Why a Line 5 Shutdown Just Doesn’t Make Sense

Straits of Mackinac BridgeStraits of Mackinac, Michigan

Just months after President Joe Biden axed the Keystone XL project, the future of another pipeline transporting Canadian oil is hanging in the balance. Now it is the possible shutdown of Line 5 dominating media headlines, a pipeline which has delivered light oils and natural gas liquids (NGLs) that have heated homes and businesses, powered industry and fuelled vehicles in parts of the U.S. and Eastern Canada for more than 65 years.

The impacts of shutting down Line 5 would be harmful to not only millions of people on both sides of the border, but the global environment as well. How so, you might ask? Here’s what you need to know about Enbridge’s Line 5 pipeline and why shutting it down just doesn’t make any sense.

What is the Line 5 Pipeline Anyway?

Line 5 Pipeline Map - Enbridge

Line 5 Pipeline Map - Enbridge

Line 5 is a pipeline that transports more than 500,000 barrels of light crude oils and NGLs per day from Western Canada to refineries in the U.S. and eastern provinces. Built in 1953, the 1,038-kilometre-long pipeline begins in Wisconsin and spans across the upper and lower peninsulas of Michigan where it crosses the Strait of Mackinac and eventually into Canada before terminating in Sarnia, a major refining hub in southwestern Ontario.

Line 5 is a critical supply line for 8 refineries in 3 U.S. states and 2 Canadian provinces, accounting for approximately 42 per cent of the 1.3 million barrels of oil a day refined by these facilities. More recently, Enbridge has confirmed that a Line 5 shutdown would compromise the supply of crude oil to 10 refineries in the region to varying degrees.

Consequences of Shutting Down Line 5 Pipeline

Shutting down Line 5 would result in a massive shortage of gas, diesel and jet fuel in both Ontario and Quebec. Michigan would also suffer a potential 'emergency-declaring' shortfall of fuel as it sources roughly 55 per cent of its annual propane supply from natural gas liquids that are fractionated by refineries in Sarnia and Rapid River which rely heavily on Line 5 for feedstock. Ohio would also see at least a 15 per cent reduction in statewide fuel supply according to Enbridge.

Canadian governments seem to understand just how important Line 5 is not only for trade between Canada and the United States, but for supply of fuel in eastern provinces. In February, Prime Minister Justin Trudeau expressed the importance of the pipeline, stating that, “Line 5 is a vital source of fuel for homes and businesses on both sides of the border.”

Other government leaders have also stepped up in defence of Line 5. “It’s unacceptable. These are 5,000 jobs directly in Sarnia-Lambton, not to mention all of the indirect jobs — I’ll give you an example — Pearson Airport, that’s in my riding, they would basically have to shut it down if they cut this off,” said Ontario’s Premier Doug Ford, a message that was mirrored by several other representatives in his government.

Lost Jobs in Canada & U.S., Airports in Jeopardy

Toronto Pearson International Airport

Toronto Pearson International Airport

Premier Ford is right. Shutting down Line 5 would be disastrous for the Toronto Pearson International Airport, which according to sources gets 100 per cent of its jet fuel from refineries in Sarnia. In other words, Canada’s largest airport – also a global hub which facilitates economic activity by connecting Canadians to all parts of the country and most of the world – would see a majority of operations come to a grinding halt.

Detroit Metro Airport would also see its operations severely impacted by a Line 5 shutdown as the pipeline provides more than half of the jet fuel supplies to the airport. Line 5 also feeds Line 9 which provides feedstock to refineries in Montreal and Lévis. These refineries produce jet fuel for the Montreal and Quebec City airports and would have their production capabilities impaired.

Like Premier Ford, Ontario's Labour Minister Monte McNaughton expressed concerns around Line 5. “Estimates are that we will see more than 5,000 jobs lost locally and another 23,500 lost by those whose work indirectly depends on Line 5. These are vital working-class trade jobs. In many cases, these are the best-paying jobs in all of the skilled trades in the country, that let people provide for their families and support all of our communities,” wrote McNaughton in a letter to Filomena Tassi, his federal counterpart.

Skyrocketing Fuel Prices, More Oil Imports

Enbridge’s Line 5 supplies approximately 45 per cent of Ontario’s crude oil needs and about half the fuel used by Quebec’s refineries to make gasoline. A Line 5 shutdown would send fuel prices in these provinces skyrocketing and new supply would need to be sourced via tanker and rail, or long-term investments in new pipeline infrastructure would be required. Anyone familiar with the investment climate for new oil and gas projects in Canada over the past several years knows today that a new pipeline is highly unlikely.

According to Enbridge, rail could replace just 10 per cent of the lost oil supply to regional refineries, meaning a lot more tankers would have to sail into the Great Lakes to maintain adequate supply. Surely, Line 5 opponents would be in a massive uproar about increased tanker traffic on the Great Lakes as well, which makes you wonder if these protesters ever consider the cause-and-effect relationship between their activism to shutdown pipelines carrying Canadian oil and how it influences sources of supply and the global environment.

Give for example the fact that these tankers would likely be carrying oil produced by nations with much lower scores on Environmental, Social and Governance (ESG) metrics versus Canada and have to travel vast 'GHG-emitting' distances to reach the Great Lakes. None of this makes even a smidgen of sense.

