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Enbridge punches back on Line 5 challenge: ‘Nothing but counter-factual speculation’

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This photo taken in October 2016 shows an aboveground section of Enbridge’s Line 5 at the Mackinaw City, Mich., pump station. The Bad River Band of the Lake Superior Chippewa wants a federal judge in Wisconsin to order the pipeline closed, fearing a rupture on its territory due to spring flooding. THE CANADIAN PRESS/AP-John Flesher

By James McCarten in Washington

Michigan joined the Line 5 legal fray unfolding just across state lines Wednesday as lawyers for Enbridge Inc. and an Indigenous band prepared to square off over whether the controversial cross-border pipeline should be shut down.

The stage is set for oral arguments Thursday in the Wisconsin capital of Madison as a federal judge contemplates whether to order the taps turned off and the pipeline’s contents purged to forestall a watershed-fouling rupture.

That hearing will now also include lawyers fighting a similar legal battle with Enbridge in Michigan, where Attorney General Dana Nessel has so far been thwarted in her three-year campaign to seal off Line 5 for good.

The Bad River Band of the Lake Superior Chippewa, through whose northern Wisconsin territory the line runs, has filed a motion arguing that spring flooding along the riverbanks has rendered the risk of a breach too great to ignore.

Nonsense, Enbridge argues back in an opposition brief that takes direct aim at the band’s claims of a looming environmental emergency, as well as the “drastic remedy” its lawyers are requesting.

“Despite having to prove both liability and grounds for an injunction, the band has done neither. The motion must therefore be denied,” the brief reads, describing their argument as “alarmist” and “counterfactual speculation.”

“No release of oil is ‘ready to take place,’ ‘happening soon,’ or ‘real and immediate.'”

The 50-page filing includes among its exhibits an email exchange between Enbridge and the band’s natural resources officials to support its argument that the band has been unwilling to allow the company to do any remedial work.

“This court should contrast the evidence before it of Enbridge’s persistent efforts and overtures to reach a solution … with the band’s refusal to meaningfully engage or act.”

Even if the risk was high, shutting down the pipeline would not be the appropriate remedy, Enbridge says, pointing to a court-ordered contingency plan that spells out the steps it would take if the threat were indeed urgent.

“Enbridge will pre-emptively purge and shut down the line well in advance of any potential rupture,” the brief says, adding that the area remains under constant 24-hour video surveillance.

“Any flooding and erosion has not, and would not, catch Enbridge by surprise.”

Heavy flooding that began in early April washed away significant portions of the riverbank where Line 5 intersects the Bad River, a meandering, 120-kilometre course that feeds Lake Superior and a complex network of ecologically delicate wetlands.

The band has been in court with Enbridge since 2019 in an effort to compel the pipeline’s owner and operator to reroute Line 5 around its traditional territory — something the company has already agreed to do.

But the flooding has turned a theoretical risk into a very real one, the band argues, and it wants the pipeline closed off immediately to prevent catastrophe.

Line 5 meets the river just past a location the court has come to know as the “meander,” where the riverbed snakes back and forth multiple times, separated from itself only by several metres of forest and the pipeline itself.

At four locations, the river was less than 4.6 metres from the pipeline — just 3.4 metres in one particular spot — and the erosion has only continued.

Michigan, led by Nessel, has been arguing since 2019 that it’s only a matter of time before Line 5 leaks into the Straits of Mackinac, the ecologically delicate waterway where it crosses the Great Lakes.

“The alarming erosion at the Bad River meander poses an imminent threat of irreparable harm to Lake Superior which far outweighs the risk of impacts associated with a shutdown of the Line 5 pipeline,” she argues in her brief.

“Without judicial intervention, it is likely that this irreparable harm will be inflicted not only on the band, but also on Michigan, its residents, and its natural resources.”

The economic arguments against shutting down the pipeline — which carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont. — are by now well-known.

Its proponents, including the federal government, say a shutdown would cause major economic disruption across Alberta, Saskatchewan and the U.S. Midwest, where Line 5 provides feedstock to refineries in Michigan, Ohio and Pennsylvania.

It also supplies key refineries in Ontario and Quebec, and is vital to the production of jet fuel for major airports on both sides of the Canada-U.S. border, including Detroit Metropolitan and Pearson International in Toronto.

“The implications (of a shutdown) are significant — not only to Pearson airport, not only to the Detroit airport, but to our mutual economies,” Transport Minister Omar Alghabra said Wednesday on Parliament Hill.

Talks about possible contingency plans have been taking place, he added, though he hinted at something Enbridge and pipeline experts have been saying for years: there are no real alternatives.

“There’s been ongoing discussion,” Alghabra said. “But I can tell you that our focus is making sure that Line 5 continues operations.”

That was the idea behind a lengthy statement issued Tuesday by the Canadian Embassy, which warned of severe economic consequences as well as potential ramifications for bilateral relations were the line to close.

