API’s chief economist says Line 5 is needed for affordable, reliable energy
API chief economist Dean Foreman: “Having the infrastructure and supply is key to reliability and affordability, especially through peak-winter periods.”
Line 5 is critical for this winter and beyond
Dec. 1, 2021
The projected energy prices are sobering.
The U.S. Energy Information Agency’s (EIA) Winter Fuels Outlook for the 2021-2022 season paints a potentially painful picture for energy consumers.
The EIA forecasts energy consumers will experience a:
- 54% increase in propane prices;
- 43% uptick in heating oil prices; and
- 30% hike for natural gas.
The EIA also expects 41% of U.S. households that heat primarily with electricity will spend six percent more than last winter, and U.S. households that heat primarily with propane will spend 54 percent more than last winter.
With those numbers in mind, and speaking on several Michigan radio shows this week, the chief economist for the American Petroleum Institute (API) reiterated the importance of energy infrastructure, such as Enbridge’s Line 5, in keeping energy prices in Michigan and the region stable and affordable.
“We have the highest prices now since 2014 for crude oil and many petroleum products, and since 2008 for natural gas, and propane relates to both,” said R. Dean Foreman, PhD, who's an expert in the economics and markets for oil, natural gas and power.
“The biggest change since pre-COVID really has been the trajectory of domestic production. Without an abundance of it and without the infrastructure critically throughout the region to provide it—plus decreased inventories and increased reliance on oil imports—that’s historically been a recipe for upward pressure on prices, and that’s where we are today.”
Foreman cited the week of Nov. 21 when, according to the EIA, U.S. petroleum demand was at 21.8 million barrels per day—3% above where it was at the same point in 2019, pre-COVID-19. This demonstrates the continued demand for gas, diesel, propane and other fuels essential to daily life.
Line 5 critical to meeting demand and affordability
“Having the infrastructure and supply is key to reliability and affordability, especially through peak-winter periods,” Foreman noted.
He also cited the significance of Line 5 to the U.S. energy platform.
“You have Line 5 and the resistance that Enbridge has overcome with that,” Foreman shared. “It’s a half-million barrels per day of supply that’s been reliable for more than 65 years and it’s absolutely critical to the region’s supply.”
That underscores why removing Line 5 in the Straits from service would compromise reliability, increase emissions and pose safety challenges related to putting thousands of extra trucks on the road each day in order to haul the amount of propane and light crude that Line 5 safely and reliably transports each day.
The Great Lakes Tunnel is the long-term solution
Enbridge maintains the current Line 5 is operating safely and reliably. A long-term solution for keeping energy flowing to the region while protecting the waters of the Great Lakes and the people who use them is the Great Lakes Tunnel Project.
Funded by Enbridge, the tunnel will encase a replacement section of Line 5 deep below the lakebed. It will eliminate the chance of an anchor strike to Line 5 and essentially eliminate the chance of a spill from Line 5 into the Straits. Enbridge is investing approximately $500 million to construct the Great Lakes Tunnel—another engineering marvel.
