“Let’s be clear: the ‘Line5’ oil spill threat to the Great Lakes won’t be solved by emergency anchor rules that Gov. Whitmer called for today,” said Liz Kirkwood, executive director of FLOW. “The real solution to the threat of Line5 in the Straits of Mackinac is to shut it down now.”
“The Enbridge oil pipelines are past their life expectancy, bent, and battered. The governor’s duty is to protect the Great Lakes from Enbridge, which has a well-documented track record of deceiving the state of Michigan about the condition of Line5. The fastest way to protect the driver of Michigan’s economy and drinking water source for half of all Michiganders is to revoke the 1953 easement allowing Enbridge conditional access to the state’s waters and bottomlands. Burying this risk in an oil tunnel, which the Whitmer administration is negotiating now with Enbridge, is not a solution. It’s a recipe for another century of risk to our waters and our climate.”
Images and video were released yesterdayshowing damage to the Line5 oil pipelines in the Straits of Mackinac from an April 1, 2018, anchor strike. The footage showed a gash across the east pipeline and several dents, exposed steel, and scrapes on the west pipeline. The longest dent is nearly two–feet long. Enbridge supplied the video and photos to the U.S. Senate Committee on Commerce, Science, and Transportation and to the U.S. Coast Guard, which is investigating the anchor strike. Enbridge told the committee they considered the evidence ‘confidential’and didn’t want it published. U.S. Senator Gary Peters (D-Mich.) released the footage this week, after conferring with the Coast Guard.
Today, Michigan Governor Gretchen Whitmer directed the state Department of Natural Resources to proactively file an emergency rule to prevent anchor strikes in the Straits of Mackinac. According to the governor’s office, the emergency rule “will require large vessels to verify no anchors are dragging before passing through the Straits.” Whitmer also made a formal request to the U.S. Coast Guard to create a similar rule for all foreign vessels, which lie beyond state authority.
Above: FLOW’s Liz Kirkwood speaking in opposition to a proposed oil tunnel in the Straits of Mackinac, during a November 8, 2018, hearing in St. Ignace.
In the world of public relations, there are facts, exaggerations, and untruths. Right now, Enbridge is bombarding the people of Michigan with hazy PR claims that it has safely operated the Line5 oil pipelines in the open waters of the Straits of Mackinac for the last 66 years.
The Canadian energy pipeline giant, however, conveniently fails to tell the public that it has allowed the pipelines to deteriorate badly, bending and grinding on the lake bottom in the fierce currents. Enbridge also neglects to mention that on April Fools’ Day 2018, Line5 threatened to dump its oil into the Great Lakes when a tugboat anchor struck, and risked breaching, the underwater pipelines.
Rather than seizing on this near-disaster to decommission the decaying pipeline infrastructure built in 1953, the Snyder administration instead spent its final eight months in office cementing a private pact with Enbridge. The backroom deal would leave Line5 vulnerable to another anchor strike or rupture for up to a decade while Enbridge explores the feasibility of building an oil tunnel under the Straits.
Michigan’s new attorney general, Dana Nessel, in late March correctly determined that the tunnel law passed hastily in the waning days of the 2018 lame-duck legislature was unconstitutional. Gov. Gretchen Whitmer later that same day directed all state departments to halt work on tunnel permitting. But Gov. Whitmer’s recent opening of negotiations with Enbridge seeking to speed up the stalled tunnel process contradicts her own directive and circumvents a transparent public process.
Trying to hasten a bad idea won’t make it any better. While seeking to revive Snyder’s 99-year tunnel deal with Enbridge risks undermining Gov. Whitmer’s own goal to combat climate change risks and impacts.
And Enbridge and the former Snyder administration’s claims that the proposed oil tunnel would serve a public purpose by also housing electrical and other utilities is a ruse that masks an enormous risk of explosion, as experts advising FLOW determined in prior research.
Just today, in fact, an electrical supplier to the Upper Peninsula – American Transmission Company or “ATC” – issued a letter indicating that it has no intention of running its 138,000-volt electric lines through the proposed oil tunnel. “A tunnel of uncertain timing, later in the decade, does not serve the public,” the letter stated. “ATC does not believe that installing high voltage electric lines in close proximity to high pressure oil or gas lines is a good idea.”
It’s never been clearer that Enbridge is pretending there’s a public purpose to their private oil tunnel in order to gain access to the public waters and bottomlands of the Great Lakes. The Great Lakes Submerged Lands Act requires there be a “public purpose,” no impairment or interference with fishing and other public trust uses and rights of citizens and communities, and a showing of no feasible and prudent alternative for transporting Canadian oil back to Canada. The state of Michigan must restore the rule of law and transparency by requiring Enbridge to apply to build a tunnel in the Straits under the law, not negotiate occupancy of public bottomlands behind closed doors.
The real solution to the Line5 threat must protect the Great Lakes, which define Michigan, drive our economy, and provide drinking water to half the state’s population. Gov. Whitmer must heed her campaign promise to shut down Line5, while implementing a common-sense backup plan for propane transport in the Upper Peninsula using truck, train, or a small new pipe that doesn’t cross the Straits of Mackinac.
Let’s cut through Enbridge’s PR-fog and get the facts straight. Line5 is not vital energy infrastructure for Michigan. More than 90 percent of the oil in Line5 comes from and flows back to Canada.
Enbridge’s dismal track record is underscored by its 2010 Line 6B Kalamazoo River disaster – known as the largest inland tar sands oil spill in U.S. history – and extends to Line5, which has leaked in total over a million gallons of oil in Michigan and Wisconsin from at least 33 known spills since 1968.