“The energy security of both Canada and the United States would be directly impacted by a Line 5 closure,” the statement said. Some 33,000 U.S. jobs and US$20 billion in economic activity would be at stake, it added.

“At a time of heightened concern over energy security and supply, including during the energy transition, maintaining and protecting existing infrastructure should be a top priority.”

Talks have been ongoing for months under the terms of a 1977 pipelines treaty between the two countries that effectively prohibits either country from unilaterally closing off the flow of hydrocarbons.

Nonetheless, the embassy’s statement and the Enbridge brief tacitly acknowledge that the prospect of a shutdown order is very real.

In Enbridge’s case, the brief pre-emptively asks the judge to grant a stay of 30 days, should an injunction be ordered, to give lawyers time to mount an appeal.

And if “this specific, temporary flood situation” results in a shutdown, the embassy says, Canada expects the U.S. to comply with the treaty, “including the expeditious restoration of normal pipeline operations.”

This report by The Canadian Press was first published May 17, 2023.

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Daily Caller

Shale Gas And Nuclear Set To Power The US Into The Future

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From the Daily Caller News Foundation

By David Blackmon

Shale natural gas played the lion’s share of the role in lowering U.S. emissions to levels not seen since the early 1990s by enabling power generation companies to displace coal-fired power plants with combined cycle gas plants. This led to a situation during the first Donald Trump presidency in which the U.S. was the only western country which had met its commitments under the Paris Climate Accords, even though President Trump had ended America’s participation in that compact.

While countries like Canada, the UK, Australia, and those in the European Union continue their obsession with intermittent power sources like wind and solar, the United States has been blessed with one powerful alternative for cutting emissions and is set to go full speed in pursuit of another in the coming days.

That first alternative is natural gas produced from the major U.S. shale plays. As the Statistical Review of World Energy reported last year, no energy source in world history has ever been scaled up as rapidly as the domestic US industry has achieved with shale gas.

Shale has grown faster than wind, faster than solar, and faster than even Indonesian coal. Faster than anything before it in recorded history. This rapid scaling, combined with the immensity of the recoverable resource itself has facilitated massive reductions in carbon emissions not just at home, but also abroad.

At home, shale natural gas played the lion’s share of the role in lowering U.S. emissions to levels not seen since the early 1990s by enabling power generation companies to displace coal-fired power plants with combined cycle gas plants. This led to a situation during the first Donald Trump presidency in which the U.S. was the only western country which had met its commitments under the Paris Climate Accords, even though President Trump had ended America’s participation in that compact.

Internationally, the rapid expansion of the U.S. liquefied natural gas export industry is now helping enable importing countries across the globe to meet their own commitments. The immensity of the American resource ensures such results can continue to be achieved for decades to come.

The second power source related to which America is poised for explosive growth is a long-existing one that has been woefully underutilized for decades now: Nuclear. The Deseret News reports that the White House is preparing a set of four executive orders for the President’s signature in the coming days designed to jump start American dominance in this crucial energy sector.

“We are trying to knock things over that we can that are regulatory,” Energy Secretary Chris Wright told the House Appropriations Committee in a May 7 hearing and reported by Energy Intelligence. “There will be catalyzing regulatory events to bring” in “tens of billions of dollars” in private capital, “mostly from hyperscalers.”

Respected energy analyst and writer Robert Bryce was able to obtain a draft of one of the orders this week. Writing in his Substack newsletter, Bryce says the draft order “begins by pointing out that the US is losing the race to deploy new reactors and that China has announced plans to: ‘Bring 200 new gigawatts of nuclear power online by 2035, at which point its total nuclear output will more than double that of the United States. Further, as American development of new reactor designs has waned, 87% of nuclear reactors installed worldwide since 2017 are based on Russian and Chinese designs. These trends cannot continue. Swift and decisive action is required to jump-start America’s nuclear renaissance and ensure our national and economic security by increasing fuel availability, enabling research and development, and preparing our workforce.”

Obviously, jump-starting a fairly moribund industry is a stretch goal for the Trump administration, especially considering that the Nuclear Regulatory Commission has permitted just 5 new nuclear plants since 1978, only two of which were ultimately built and placed into service. But the reality facing the U.S. and the rest of the international community is that, if getting to net zero by any year in the future is truly an imperative, there is little other choice but to focus on a rapid, massive nuclear expansion. Intermittent, weather-dependent generation simply cannot get that job done.

Fortunately, it’s a reality that Trump and key advisors like Sec. Wright fully grasp. In a keynote speech delivered in Poland last month, Wright said, “The two biggest ‘climate solutions’ in the coming decades are the same as they were in the last two decades, natural gas and nuclear, for the simple reason that they work.”

