Patrick Anderson, CEO of Anderson Economic Group, on Line 5.
“It is time for Michigan's business community to get serious about a threat to our economy, our tax base, and our quality of life. That threat emanates from the Line 5 pipeline, and in particular our current ignorance of both the economic risks of continuing operation of the pipeline, and the availability of alternatives.
Unfortunately, even after two years of hearings and two failed efforts to identify alternatives, we know very little about the risks we face — including the risks to major Michigan industries and the many people they employ.
As many Michigan residents know, the Line 5 pipeline operated under the Straits of Mackinac largely unnoticed for almost 60 years, until a major pipeline spill in the Kalamazoo River in 2010, and the work of the National Wildlife Federation in identifying aging oil pipelines as a threat to the Great Lakes in a report published in 2012. The state took action at that time, including creating a special task force. That group reported in 2015 that there was no comprehensive study of the relative risks of different modes of transporting oil. The governor reacted promptly, appointing an advisory board to address the risks.
Progress since then has been achingly slow. There have been multiple incidents involving lapses in safety involving the pipeline, although no spills. Enbridge, the pipeline's operator, agreed to fund two state-commissioned studies. One had to be canceled due to a conflict of interest. The other, with a company called Dynamic Risk, resulted in a draft report released in July. That document failed to include human error as a potential cause of accidents — an inexcusable error in a risk analysis. As the co-chair of the advisory board noted recently, it was human error that caused the Kalamazoo River spill.
Moreover, the same document provides no credible analysis of alternatives. The state's contractors dismissed one alternate route by noting the existence of rock formations in Canada. However, Enbridge pipelines already run from Manitoba to Montreal, and at least one pipeline is already operating along a potential alternative route in Canada.
The state-commissioned report also included an estimate of the economic risk of the Line 5 pipeline: $41,500 per year. That is not a misprint; the state's consultant wrote that our economic risk this year was equivalent to the cost of one well-optioned pickup truck.
The failure of the state-commissioned consultants is not just an embarrassment; it is also a warning.
We currently have no credible information on the risks to major industries. Let's start with the tourism industry. Think of the devastating impact of an oil spill on Northern Michigan tourism.
Now consider manufacturing and the transportation, logistics, services, and other industries that rely upon it. The state's largest refinery receives some portion of its supplies indirectly from Line 5. The gasoline and other fuels from this refinery are critical to workers and businesses in the state. A pipeline break in the Colonial Pipeline last year caused prices to increase by 20 cents a gallon. That was a short-term disruption; what happens if we permanently abandon the Straits crossing, as has been proposed by a petition now being circulated? Unfortunately, we do not know the answer.
A well-informed assessment would probably reveal that at least 18 out of largest 20 Detroit-area corporations, and many other major employers, would be affected by a “minor” spill that shut down the pipeline for several months.
It is time for a new approach. In particular, we need an approach that answers the following questions:
- How important is the Straits crossing of Line 5 to the Michigan economy? In particular, what would be the supply disruption to users such as the Marathon refinery in Detroit, and propane users in Northern Michigan?
- If the citizens of the state are unwilling to shoulder the risks of the Straits crossing, what are the alternatives, and who would pay for them?
- If the state was to force the closure of Line 5 by a change in law, how much would the taxpayers have to pay to compensate for taking their property?
- The current approach does not address these questions. It is time for the business community to start asking them.”