Enbridge Line 5 near St. Ignatius, Michigan, June 8, 2017. Dale G. Young / Associated Press
Consultant in the US energy industry, hired by Enbridge Inc. ENB-T estimates that shutting down the Line 5 pipeline would increase petrol prices for Ontario and Quebecers by one to two cents per liter.
Environmental Defense, a group seeking to shut down the Line 5 pipeline, a key energy channel for Central Canada, said in a statement Wednesday that the report by Neil Ernest, president of Muse, Stancil & Co., supports his claim that the closure impact on the line would be insignificant for consumers in Central Canada.
However, Enbridge said that Environmental Defense selectively cites the report, which the company said was prepared before Russia’s war against Ukraine led to rising energy prices.
Estimates of what it would cost Canadian consumers if Line 5 were shut down are at the heart of the debate over the efforts of the Michigan government and a group of Wisconsin locals to shut down the pipeline. The Canadian government has said that the continued operation of Line 5 is non-negotiable and that stopping its flow would be a threat to the country’s energy security.
Mr Ernest’s opinion was introduced earlier this year as evidence in a case that represents one of two continuing threats to the future of Line 5, which transports up to 540,000 barrels of oil a day – mostly from western Canada – through the Greater United States. lakes before re-entering Canada in Sarnia, Ont.
His report is part of the court record in the court battle stemming from a request from the Bad River Band of the Chippewa tribe on Lake Superior for a decision to evict the pipeline from its land.
The group, which filed an application earlier this year, is asking the U.S. federal court for a permanent order requiring Enbridge to “shut down the pipeline and safely decommission and decommission it.”
Michigan Governor Gretchen Whitmer is also trying to halt pipeline operations for fear of an oil spill in the Great Lakes. The issue is the subject of negotiations between Canada and the United States.
In the report, Mr Ernest said that “the projected impact of the shutdown of Line 5 on consumers of petrol, jet fuel and diesel in Ontario is an increase in prices of 5 cents per gallon”. His report of January 31, 2022 uses US dollars, and the estimate is an increase in price by more than one cent per liter in Canadian currency.
Michelle Woodhouse, manager of the Toronto-based Environmental Defense water program, said in a statement that the report was more evidence that the shutdown would not lead to a major spike in gas prices.
“International energy markets control oil prices, not every pipeline. And Anbridge knows that, “said Ms. Woodhouse.
Enbridge said there was much more in Mr Ernest’s report that highlighted how harmful stopping would be.
“Activists’ reports have selected selective parts of Neil Ernest’s analysis to give an inaccurate picture of the impact of line 5 shutdown,” Enbridge spokesman Jesse Semko said in a statement.
He noted that in the same report, Mr Ernest described the impact on the propane markets in Michigan and Ontario as “extreme” and the effects on all crude oil refineries as significant, leaving regional consumers facing volatile markets and enduring higher prices for petrol, aircraft, fuel and diesel. “
Mr Semko said it was a terrible time to talk about closing the pipeline.
“The impact of continued inflationary pressures and the turmoil of the war in Ukraine on global energy markets has made this a particularly difficult time to consider closing all pipelines, much less important to the US and Canadian economies as Line 5,” he said.
He noted that the closure of Line 5 would shift oil transport to rail and road and would place approximately 2,100 additional trucks on Michigan and Ontario roads, “creating congestion problems, safety concerns and higher emissions.” Approximately 800 railway wagons per day will be needed to move the product that line 5 carries, and this will also require the construction of additional railway lines.
Mr Ernest’s report said the shutdown of Line 5 would reduce Enbridge’s crude oil supplies by approximately 334,700 barrels a day. “The projected impact on crude oil supplies to refineries in Western Pennsylvania and Ontario will be serious” and will lead to a shortage of refined products such as gasoline, jet fuel, diesel and asphalt.
He said the total cost to consumers in Ontario of higher gasoline prices would be $ 300 million a year.
Mr Semko said Mr Ernest’s report was based on a scenario in which the replacement infrastructure had already been built and was in operation, including additional rail and barge infrastructure.
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