Infrastructure needs abound in Michigan – ranging from our failing drinking water and wastewater infrastructure to the aging Soo Locks and a long-term clean energy plan for the U.P and the state as a whole. Let’s shut down Line5 and create jobs focused on those real needs, instead of protecting Enbridge’s private interest in our public waters.
FLOW Statement on Negotiations Between Gov. Whitmer and Enbridge on Line5 Tunnel, Pipeline
Traverse City, Mich. –FLOW (For Love of Water) issued the following statement on the disclosure that Gov. Gretchen Whitmer and Enbridge Energy will discuss expediting construction of an oil tunnel beneath the Straits of Mackinac while the company’s troubled Line5pipelines continue operation in the Straits:
“We are concerned about this development. Every day that the Line5pipelines continue to operate is a risk to our precious Great Lakes,” said FLOW executive director Liz Kirkwood. “State government’s efforts should first and foremost be devoted to shutting the pipeline down, not negotiating its continued operation while a tunnel is explored and possibly built.
“Now that the Governor has chosen to engage in this process, we hope and trust it will be a transparent one. It is unfortunate that her predecessor engaged in secret talks on agreements with Enbridge, and the lame-duck Legislature was so eager to benefit Enbridge that it passed a sloppy statute that the Attorney General ruled unconstitutional. We are confident this Governor will operate differently,” Kirkwood said.
“We are also hopeful that the Governor will restore and apply the rule of law to Enbridge’s operations in the Straits. Any easement or lease of Great Lakes bottomlands and any private control for a 99-year tunnel by a private company like Enbridge for a private operation must be authorized under the Great Lakes Submerged Lands Act (GLSLA),” said Jim Olson, President of FLOW.
“The GLSLA ensures a public review, analysis, participation, and a determination under standards that protect the public trust in the waters of the Great Lakes and the soils beneath them from privatization and impairment. It also ensures a thorough evaluation of feasible and prudent alternatives, including ones that do not involve use or control of the Great Lakes. No agreement between the executive branch and a private company can override this fundamental law,” Olson said.
Now that Michigan’s governor and attorney general have sunk the oil tunnel scheme hatched by the last administration, I’m asked nearly every day: What can citizens and state leaders do to shut down the propped-up, banged-up Line5 oil pipelines in the Straits of Mackinac for good?
Here’s my answer, as succinctly as I can distill it, accompanied by a summary of the law and political history in play.
So what should Governor Whitmer and Attorney General Nessel do?
Governor Gretchen Whitmer and Attorney General Dana Nessel must take swift and comprehensive actions to review and reverse the improper failure of the former Snyder administration to bring Line5-owner Enbridge under the rule of law. Enbridge has had its way with Michigan’s prior elected officials, and it is time to call a halt to this nonsense. Here are the steps to getting Enbridge out of the Great Lakes for good:
Proposed Oil Tunnel:
Send a Letter: Tunnel Deal Is Dead– Governor Whitmer and Attorney General Nessel should send a formal letter to Enbridge advising the company that its agreements calling for a transfer or occupancy of the Straits of Mackinac public trust bottomlands, the new state-granted easement, and 99-year lease for the proposed oil tunnel that would house a new Line5 are unenforceable unless Enbridge has obtained authorization under state law – the Great Lakes Submerged Lands Act (GLSLA).
Line5 in the Straits:
Send another Letter: No Life Support for Line5– Governor Whitmer and the Michigan Department of Environmental Quality (DEQ), along with Attorney General Nessel, should send a letter to Enbridge advising it that the agreements purporting to grant Enbridge occupancy and use of waters and bottomlands the existing Line5 for 10 years or more are unenforceable, because the former administration and Enbridge failed to obtain the required authorization under the GLSLA.
Apply the Law to the Redesign of the Ailing Pipelines – Governor Whitmer and the DEQ, along with Attorney General Nessel, should investigate and correct the lack of review and showings required by the GLSLA and public trust law for the substantial change in design implemented for the 3 miles of pipeline elevated above the lakebed under the guise of “repair.”Enbridge should be instructed that it must show the risks and magnitude of harm are minimal and that there exist no other alternative than the existing line in the Straits or Great Lakes.
How Did We Get Here on Line5? Tracing the Law and the Politics
The plotting of former Governor Snyder’s administration and Enbridge to hand over the public trust soils and bedrock under the Straits of Mackinac for the company to build and operate a new crude oil pipeline in a tunnel for 99 years has been put on hold.
On her first full day in office, Governor Gretchen Whitmer asked Attorney General Dana Nessel for a formal opinion on whether the Snyder-Enbridge agreement and legislature’s stamp of approval through a lame-duck law known as “Act 359” to hand over the Straits for Enbridge’s tunnel to Enbridge was constitutional.In late March, Attorney General Nessel found it was not constitutional because the legislature tried to graft a private tunnel-pipeline project onto a public infrastructure law that governs a public icon—the Mackinac Bridge.
Revoke the Easement – Attorney General Nessel along with the Department of Natural Resources (DNR), along with the above actions, revoke the 1953 easement because under the current circumstances the existing Line5 is no longer in compliance with the common law standards of the paramount interests of the Great Lakes protected by public trust law; if Enbridge desires to continue using the existing line in the Straits, the company must submit an application for authorization of such use and occupancy along with the authorizations identified in this list.
