Environment & Energy Report

Section of Enbridge Line 5 Allowed to Restart in Michigan (3)

July 1, 2020, 7:03 PM; Updated: July 1, 2020, 9:36 PM

Enbridge Inc. can partially restart its dual oil and gas pipeline below Lakes Michigan and Huron, even though one leg of the line remains closed due to damage, a state court ruled Wednesday.

The Canadian energy titan convinced Ingham County Circuit Court Judge James Jamo to deny a preliminary injunction to Michigan Attorney General Dana Nessel. The judge issued an amended temporary restraining order requiring Enbridge to provide information to the state’s attorneys and keep the eastern leg of the pipeline closed.

Federal regulators gave Enbridge the green light to reopen the western leg of the pipeline, which the company said it plans to start doing immediately. Jamo concluded the risk of rupture in Line 5’s undamaged western section was remote enough that the company should be allowed to operate that portion while investigating damage in the line’s eastern leg.

The order saves Enbridge roughly $1.76 million per day, which it says it lost while the line was shut down. Jamo seemed to accept arguments from Enbridge’s attorneys that the pipeline’s west leg must be restarted in order to perform an in-pipeline assessment of the damage discovered on June 18.

Jamo said the company’s duty of “due care” required it to restart the western leg so an “in-line-investigation” of the pipeline could be completed and technical data could be shared with state and federal regulators.

Fear or Facts

Enbridge will begin restarting the west segment and anticipates “operations will soon return to normal,” company spokesman Ryan Duffy said in an email.

Enbridge doesn’t know what caused the damage to the underwater pipe, but the firm’s initial findings indicate a boat may have dragged a fishing line across the western pipe, and a boat’s anchor may have struck a support for the eastern pipe.

The court ordered the eastern leg to remain closed until the Pipeline Hazardous Materials Safety Administration investigates the damage and Enbridge completes all repairs the federal regulator recommends.

Jamo on Wednesday also ordered Enbridge to provide Nessel (D) with all of the information it was giving to federal regulators.

“Today’s court decision allows the state to receive the vital information surrounding this incident that we need to complete an informed analysis of the damage and evaluate the threat this pipeline poses to our environment if left to operate in its current state,” Nessel said in a statement.

Information Sharing

At a hearing on the case Tuesday, Assistant Attorney General Robert Reichel argued the court should consider the risk to other businesses, not just Enbridge, when deciding whether to keep pipeline shut down.

“There is a serious risk of harm, not only to natural resources but to many communities,” he said. “That endangers or potentially endangers the livelihoods of many businesses as well as the natural resources.”

But Enbridge disagreed during the hearing.

“The attorney general’s case is based on fear, and not facts, and the fear is not justified here,” Enbridge attorney David Coburn, a partner Steptoe & Johnson LLP, said.

“Despite fearmongering we hear from the attorney general these are not high-impact or high-risk events. These pipelines have operated for over 60 years without one drop of oil spilling. That is something to take into account.”

Second Loss for AG

The ruling is another blow for Nessel in her multipronged legal battle with Enbridge, which wants to replace the four-mile section of Line 5 with a tunneled line under the lake bed.

Last week, Jamo issued a temporary restraining order blocking the line’s operation due to the damage. But the Wednesday ruling undid that order, without making a finding on whether Nessel was likely to prevail in her overall legal challenge to the line’s operation.

The company has had the better of Nessel in another suit on that project. The Michigan Court of Claims and Michigan Court of Appeals rejected the first-term Democrat’s argument that the bill creating the commission that approved the tunnel deal was passed in an unconstitutional manner.

She’s filed appeals of those decisions at the Michigan Supreme Court.

The 645-mile dual line transports up to 540,000 barrels per day of light crude oil, light synthetic crude, and natural gas liquids, leading the Ohio Attorney General and American Petroleum Institute to file friend of the court briefs supporting Enbridge in the case.

The case is Nessel v. Enbridge Energy Ltd. P’ship, Mich. Cir. Ct., No. 19-474-CE, preliminary injunction denied 7/1/20.

(Adds comments from AG Nessel, Enbridge.)

To contact the reporter on this story: Alex Ebert in Columbus, Ohio at aebert@bloomberglaw.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Rebecca Baker at rbaker@bloombergindustry.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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