Families learn hard economics lessons, importance of oil and gas to supply chain and consumer goods

Line 5 helps in the manufacture of 6,000 items

March 16, 2022

Many Michigan families are being squeezed.

Buying eggs, milk, toilet paper, shampoo, toothpaste or other staples isn’t easy these days as inflation hits 40-year highs.

Well beyond the noticeable high cost of gasoline resulting from oil supply constraints, consumers’ wallets are emptying quickly with each purchase throughout the entire supply chain.

That in large part is because approximately 60 percent of oil goes toward production of the gasoline, diesel and other fuels critical to transportation; the remaining 40 percent produces byproducts essential to the manufacture of thousands of items that affect daily life and on which millions rely.

From the tractors that help plow crops to the smartphones and laptops that connect people to the cars, trains, buses, trucks, bicycles, and shoes that keep people on the move to the medicines that treat diabetes, high blood pressure and allergies, increased costs are hitting consumers—hard, really hard.

“Petroleum is at the root of so many different products, from makeup to plastic bags to fertilizer,” said Patrick DeHaan, the head of petroleum analysis at GasBuddy.com, a Boston-based technology company that operates apps and websites based on finding real-time fuel prices across North America. “You can’t escape the use of oil.”

Along with the actual products, petroleum also is essential for big rigs hauling consumer goods, moving large containers, packaging, packing materials, and insulation that support their distribution—to get household goods to consumers.

Supermarkets and grocery stores not immune to rising oil prices

“The agricultural industry is in the higher-impact segment,” said Faisal Hersi, an energy analyst at Edward Jones. “Industrial fertilizer contains fossil fuels, so more expensive fertilizer means higher prices on grains. That has its own impact; plus, it also gets passed on to customers when they put meat, eggs or dairy products in their carts.”

While Michigan and four surrounding states are feeling the effects of inflation, consumers for more than 66 years at least have been able to rely on Enbridge Line 5 in the Straits of Mackinac. 

Keeping Line 5 operating makes sense

Line 5 transports light crude oil and the natural gas liquids—including propane, butane and ethane—essential to diesel and other fuels and heat for homes and businesses.  Its products also provide the energy and raw material necessary to manufacturing more than 6,000 items.

“What we see happening now underscores what energy security and independence really mean,” said Mike Moeller, Enbridge’s director of the Great Lakes Region. “Enbridge’s Line 5 safely transports 540,000 barrels per day of light crude oil, light synthetic crude and natural gas liquids and contributes to making the United States the largest oil producer in the world. Provided we have the right infrastructure in place, we can continue on the path to energy security and independence.”

It makes a lot of sense to continue to provide area residents and businesses a safe, reliable and affordable source of energy, and Moeller stressed the importance of Enbridge constructing the Great Lakes Tunnel to keep Line 5 operating.

Long-term solution is the Great Lakes Tunnel

A critical utility infrastructure modernization project, the Great Lakes Tunnel will encase in concrete a replacement section of Enbridge’s Line 5 deep below the lakebed in the Straits. It will remove the pipeline itself from the water, eliminate the chance of an anchor strike and virtually eliminate the chance of a release. The Tunnel also will accommodate other utilities, such as fiber optic cables for internet connectivity, while allowing enough space for Enbridge to maintain the Tunnel and Line 5.

“The increased prices have a direct impact on the entire supply chain—the raw materials and energy to manufacture and package products and the fuel to transport them,” said Moeller. “The situation underscores the essential role Line 5 has not only within Michigan, but the surrounding states in helping to blunt the rising costs.”

Nearly 70 percent of Michiganders supports construction of the Great Lakes Tunnel Project. To date, Enbridge has invested more than $100 million in preparing to construct the Great Lakes Tunnel Project and is soliciting bids for building the Tunnel. Once Enbridge receives all permits, it plans to start construction within the timeframe stated in the 2018 Tunnel Agreement with the State of Michigan.