Increase Insurance Requirement and Verify It – Governor Whitmer, the DEQ, and the DNR, with the Attorney General, should require Enbridge to submit financial assurances that cover the worst case economic and natural resources damages of at least $6 billion (significantly more than the current cap of $1.8 billion), retain qualified experts to determine the adequacy of those assurances, and require Enbridge to name the State of Michigan as an “additional insured” and/or “named insured” on its insurance coverage for Line5. Inadequate insurance is another cause for revoking the easement.
Once the Governor and Attorney General do these things, they will have taken action consistent with their pledge in being elected to lead the State and protect the Great Lakes, by nullifying the improper actions and agreements of their predecessors and bringing Enbridge, finally, under the rule of law. Regardless of the outcome, the interested parties, communities, and persons in this controversy and the government will be required to make determinations concerning the fate of Line5 in an open forum based on facts, science, and law.We are ruled by law, not by self-serving agreements that were plotted to avoid it.
Given President Trump’s executive orders this week to water-down or smooth over federal laws and regulations affecting water, the Great Lakes, and pipelines, it is more critical than ever that Governor Whitmer and Attorney General Nessel exercise the full jurisdiction and authority they and the State of Michigan under its exclusive power over use of the waters and bottomlands of the Great Lakes, its lakes and streams, public lands, and the public trust in the Great Lakes and navigable waters and public common property of Michigan. This trust imposes a duty on our leaders to protect the interests of citizens, the legal beneficiaries of this trust. Not the President, not Congress, not federal agencies, or state government can repeal, limit, or narrow the state’s duties and citizens’ individual and common rights under this public trust.
What Should Citizens Do?
It is quite simple: Citizens should do what they always do best. Continue to stay involved, increase communications to Governor Whitmer, Attorney General Nessel, and the Director of the DEQ, and the DNR.These communications should do the following:
How Did We Get Here on Line5? Tracing the Law and the Politics
The plotting of former Governor Snyder’s administration and Enbridge to hand over the public trust soils and bedrock under the Straits of Mackinac for the company to build and operate a new crude oil pipeline in a tunnel for 99 years has been put on hold.
On her first full day in office, Governor Gretchen Whitmer asked Attorney General Dana Nessel for a formal opinion on whether the Snyder-Enbridge agreement and legislature’s stamp of approval through a lame-duck law known as “Act 359” to hand over the Straits for Enbridge’s tunnelto Enbridge was constitutional.In late March, Attorney General Nessel found it was not constitutional because the legislature tried to graft a private tunnel-pipeline project onto a public infrastructure law that governs a public icon—the Mackinac Bridge.
Under Michigan’s constitution, the legislature can’t pretend that the title or object of a law is one thing, and then pass a law that turns it into something else.In short, the Snyder-Enbridge agreements and Act 359 would have contorted the public ownership and control approach of the Mackinac Bridge into a privately controlled tunnel.
Put another way, government is not supposed to be in the business of fostering private interests under the beguiling promise that it’s doing something for the public. If a law says a project is public, it better be public.The Enbridge tunnel corridor and project is far from a publicly owned and operated project, so the Attorney General had no choice but to rule the scheme unconstitutional.State agencies must adhere to the ruling; this means, the DEQ, DNR, and Public Service Commission cannot entertain requests for approvals or permits or take other actions that would implement the Enbridge tunnel and new pipeline project.
Legal Lens: Public Bottomlands, the Public Trust, and a Private Tunnel
The waters of Great Lakes and the soils beneath them are owned and held in public trust to protect the paramount rights of Michigan citizens, the primary beneficiaries of this legally recognized trust.The state as trustee is prohibited from leasing, granting easements, or allowing occupancy and use of these waters and soils to a private person except where: (1) the legislature expressly authorizes the conveyance or use; (2) an agency finds that the existing or proposed use serves primarily a public purpose related to navigation, fishing, boating, swimming, drinking water, or similar public need; and (3) makes a finding that the use will not interfere with or impair these protected public trust uses or the fish, habitat, and ecosystem.
To make sure the public trust is not violated, Michigan passed the Great Lakes Submerged Lands Actin 1955. Anyone who seeks authorization of a new or existing easement, lease, or agreement for use or structures, or expansion of use or structures, must apply for and obtain authorization from the DEQ under the GLSLA.In short, the Great Lakes and the soils beneath them are strictly protected and controlled by the State for its citizens under the rule of law. No person or corporation can use, occupy, control, or lease the public trust waters and soils of the Great Lakes without the authority and findings by the state that the public trust will not be violated.
Act 359 and the tunnel agreement approved an easement from the DNR to Enbridge for the new tunnel and pipeline for 99 years without obtaining the required authorization under the public trust doctrine and GLSLA.Because Act 359 and related agreements violated the state constitution and the GLSLA, the project dodged the rule of law. Until Enbridge and state agencies obtain this authorization, the project is prohibited.
Political Maneuvers: A $6 Billion Gamble with Line5 in the Straits
Now for the $6 billion-dollar question: What about existing Line5 in the Straits? I say $6 billion, because the range of massive economic and natural resources damage from a release ranges from $1.8 to $6 billion in Michigan (and up to $45 billion to the region’s shipping and steel industries). When the Michigan Petroleum Pipeline Task Force came out with its report four years ago, it concluded the risk of the existing Line5 in the Straits (that runs down through the Lower Peninsula to Sarnia, Canada) was unacceptable.Even former Attorney General Bill Schuette said that Line5’s days “are numbered.”
Under basic risk standards, when a risk is too high or unacceptable, the corporation or government in charge must determine if there is an alternative that eliminates the risk. If there is, the risk must be terminated. Four years later, Line5 is operating at a full-tilt 540,000 barrels a day. That is 23 million gallons a day, 80 percent beyond the original design capacity contemplated by the 1953 easement.
