Experts are painting a grim picture of what Canada could face if the Line 5 pipeline gets shut down, with some saying the country could see its fuel capacity get cut in half.
The pipeline, which serves as a vital artery for North America’s energy infrastructure, is facing a looming shutdown threat from Michigan Gov. Gretchen Whitmer, who set a Wednesday deadline last November that owner Enbridge has said it has no plans to meet.
If the line does get shut down — either before or after a court-appointed mediator is set to meet with the two sides again on May 18 — petroleum analysts say it would cause “a significant, violent reaction economically” across Canada.
“Consumers would have no fuel, and by no fuel I mean 66 per cent of Quebec’s oil would be cut off, 50 (per cent) for Ontario,” said Dan McTeague, president of Canadians for Affordable Energy.
“You’re looking at a real scenario where most of the jet fuel use for Ottawa, Toronto, Detroit international airports would definitely be offline. … The damage to the western Canadian economy would also be significant. Right across the board, a bad situation.”
Whatever fuel remains in Canada would likely see a dramatic markup, McTeague adds.
“Eastern Canada would be looking at a 20 to 50 cent per litre increase — if you could find it,” he said.
McTeague says fuel shortages would also impact the ability for trucks or trains to pick up the slack left behind by the pipeline, which carries roughly 540,000 barrels of crude oil daily between Wisconsin and Ontario.
Enbridge has said less than 10 per cent of that shortfall could be replaced by rail transportation, leaving the rest of that fuel supply in limbo.
Werner Antweiler, an associate professor at the University of British Columbia’s Sauder School of Business, says he hasn’t been able to fact-check that figure. Yet he said in an email to Global News that a shutdown would see the greatest impact in jobs and gas prices for Canadians.
“The reduction in environmental risk from an immediate shutdown does not appear to be justified in light of the significant economic costs imposed by the shutdown,” he wrote.
The federal government on Tuesday painted a similar picture in an amicus brief filed in U.S. federal court, arguing that shutting down the pipeline would deal a “massive and potentially permanent” blow to Canada’s economy and energy security and risk lasting damage to relations with the United States.
“A hastily and unduly imposed shutdown would undermine the confidence in reciprocal, enforceable commitments and cross-border co-operation that lies at the heart of the United States-Canada relationship,” the brief reads.
The dispute first erupted in November when Whitmer — citing the risk of an environmental catastrophe in the Straits of Mackinac, the waterway where Line 5 traverses the Great Lakes — revoked the easement that had allowed the line to operate since 1953.
Enbridge insists the pipeline is safe, and has already received the state’s approval for a $500-million effort to dig a tunnel beneath the straits that would house the line’s twin pipes and protect them from anchor strikes.
The company said on Monday that it will not stop operating the pipeline “unless we are ordered by a court or our regulator to do so, which we view as highly unlikely.”
James Coleman, an associate professor in energy law at Southern Methodist University’s Dedman School of Law in Dallas, agrees with Enbridge’s statement, citing the risk of a “major disruption” that could serve Canada well in court.
He also suggested U.S. President Joe Biden could intervene in the dispute to protect the interests of both countries, and that Whitmer herself may be feeling pressure to walk back her decision.
“The impacts would be severe,” he said. “There’s certainly a chance that solutions could be found to fill the gap, and markets will eventually adjust. But the reality is, this is serious and I think even the governor could realize that this is politically risky.
“Canada has a strong argument here, but there remains a lot of uncertainty as to whether a judge will see it the same way.”
Biden has stressed the need for the U.S. to move away from fossil fuels and ordered a halt to the Keystone XL pipeline on his first day in office.
Natural Resources Minister Seamus O’Regan pointed out in a statement Tuesday that Line 5 delivers more than half the propane and home heating oil consumed in Michigan, and is a vital source of energy for Ohio and Pennsylvania as well, to say nothing of Ontario and Quebec.
That’s why even some environmentalists aren’t exactly cheering for an immediate shutdown, despite Green Party Leader Annamie Paul and a number of Indigenous groups in Ontario calling for it.
Sven Biggs, the oil and gas programs director for Stand.earth Canada, says the crisis Canada finds itself in is proof the government should have begun the transition to clean energy “decades ago,” and that the shift should begin in earnest soon.
Yet he also recognizes that Canada won’t be able to make that transition overnight.
“We don’t have to deal with this crisis as a crisis,” he said. “Instead we can deal with it as a permanent change in the way we move oil around the globe.
“We know that we have to reduce our reliance on fossil fuels. And the sooner we start planning for that future, the more we can avoid these kinds of decisions.”
Biggs says Enbridge should have addressed environmental concerns about the pipeline much earlier, and said it would be in everyone’s best interests for the company to proceed with the planned tunnel project and other safety improvements.
McTeague, however, predicts a shutdown and resulting fuel and economic crisis would see a majority of Canadians turn their back on environmental concerns once they “are not only locked down but unable to eat, unable to get groceries.”
He also says the Liberal government created the crisis by not supporting additional pipelines that would have eased the burden on Line 5.
“The government said it themselves in their amicus brief, that we are a country that is still reliant on these fuels and this industry,” he said.
“We can’t, you know, toy around with the indispensable cornerstone position that fossil fuels have in our society. Like it or not, they’re what we have for now.”
— With files from the Canadian Press
© 2021 Global News, a division of Corus Entertainment Inc.
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