He isn’t wrong, and the Trump administration is focused on ensuring the U.S. maximizes the benefits from both of these key energy engines both at home and abroad.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

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Alberta

SERIOUS AND RECKLESS IMPLICATIONS: An Obscure Bill Could Present Material Challenge for Canada’s Oil and Gas Sector

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From Energy Now

By Tammy Nemeth and Ron Wallace

Bill S-243 seeks to “reshape the logic of capital markets” by mandating that all federally regulated financial institutions, banks, pension funds, insurance companies and federal financial Crown Corporations align their investment portfolios with Canada’s climate commitments

Senator Rosa Galvez’s recent op-ed in the National Observer champions the reintroduction of her Climate-Aligned Finance Act (Bill S-243) as a cornerstone for an “orderly transition” to achieving a low-carbon Canadian economy. With Prime Minister Mark Carney—a global figure in sustainable finance—at the helm, Senator Galvez believes Canada has a “golden opportunity” to lead on climate-aligned finance. However, a closer examination of Bill S-243 reveals a troubling agenda that potentially risks not only crippling Canada’s oil and gas sector and undermining economic stability, but one that could impose unhelpful, discriminatory measures. As Carney pledges to transform Canada’s economy, this legislation would also erode the principles of fairness in our economic and financial system.

Introduced in 2022, Bill S-243 seeks to “reshape the logic of capital markets” by mandating that all federally regulated financial institutions, banks, pension funds, insurance companies and federal financial Crown Corporations align their investment portfolios with Canada’s climate commitments, particularly with the Paris Agreement’s goal of limiting global warming to 1.5°C.  The Bill’s provisions are sweeping and punitive, targeting emissions-intensive sectors like oil and gas with what could only be described as an unprecedented regulatory overreach. It requires institutions to avoid financing “new fossil fuel supply infrastructure” and to plan for a “fossil-free future,” effectively discouraging investment in Canada’s energy sector. To that end, it imposes capital-risk weights of 1,250% on debt for new fossil fuel projects and 150% or more for existing ones, making such financing prohibitively expensive. These measures, as confirmed by the Canadian Bankers’ Association and the Office of the Superintendent of Financial Institutions in 2023 Senate testimony, would have the effect of forcing Canadian financial institutions to exit oil and gas financing altogether. It also enshrines into law that entities put climate commitments ahead of fiduciary duty:

“The persons for whom a duty is established under subsection (1) [alignment with climate commitments] must give precedence to that duty over all other duties and obligations of office, and, for that purpose, ensuring the entity is in alignment with climate commitments is deemed to be a superseding matter of public interest.”

While the applicability of the term used in the legislation that defines a “reporting entity” may be a subject of some debate, the legislation would nonetheless direct financial institutions to put “climate over people”.

 

There are significant implications here for the Canadian oil and gas sector. This backbone of the economy employs thousands and generates billions in revenue. Yet, under Bill S-243, financial institutions would effectively be directed to divest from those companies if not the entire sector. How can Canada become an “energy superpower” if its financial system is directed to effectively abandon the conventional energy sector?

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Beyond economics, Bill S-243 raises profound ethical concerns, particularly with its boardroom provisions. At least one board member of every federally regulated financial institution must have “climate expertise”; excluded from serving as a director would be anyone who has worked for, lobbied or held shares in a fossil fuel company unless their position in the fossil fuel company was to help it align with climate commitments defined in part as “planning for a fossil fuel–free future.” How is “climate expertise” defined? The proposed legislation says it “means a person with demonstrable experience in proposing or implementing climate actions” or, among other characteristics, any person “who has acute lived experience related to the physical or economic damages of climate change.” Bill S-243’s ideological exclusion of oil and gas-affiliated individuals from the boards of financial institutions would set a dangerous precedent that risks normalizing discrimination under the guise of environmental progress to diminish executive expertise, individual rights and the interests of shareholders.

Mark Carney’s leadership adds complexity to this debate. As the founder of the Glasgow Financial Alliance for Net Zero, Carney has long advocated for climate risk integration in finance, despite growing corporate withdrawal from the initiative. Indeed, when called to testify on Bill S-243 in May 2024, Carney praised Senator Galvez’s initiative and generally supported the bill stating: “Certain aspects of the proposed law are definitely achievable and actually essential.”  If Carney’s Liberal government embraces Bill S-243, or something similar, it would send a major negative signal to the Canadian energy sector, especially at a time of strained Federal-Provincial relations and as the Trump Administration pivots away from climate-related regulation.

Canada’s economy and energy future faces a pivotal moment.  Bill S-243 is punitive, discriminatory and economically reckless while threatening the economic resilience that the Prime Minister claims to champion. A more balanced strategy, one that supports innovation without effectively dismantling the financial underpinnings of a vital industry, is essential. What remains to be seen is will this federal government prioritize economic stability and regulatory fairness over ideological climate zeal?


Tammy Nemeth is a U.K.-based energy analyst. Ron Wallace is a Calgary-based energy analyst and former Permanent Member of the National Energy Board.

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