As noted above, the state has jurisdiction of the public trust bottomlands and waters of the Straits under the public trust doctrine and the GLSLA.Any new or substantially changed structure or improvement must be authorized by the DEQ, which is precisely what the Snyder administration failed to require.
Former State Officials Defer to Enbridge on “Repairs,” Continued Use of Line5
First, the governor and state-Enbridge agreements for a new tunnel and 99-year pipeline allowed Enbridge to operate the existing Line until 2028—another 10 years! If the tunnel and new line are not in operation by then, Enbridge could continue using the existing Line5 for more than 10 years! Worse yet, the agreements would allow Enbridge to extend operation of the existing Line5 beyond 14 more years (counting the 4 years of inaction to date) if there are delays. It looks like Enbridge with the approval of the Snyder administration is more interested in operating the existing Line5 another 10 or more years than build a $500 million tunnel.
Second, strong currents in the Straits scour the soils and undermine the integrity of Line5.For the past 18 years, the DEQ has allowed Enbridge to add anchor supports to shore up this failure in the original design of the pipeline built in 1953 as “repairs.” Since 2001 when Enbridge added 16 supports as an “emergency repair,” the DEQ has permitted more than 200 supports as “repairs,” turning Line5 into a three-mile underwater “suspension bridge” above the lakebed.By labelling Enbridge’s supports as a “repair” or “maintenance,” the DEQ has openly allowed Enbridge to avoid the required review and authorization of a near total change in design of existing Line in the Straits. As a result, Enbridge has avoided and the public has been denied the required findings that the existing Line5 poses no more than a minimal risk of impairment and that there are no other alternatives to using the Straits—such as using the extra capacity in the company’s new Line 78 across southern Michigan to Sarnia.
Local Guardians of the Great Lakes Challenge the State’s Line5 Permits
Fortunately, the City of Mackinac Island, the Grand Traverse Band of Ottawa and Chippewa Indians, and the Straits of Mackinac Alliancehave filed petitions contesting the failure of the DEQ to demand Enbridge to file an application and obtain authorization for its total change in design of the existing Line5.If successful, in addition, to inadequately narrow review of the anchor supports, Enbridge will have to apply for and prove that the risks are acceptable and that it has no other alternatives to move oil from Alberta, Canada.
It is critical for the state to exercise the rule of law because on top of the change in design, a response to a spill is impossible during winter ice or storm conditions.On April 1, 2018, a ship anchor dragging across the lakebed dented or gouged the existing line. On March 29, 2019, a federal court ruled that the federal government’s pipeline safety agency failed to adequately review the Enbridge Line5 oil spill contingency plan in violation of the National Environmental Policy Act.
In the wake of an opinion by Attorney General Dana Nessel invalidating a law that sought to give away Great Lakes public trust bottomlands to Enbridge for 99 years for a private oil tunnel, Governor Gretchen Whitmer has now ordered state agencies to pause permitting on Line5, an action hailed by FLOW (For Love of Water), a Great Lakes law and policy center based in Traverse City.
“We welcome the Governor’s swift, prudent action to halt the legal effect of the law and tunnel and side agreements,” said Jim Olson, founder and president of FLOW. “Now, it’s time to bring the existing perilous Line5 in the Straits under rule of law and decommission it as quickly as possible.”
“The backroom deals creating Enbridge’s proposed oil tunnel couldn’t survive public scrutiny, and now we know they can’t survive the rule of law,” said Liz Kirkwood, Executive Director of FLOW. “It’s time to focus on Michigan’s true energy future and protect Michigan’s Great Lakes and our economy from a Line5pipeline rupture. The path forward for Michigan is for Gov. Whitmer to immediately begin the process of decommissioning Line5 in the Straits of Mackinac.”
FLOW supports attorney general’s process and opinion, which is binding on state agencies and rejects the fatally flawed law and undermines side agreements on Enbridge oil pipelines, proposed tunnel in Mackinac Straits
In a major step toward restoring the rule of law, Michigan Attorney General Dana Nessel issued an opinion today declaring unconstitutional a hastily crafted law that sought to give away Great Lakes public trust bottomlands to Enbridge for 99 years for a private oil tunnel, while allowing the aged, dangerous existing “Line5” oil pipelines in the Straits to continue operating for another decade as the tunnel is considered and possibly built.
The move comes in response to a formal requestby Gov. Gretchen Whitmer and is critical to unpacking the layers of problems with the law creating the Mackinac Straits Corridor Authority that the lame-duck legislature rushed through in late 2018.
“We applaud Attorney General Nessel for clearly recognizing the legislative overreach, restoring the rule of law, and stopping the attack on the Great Lakes and the state constitution, which demands that the state’s air, water, and natural resources are treated and protected as ‘paramount,’” said Liz Kirkwood, an environmental attorney and Executive Director of FLOW (For Love of Water), a Great Lakes law and policy center based in Traverse City.
The attorney general’s opinion on Public Act 359 is binding on state agencies and voids the tunnel agreement called for by the law, and also nullifies the legal effect of the side agreements reached between the state of Michigan under then-Gov. Rick Snyder and Line5-owner Enbridge. Those agreements allowed continued oil pumping through the Straits, where Lake Michigan meets Lake Huron, and an easement and 99-year lease of Great Lakes public bottomlands to Canadian-based Enbridge for private control of the tunnel for its own gain.
Public Act 359 and the related agreements for a tunnel and continued use of the existing, flawed Line5 were not authorized under the standards of public trust law; the state and Enbridge flouted the Great Lakes Submerged Lands Act (GLSLA) that requires transfers and agreements for occupancy of the soils of under the Great Lakes by trying to avoid and ignore this most basic law and public trust principles.