Michigan Propane Supply Not Easily Replaced

shell sarnia refineryShell’s Corunna Refinery - Sarnia Lambton

Line 5 is also an integral part of the fuel supply chain for Michigan; it ships approximately 55 per cent of the state’s propane, and 65 per cent of that used in the state’s upper peninsula. According to one independent analysis, Line 5 accounted for more than 80 per cent of the natural gas liquids used in the Sarnia region to produce propane, which is then shipped back into Michigan across the St. Clair River via a different pipeline and stored at an underground storage facility in Marysville.

Without Line 5, propane suppliers across Michigan would have to source wholesale propane from other markets and ship it in by truck or rail. Differences in cross-state weight restrictions for trucks pose a major logistical challenge as propane dealers would have to purchase or lease vehicles with lighter load limits to haul propane from elsewhere. Fuel prices (a.k.a. propane) would skyrocket, like in Canada.

Michigan’s propane industry projects the shutdown of Line 5 would result in 9,600 rail cars and 30,000 truckloads of propane. In a 2019 interview, Derek Dalling, Executive Director of the Michigan Propane Gas Association, was blunt regarding the challenges presented by a Line 5 shutdown. "The trucks don't exist, the drivers don't exist, the rail cars don't exist,” he said.

Perhaps Greg Rickford, Ontario’s Minister of Energy, Northern Development and Mines summed it up best. “A permanent closure of Line 5 will lead to increased reliance on truck, rail and marine transport, leading to higher costs for consumers, growing congestion, increased (greenhouse gas) emissions and place unnecessary risk on our communities and the environment,” said Rickford in late November of 2020 shortly after Governor Whitmer called for Line 5 to be shutdown due to “environmental” concerns.

Same Old Tune, Different Pipeline

Global Top 10 ESG Leader Among World's Top 10 Oil Exporters v3-01

Pipeline detractors say that Line 5 poses a considerable risk to the Great Lakes despite its safe operation without incident at the Straits of Mackinac for more than 65 years. These opponents are singing the same old tune about yet another pipeline that sources and transports oil from Western Canada, as they did for Keystone XL and currently are for Line 3 and the Trans Mountain Expansion.

But what’s really astounding is when you stop and ask yourself how we got here in the first place? How is it that those living in Michigan, Ontario and Quebec who rely on Line 5 for propane to heat their homes or the gas to fuel their vehicles – anti-pipeline activists included – not out protesting on the streets to keep this pipeline in operation? Do some of these people think they are already living fossil-fuel-free lives?

This conundrum is reminiscent of a story in early March about the clothing company North Face rejecting an order of 400 jackets from a Texas oil and gas company because it “…didn’t want to be associated with an industry that doesn’t meet its brand standards.” So, to have some fun, the Colorado Oil and Gas Association bestowed its first-ever “Extraordinary Customer Award” on The North Face as a show of appreciation for the sheer volume of oil and gas it buys and uses.

Ironically, almost every product made by The North Face uses nylon, polyester and polyurethane, all derived from petroleum. Its rain resistant, weather tempered products would all be non-existent without oil, and perhaps so would the company all together.

It is such a strange idea and also quite a problem that so many people aren’t aware of the critical role oil and natural gas play in our lives each and every day. The North Face is a great example of how many people seemingly aren’t aware of this reality, or turn a blind eye to it all together. We need to have more balanced and educational discussions about oil and gas and how we will need it for decades to come – if not forever.

Shutting Down Line 5 Doesn’t Make Sense

Since Keystone XL was first delayed, global demand for oil has grown by 10 million barrels per day

Canada was the second largest trading partner with the United States in the world as of 2018. Much of what we trade with our southern partner are natural resources. Given this important relationship, it's critical the U.S. understands that sourcing crude oil, natural gas, agricultural products, forestry products, minerals and metals and other goods from sustainable producers in Canada is much better for the global environment than getting these raw materials from most producers elsewhere in the world. That's because Canada is a leader on climate action and has been for many years.

According to the IEA World Energy Outlook 2020’s Stated Policies Scenario, the world is expected to return to pre-pandemic levels of oil consumption by 2022-23, with continued growth in demand for years and years afterwards. Hence, as long as the world needs oil - as it will for many decades into the future - Canada should be a global supplier of choice because of our world-class transparency, regulatory and environmental standards.

Not one single barrel of oil has been kept in the ground by protesting and stopping pipelines that source oil from Canada. For example, since the Keystone XL project was first proposed before getting axed by President Joe Biden back in January, global oil demand grew by more than 10 million barrels per day. The U.S. had an opportunity to source more heavy oil from responsible producers in Canada for over a decade via Keystone XL, but in the end chose less responsible and environmentally friendly producers instead.

Shutting down the Line 5 pipeline that carries responsibly produced oil from Western Canada to refineries in the U.S. and eastern provinces would be harmful to people on both sides of the border and to the global environment by increasing emissions associated with rail and tanker transport for new oil supply. Given the results of a Line 5 closure, it just doesn’t make sense to do so in any way, shape or form.

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