Enbridge Seeks Court Ruling on Enforceability of Line 5 Tunnel Agreements
June 06, 2019
Today Enbridge announced that it is filing a legal action with the Michigan Court of Claims to establish the constitutional validity and enforceability of previous agreements signed between the Company and the State of Michigan relating to the construction and operation of a tunnel underneath the Straits of Mackinac to house a replacement Line 5 pipeline.
Enbridge has been operating the Line 5 pipeline safely for 65 years. During that time, there have been no releases from the lines into the Straits. Additionally, the Straits pipelines are subject to the most extensive operating and risk management plan of any section of pipe in our system. Our program dramatically exceeds federal regulatory requirements; that’s because our goal has always been not just to meet, but exceed regulatory standards.
Despite this strong safety record, and in response to concerns raised by some within the State, Enbridge is prepared to improve safety even further by investing $500 million to construct and operate a concrete-walled tunnel 100 feet below the Straits, in which a new Line 5 would be housed by 2024. This would reduce the risk at the Straits to virtually zero.
Enbridge entered into a series of agreements in 2017 and 2018 with the State of Michigan to replace the current Line 5 with a new line located inside a tunnel and the State affirmed in those agreements Enbridge’s right to continue to operate the existing Line 5 until a replacement line has been completed. The new Administration has declared these agreements invalid and has offered no viable alternative because they have insisted that the Straits pipelines to be shut down within two years. This is a timeframe within which the tunnel cannot be completed.
“We are taking this action in order to protect Michigan consumers. We require a court review of the enforceability in order to remove obstacles to building the tunnel as quickly as possible and ensure energy security and environmental protection for Michigan,” said Guy Jarvis, Enbridge Executive Vice President, Liquids Pipelines.
Enbridge believes the tunnel can be under construction in 2021 and in service as soon as early 2024, assuming no further delays in the permitting process. Enbridge has further committed that operation of the existing Straits Line 5 crossing would cease immediately following the placement into service of the replacement pipeline in the tunnel. This plan would avoid significant adverse impacts to the State’s energy supply, including higher energy costs, supply shortages for propane and transportation fuels and constrained supplies for regional refineries which would result if the line was shut down sooner than the new tunnel being completed as the State has suggested.
Forward-looking information, or forward-looking statements, have been included in this news release to provide information about the Company and its subsidiaries and affiliates, including management’s assessment of Enbridge and its subsidiaries’ future plans and operations. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as ‘‘anticipate’’, ‘‘expect’’, ‘‘project’’, ‘‘estimate’’, ‘‘forecast’’, ‘‘plan’’, ‘‘intend’’, ‘‘target’’, ‘‘believe’’, “likely” and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information or statements included or incorporated by reference in this document include, but are not limited to, statements with respect to the proposed underground tunnel to house a replacement of the existing Line 5 pipeline (“Line 5”), including the benefits, risks, costs and timing thereof, the receipt of applicable permits and governmental, regulatory and other approvals, and related matters such as additional protective measures and other commitments.
Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for the Company’s services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company operates and may impact levels of demand for the Company’s services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty. The most relevant assumptions associated with forward-looking statements with respect to projects such as the replacement of Line 5, including estimated completion dates and expected capital expenditures, include the following: the impact of customer, government and regulatory approvals on construction and in-service schedules and cost recovery regimes; the availability and price of labour and construction materials; the effects of inflation and foreign exchange rates on labour and material costs; the effects of interest rates on borrowing costs; and the impact of weather.
Enbridge’s forward-looking statements are subject to risks and uncertainties, including, but not limited to those risks and uncertainties discussed in this news release and in the Company’s other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge’s future course of action depends on management’s assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company’s behalf, are expressly qualified in their entirety by these cautionary statements.
About Enbridge Inc.
Enbridge Inc. is North America's premier energy infrastructure company with strategic business platforms that include an extensive network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation. The Company safely delivers an average of 2.9 million barrels of crude oil each day through its Mainline and Express Pipeline; accounts for approximately 62% of U.S.-bound Canadian crude oil exports; and moves approximately 18% of all natural gas consumed in the U.S., serving key supply basins and demand markets. The Company's regulated utilities serve approximately 3.7 million retail customers in Ontario, Quebec, and New Brunswick. Enbridge also generates approximately 1,600 MW of net renewable energy power in North America and Europe. The Company’s common shares trade on the Toronto and New York stock exchanges under the symbol ENB.
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