Public Act 359 and the side agreements are peppered with other serious problems, most of which are covered by the questions the Governor asked the Attorney General to answer, which include:
Adding the tunnel and corridor authority to the 1952 law that created the Mackinac Bridge Authority goes far beyond the original public purpose to build a public bridge;
Establishing a term for members of the board of the corridor authority that exceeds the 4-year limit under Article III of the Michigan Constitution;
Violating provisions of the state constitution that prohibit fostering private or special purposes, the commingling of the government to aid primarily private projects, the appropriation of public property for private purposes, and the entanglement of the credit and taxpayers of the State for primarily private purposes.
“We hope this critical first step by theAttorney General will be followed by an immediate and full review of the Snyder administration’s and agencies’ deliberate evasion of the rule of law and mishandling of the grave and continuing risks of the existing Line5, and the real and imminent threat to the Straits of Mackinac, towns and cities like Mackinac Island, tribal fishing interests, private property interests, businesses, and the rights of the public in the soils and waters of the Great Lakes,” said Olson.
FLOW recommends that Gov. Whitmer take immediate action to end the massive threat posed by the existing Line5in the Straits of Mackinac in a swift and orderly fashion based on the rule of law under our state constitution, statutes, and the public trust doctrine in the Great Lakes, including by:
Acknowledging that State of Michigan agencies are bound by the attorney general’s opinion.
Sending a letter to Enbridge indicating that the company should decide for itself, if it wants to build a new oil tunnel, and apply, if it chooses under the Great Lakes to construct a tunnel under the rule of law. The rule of law requires a full consideration of the risk to the paramount public rights in the soils and waters of the Great Lakes, and a showing that the company has no prudent and feasible alternatives to using the Great Lakes as a shortcut for western Canadian oil on its way to refineries in eastern Canada as well as overseas markets.If the company does not chose to do this, or cannot satisfy these mandatory requirements that protect the Great Lakes, then it should choose to use other parts of its several-thousand mile system.
Starting the process to decommission the 66-year-old Line5pipelinesin the Straits of Mackinac, which are operating without lawful authority, in violation of the public trust and GLSLA, and in violation of their 1953 easement granted by the state. If Enbridge chooses to continue operating the existing Line5 in the future, it can apply under the GLSLA for new authority to continue using Line5 if it can demonstrate little risk and no feasible and prudent alternative to the unacceptable existing Line5, but the state is not obligated to agree.
“Public Act 359, coupled with the State’s public entanglement with Enbridge, has put private gain and economic interests above the State’s and public’s paramount trust interest in the waters and soils of the Great Lakes,” said Olson. “The unconstitutional law and entangled state and Enbridge agreements represent one of the largest, if not largest, threats in the state’s history to the state’s ownership and public trust duty to protect the public’s rights and uses from private takeover or harm to the Great Lakes.”
This is the first in a series of essays by FLOW board member Rick Kane on the vital issues of risk management and the responsibilities of public officials under the public trust doctrine. The issue has special meaning in light of the risks posed by the twin Enbridge pipelines that convey 23 million gallons of petroleum products through the Straits of Mackinac daily. Rick is the former Director of Security, Environment, Transportation Safety and Emergency Services for Rhodia, North America. He is certified in environmental, hazardous materials, and security management, and is a graduate of the University of Michigan and University of Dallas.
Managing Risk and the Public Trust
Every day, we manage risk in our personal lives and for our families. I wonder what the weather will be like today; what should I wear, or do I need to prepare differently for my trip? There are consequences for not preparing, like getting wet, but the weather forecaster helps by providing the probability for rain and threat of severe weather. We listen, assess the risks, consider alternatives, and make a decision.
Envisioning scenarios, forecasting, and assessing risk are management activities performed in a variety of organizations. If the risks are too high, we take action to reduce them or, better yet, implement an alternative that eliminates the risk entirely. Alternatives analysis is a known but underutilized approach. Too often, organizations reduce risk by making incremental changes and not by using an alternative that could eliminate it. “It is not acceptable to harm people when there are reasonable alternatives - - - - It is not acceptable to harm the environment when there are reasonable alternatives.” In her book, Making Better Environmental Decisions, An Alternative to Risk Assessment, scientist and risk expert Mary O'Brien promotes alternatives - not just accepting risk assessments and incremental risk reduction strategies, i.e. identify and implement risk elimination alternatives.
For the big risks, we depend on elected officials and government regulators to take action in the best interest of public safety, environmental protection and economic interests. The Public Trust Doctrine is an important legal principle that they are required to apply to protect the waters of the Great Lakes. Risk and alternatives assessments are vital inputs needed to reach appropriate decisions under public trust law.
The Public Trust Doctrine holds that government has a solemn obligation to protect the waters of the Great Lakes in perpetuity for public use and enjoyment. The state serves as a trustee and is accountable for managing the waters for the benefit of current and future generations. Any private, public, or commercial existing or proposed use, diversion, or discharge cannot cause harm by materially reducing the flow, changing the levels, or polluting the waters. Those who seek to use, continue to divert, or alter the waters have the burden of proof to show they will not impair, pollute, or cause harm, or the proposed action is not permitted. Under the public trust, the waters can never be controlled by or transferred to private interests for private purposes or gain. Public rights cannot be alienated or subordinated by our governments to special private interests. This means that all reasonable private use and public uses may be accommodated so long as the public trust waters and ecosystem are not harmed and paramount public right to public uses are not subordinated or impaired.
