuel needs. Alternatively, other nearby refineries in Illinois, Indiana and Ohio could make up this shortfall.
Bottom line: Shutting down Line 5 will protect hundreds of thousands of jobs. A Line 5 shutdown would not significantly impact jobs at Toledo refineries. There is absolutely no evidence that a shutdown would impair operations at Detroit Metro Airport.
- Marathon 2019 total capacity: 140,000 bpd https://www.
marathonpetroleum.com/ Operations/Refining/Detroit- Refinery/
- Increase of Heavy Crude to 115,000 bpd https://www.myplainview.com/
news/article/Marathon- refinery-seeks-support-for- second-8578737.php
interest/companies/article/ 17286350/marathon-to-upgrade- expand-detroit-refinery
- BP Husky capacity and crude feed: https://www.hydrocarbons-
- PBF Capacity: 170,000 bpd https://investors.
pbfenergy.com/~/media/Files/P/ PBF-Energy-IR-V2/documents/ annual-reports-and-proxy/pbf- energy-2018-annual-report.pdf
- PBF Truck terminal at Toledo: 22,500 bpd; https://www.pbflogistics.com/~
/media/Files/P/PBF-Logistics- IR-V2/reports-and- presentations/20190514-pbfx- may.pdf (Appendix)
- Jet Fuel Consumed per day at DTW: https://www.metroairport.com/
sites/default/files/business_ documents/masterplans_ 2009archive/04_-_demand_ capacity_facility_ requirements_2-16-10.pdf