For government officials, it is a duty to comply with the Public Trust Doctrine and ensure that the principles are followed. Citizens should understand public trust and hold their elected officials accountable for protecting the waters of the Great Lakes on their behalf and for future generations.
It Takes All Kinds
Growing up in the chemical industry, working in the private, government and non-government sectors taught me that a balance between the sectors is required to obtain feasible and acceptable outcomes. Private companies cannot be relied upon to self-regulate as not all of them have everyone’s best interest in mind. But private sector technical experts are positioned to identify feasible, safer technologies and alternatives. They may also need to be pushed to implement them by shareholders and regulators. Elected officials and government regulators can ensure that the competitive field is level for industry players and that companies are following the rules.
But there are cases where rules go too far, resulting in unintended consequences. Professional societies and standard-setting organizations provide direction to scientists, engineers, and member professionals on ethics and best practices that they should be applying on the job; strong, ethical professionals make strong organizations. And non-government organizations (NGOs) promote public, social, and long-range goals, but there must also be a balance and analysis for unintended consequences.
Taking a systems or macro/micro view is also very important in assessing risk and alternatives. Limiting the boundaries of study or scope prematurely can result in flawed and fatal conclusions. Here is an example that affected a large part of the world.
When Things Go Wrong, and Hindsight Is 20/20
Risk management involves the use of simple to very complex methodologies. However, they all depend on a proper definition of the scope of study, the system, relevant facts, key assumptions, and taking action to fill in important information gaps. Flawed assessments result when the scope of studies are too limited, methodologies are inappropriately modified or faulty, biased assumptions are used. O'Brien’s book provides an excellent overview on where risk assessments can go wrong.
The Daiichi Nuclear Power Plant Disaster was the second worst in history, just behind the April 1986 Chernobyl disaster. We use the Fukushima incident in teaching risk and process safety management. The Daiichi nuclear reactors were located on the Japanese coast and designed to withstand an earthquake and tsunami. The actual earthquake was larger than the safety design basis and the tsunami higher. The earthquake/tsunami triggered a number of failures that all had the same origin, in risk analysis terminology, “a common cause failure” – the earthquake/tsunami.
For safety, the reactors had a “layered or defense-in-depth” design to enable a safe shutdown in emergencies. But:
1st line - electrical supply from off-site to power the cooling water pumps, this supply was lost in the initial earthquake.
2nd line - emergency generators installed with the electrical switchgear in the basement, which flooded along with the generator fuel tanks when the tsunami hit.
3rd line – the battery back-up system did not have enough capacity to enable completion of the shutdown.
And the emergency response was delayed because the company and country thought they could handle the incident on their own and did not want to admit how bad things really were.
In hindsight, the consequences of a nuclear meltdown were known, but could a better assessment have been done for the threat of locating the facility near the coast in an earthquake, tsunami prone area? What about the vulnerability analysis on the emergency shutdown systems and consideration of common cause failures? Was the “worst-case scenario” analysis faulty or biased for some reason? Today, parts of the area are still uninhabitable, although some residents have recently begun to return even when warned that radiation levels are still above safe levels. What next as this disaster continues?
Acceptable risk levels are based on the stakeholder’s tolerance for the risk. For example, for some citizens, an acceptable flood risk might be once every 500 years, while the acceptable risk of a human fatality from an industrial accident might be less than the probability from natural causes, say one in one million.
Risk assessments may be required to comply with federal, state, and/or local laws, insurance company policies, or company procedures. There are ethical principles: you cannot impose risk on someone else, and elected officials and government regulators have a duty to protect constituents and the environment. If you cannot live with a risk because the consequences are too high, then you must identify and implement an acceptable alternative. A Michigan high-risk and controversial example is the Enbridge pipeline.
Here are key terms in risk management:
Risk is a measure of human injury, environmental damage, or economic loss in terms of the likelihood that an incident will occur (probability) and the magnitude of the injury or loss (consequence).
Risk = Probability x Consequence
Probability can be further defined as a function of the threat, an event with the potential to cause loss or damage and the vulnerability, which is any weakness in the system or asset, that can be affected or exploited by accidental, natural, or man-made causes resulting in the harm. Thus, risk can then also be defined as:
Risk = Threat x Vulnerability x Consequence
Toxicological Risk Assessments for human health and living organisms define threat and vulnerability in terms of exposure and dose-response assessments to a harmful substance.
An Exposure assessment covers the most significant sources of environmental exposures, population potentially exposed, and concerns about cumulative or multiple exposures.
For a dose-response assessment, a dose-response curve for the route and level of exposure observed is developed and compared to the expected human or living organism exposure in the environment.
Risk assessments follow a stepwise process and can be a qualitative, judgement-based analysis, or a complex quantitative mathematical analysis.
Scope, System Boundaries, Macro/Micro, and Dynamics- When conducting a risk assessment, the definition of the scope (subject of study), system boundaries, and dynamics are extremely important. Events occurring outside of the boundaries and transitions affect risk. Major risks can be transient and occur during take-off and landing, start-up and shutdown, transition from one physical state to another, movement from one place to another, under certain weather conditions, and so on. AIChE, Center for Chemical Process Safety
The risk assessment process is known as Hazard Identification & Risk Assessment (HIRA, shown below). If the level of risk after one pass is not acceptable, risk reduction measures are added, and the process is repeated until an acceptable level of risk level is achieved; if not, a better alternative is pursued, and the current approach abandoned.
The Enbridge Pipeline - Line5 Across the State of Michigan
Enbridge’s Line5 is a 66-year-old pipeline that transports crude oil and natural gas liquids (NGLs) across the State of Michigan from Superior, Wisconsin to Sarnia, Ontario. From Superior to St. Ignace, Michigan, Line5 is a 30-inch pipeline but divides into two 20-inch pipelines which then pass along the bottom of the Straits of Mackinac and merge back into a 30-inch pipeline west of Mackinaw City to Sarnia. Many studies have been conducted on the 20-inch pipelines at the Straits covering environmental and economic risks, pipeline mechanical integrity, structural modifications, failure modes, and numerous legal issues. And recently, the State of Michigan signed a new agreement for a study on replacing the twin pipelines with a new pipeline and tunnel under the Straits. Information can be found at on the FLOW and Michigan Pipeline Safety Advisory Board websites.
The Streetlight Effect
The streetlight effect, or the drunkard's search principle, is a type of observational bias that occurs when people only search for something where it is easiest to look. Both names refer to a well-known joke:
A policeman sees a drunk man searching for something under a streetlight and asks what the drunk has lost. He says he lost his keys, and they both look under the streetlight together. After a few minutes, the policeman asks if he is sure he lost them here, and the drunk replies no, and that he lost them in the park. The police officer asks why he is searching here, and the drunk replies, "this is where the light is."
The risk analyses have primarily focused on the twin 20-inch pipelines and consequences of a crude oil release. However, the system risk must include the entire pipeline and products transported. The design, fabrication and protection technologies of 30-inch pipelines above and below the Straits are at lower standards than the 20-inch pipelines. There have been at least 29 leaks in Line5 and a history of ongoing repairs and patching. The replacement of the 30-inch pipeline would be a huge expense and most likely be implemented after a tunnel project is started. The risks and lack of discussion (unknowns to the public outside of the Straits) were previously noted by FLOW. Living Along Enbridge Line5 in Michigan.In only looking at the problem as being under the Straits, consider the allegory "The Street Light Effect."
A Confined Scope– assessments with scopes that are too narrowly defined restrict the consideration of alternatives and opportunities to eliminate risk. There are continuing strong arguments that feasible alternatives to Line5 exist and that the pipeline can be decommissioned on a priority basis. This analysis is beyond the scope of this article, but details can be found at: FLOW Alternatives Report 2015
Poor System Definition - system boundaries for Line5 risk assessments have been limited to the 20-inch pipelines, as this is where the State of Michigan has authority and control over the Mackinac Straits bottomlands, i.e. the system study boundary is being set where there is legal control, not where the full existence of risk occurs. This in turn establishes a crude oil release as the primary threat because the consequences of a natural gas liquids (NGLs), (a mixture of largely propane with some ethane and butane), release would be small in comparison. Thus, this is a legally defined system and not one based on Line5 system risk to human safety, the ecosystem, and economy. An NGL release poses a major risk to human safety and infrastructure along the entire Line5 route. The risk is not transparent to the citizens of Michigan (only looking under the streetlight); they are not provided information on known unknowns and a consideration of possible unknown unknowns.
In terms of the risk equation- Risk = Threat x Vulnerability x Consequence
What are the consequences, threats, and vulnerabilities outside of the Straits? For example, the impact of an NGLs leak.
Consequences - Line5 travels near several populated areas: Ironwood, Manistique, Engadine, Naubinway, St. Ignace, Mackinaw City, Indian River, West Branch, Linwood, Bay City, Vassar, and Marysville, Michigan, and it transports NGLs about 20-30% of the time. NGLs are a liquid under Line5 operating conditions but would flash into a vapor cloud if a leak occurred. According to the Dynamic Risk Assessment Systems, Inc. study contracted by the Michigan Pipeline Safety Advisory Board (MPSAB), a large underwater release under the Straits could create a flame envelope of just under one mile. But what if you are living or traveling near Line5 upstream or downstream of the Straits? A ground level release and fireball could be much larger as the pipeline pressure is higher and distance between emergency shutoff valves greater.
For a crude oil release, Line5 crosses nearly 400 streams and wetlands and runs near many other sensitive public and environmental areas. Studies conducted for the state designate 74 water-crossing locations as “prioritized,” indicating sensitive areas vulnerable to a spill and including endangered species habitats and sites near drinking-water intake pipes. Some of the waterways include the renowned AuSable, Sturgeon, Manistique, and Rapid rivers, and the Upper Peninsula’s Lake Gogebic.
Defining the system in terms of legally controlled boundaries results in the risk to areas outside of the Straits being overlooked. In addition, the December 2018 Enbridge-State agreement enables threat to continue until at least 2024 as tunnel studies are conducted, and beyond if a tunnel project is launched. Meanwhile, the threats outside of the Straits continue.
Vulnerability to failures outside of the Straits have many known unknowns and possible unknown unknowns due to different operating conditions, design and maintenance and inspection programs, and environmental exposure conditions. For the public, there should be many questions, but unfortunately, with the focus on only the Straits, under the street light, citizens do not know that they should be asking safety questions.
Here Are Some Starting Questions
What are the risks for a release upstream or downstream of the Straits, especially for NGLs? What is the safety risk to populated areas from a fireball and the lakes and rivers to a crude oil spill? What are the plans to mitigate the risks now, with and without a tunnel project?
Rick Kane, FLOW Board Member
Based on the agreement signed by the State, current operations at the Straits can continue to 2024 and beyond with minimal additional monitoring and on-site emergency response. Why are “extraordinary” emergency response measures not required to counter the extreme consequences that would occur at the Straits? This is a normal requirement in other high consequence, non-mitigated risk situations.
What are the plans for the entire pipeline system, especially outside of the Straits where the design and mechanical integrity is known to be less than at the Straits? Should citizens expect a segment by segment replacement as was done on Line 6B/78 in southern Michigan?
David Holtz, Communications Coordinator, Oil & Water Don’t Mix, (313) 300-4454, email@example.com
Traverse City, Mich. – If the 66-year-old Enbridge Line5pipelines fail in the Straits of Mackinac, residents, coastal communities, businesses, and the State of Michigan could be left with lasting environmental and economic damage and little or no hope for insurance coverage from pipeline-owner Enbridge for the oil spill, according to environmental and tribal organizations in a teleconference held today. (You can listen to a recording of the teleconference here).
Michigan citizens may believe they are protected, at least at some level, by the insurance Enbridge should be required to have in place to pay the costs of cleaning up an oil spill disaster in the Straits, where Lake Michigan meets Lake Huron. Unfortunately, that may not be the case.
A new FLOW investigation has revealed potential holes in Michigan’s financial protections against a Line5pipeline rupture into the Great Lakes. The potential shortcomings could prove ruinous to communities, residents, and businesses that suffer losses at the hands of a Line5 oil spill in the Straits. The problems can be traced to last year when environmental regulators were largely sidelined by the Snyder administration, which negotiated four Line5 agreements directly with Line5-owner Enbridge from the executive offices of the governor. (See FLOW’s article about the investigation here.)
“The findings of our study suggest that Enbridge’s Line5 oil pipelines in the Straits may never have been adequately insured and – given their age, location, and impaired condition – might be uninsurable,” said Skip Pruss, chairman of FLOW’s board of directors and an energy policy expert. “In its haste to sign agreements with Enbridge, the state during the end of the Snyder administration failed to conduct a study that would evaluate the financial capacity of Enbridge to address a worst-case scenario for damages and claims that may result from an existing Line5 failure.”
The new revelations come as Governor Gretchen Whitmer has issued an executive order and new directives aimed at strengthening the state’s regulatory and administrative oversight capabilities for the Great Lakes, although Republican legislators are seeking to overturn the governor’s order in favor of delegating oversight in part to the businesses being regulated by the state.
Unlike leaders in Minnesota and Wisconsin dealing with Enbridge, there is no evidence that the State of Michigan conducted a risk management and insurance review of any kind, nor does it appear that the State sought any assistance from qualified experts to determine whether the financial assurances Enbridge has proffered would, in fact, protect the State of Michigan and its natural resources as well as coastal communities, citizens, property owners, and businesses.
“While no amount of money can restore an oil-damaged fishery, the freshwater of the Great Lakes, or our cultural heritage, it simply is a dereliction of duty for the Snyder administration to not ensure that Enbridge has insurance that specifically covers oil spill damage and those tribes, communities, families, and businesses that would be harmed for generations to come,” said Bryan Newland, Tribal Chairman of the Bay Mills Indian Community.
A preliminary review raises many questions regarding the adequacy of Enbridge’s financial assurances that are supposed to mitigate the economic harm if Line5 fails. Findings include that Enbridge’s:
General Liability insurance may not cover oil spill clean-up costs, natural resources damages and claims by injured third-parties.
Financial assurances are capped at $1.878 billion dollars, far less than the $6.3 billion estimate of worst-case damages determined by a study by Michigan State University, and a potential $45 billion loss to the nation’s Gross Domestic Product in after just 15 days from disrupting Great Lakes commercial shipping and steel production.
Enbridge Inc., the parent company, is not a signatory to the agreement relating to financial assurances; instead three Enbridge subsidiaries signed the agreement. It is unknown whether these subsidiaries are insured.
The State of Michigan may not be named as an “additional insured” on the insurance policies. If not, then the State of Michigan would have no direct right of recovery against an insurer.
Based upon the preliminary review of the financial assurances intended to mitigate the present economic risks posed by a Line5 failure and the ensuing questions and issues that have been identified by FLOW and independent insurance experts, the State of Michigan should:
Retain qualified experts to determine the adequacy of Enbridge’s financial assurances and to make appropriate recommendations regarding mitigating the magnitude of the financial risks posed by Line5;
Determine to what extent the State of Michigan is bound by the indefinite and inadequate terms and provisions of the “Second Agreement;”
Require Enbridge, Inc., to name the State of Michigan as an “additional insured” and/or “named insured” on its insurance coverage for Line5; and
Seek the termination of operation of Line5 until all financial assurance deficiencies are fully cured and satisfied.
“We are calling on the Whitmer Administration to investigate the apparent lack of insurance for an Enbridge Line5 oil spill in the Straits and address the damage done by Snyder and lame-duck lawmakers before they rushed out the exit doors at the close of 2018, said David Holtz, Communications Coordinator, Oil & Water Don’t Mix. “It’s past time to shut down Line5 before it delivers a direct hit to the very heart of the Great Lakes and the Pure Michigan economy.”
About FLOW and Oil & Water Don’t Mix: FLOW is a 501(c)(3) nonprofit organization based in Traverse City, Michigan, working to protect the common waters of the Great Lakes Basin through public trust solutions. FLOW is a leading legal and scientific voice, and a founding steering committee member of the broad-based, multi-year Oil & Water Don’t Mix (O&WDM) campaign dedicated to preventing a catastrophic oil spill from the decaying Line5pipelines that push 6 billion gallons of oil a year through the open waters of the Straits of Mackinac – the very heart of the Great Lakes. Learn more at www.FLOWforWater.org and www.OilandWaterDontMix.org.