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Enbridge says still willing to talk on Line 5, despite Michigan’s frustration

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WASHINGTON — The Canadian architect of the controversial Line 5 cross-border pipeline expansion project said Friday it remains committed to a negotiated solution to its impasse with the state of Michigan, even though the government has effectively walked away from the table.

Both sides are obliged by court order to engage in a good-faith effort to resolve the dispute, and Enbridge Inc. “remains ready to do just that,” the Calgary-based pipeline giant said in a statement.

“Our goal from the beginning has been to work co-operatively to reconcile interests, resolve disputes and move forward in the best interest of people throughout the region,” the company said.

“We believe in the process and participated in mediation in good faith. We are committed to continuing to seek resolution, whether through mediation or by asserting our rights in the courts if necessary.”

Line 5 ferries upwards of 540,000 barrels per day of crude oil and natural gas liquids across the Canada-U.S. border and the Great Lakes by way of a twin line that runs along the lake bed beneath the ecologically sensitive Straits of Mackinac, which connect Lake Michigan and Lake Huron.

Proponents call it a vital and indispensible source of energy — particularly propane — for several midwestern states, including Michigan, Ohio and Pennsylvania, and a key source of feedstock for critical refineries on the northern side of the border, including those that supply jet fuel to some of Canada’s busiest airports.

Critics, however, among them Michigan Gov. Gretchen Whitmer, want the line shut down, arguing it’s only a matter of time before an anchor strike or technical failure triggers a catastrophic environmental disaster in one of the area’s most important watersheds.

That’s why last November, Whitmer abruptly revoked the easement that had allowed the pipeline to operate since 1953, giving the company until May to voluntarily cease operations and triggering a court case that has only dragged on since then.

Enbridge has insisted from the outset that it has no plans to voluntarily shut down the pipeline.

“We understand the stakes in this matter are important not only for Enbridge and the state, but for many others on both sides of the U.S.-Canada border who have a strong interest in its outcome,” the company said.

“Meanwhile, we will continue to safely and responsibly deliver the energy the region relies upon from the Line 5 system.”

A court-sanctioned voluntary mediation process, which began in April, has failed to yield any agreement and appears to have fallen apart, although the official status of those talks is difficult to divine.

Following the last meeting Sept. 9, Michigan’s emissaries “unambiguously communicated to the mediator that any further continuation of the mediation process would be unproductive for them, and they have no ‘desire to continue with the mediation process,'” court documents show.

Michigan District Court Judge Janet Neff, however, appears reluctant to call a halt to the process.

“Voluntary facilitative mediation necessarily requires voluntary participation by both parties,” Neff said in a decision last week that dismissed as moot one of the state’s motions aimed at short-circuiting the talks.

The process, Neff wrote, “is at least at a standstill, although the parties remain under a continuing obligation to engage in good faith to resolve this case.”

Where that leaves matters is unclear. The attorney general’s office in Michigan refused to comment Friday, referring media inquiries back to the court documents.

Enbridge has also pointed to a possible “diplomatic solution” under a 1977 U.S.-Canada treaty covering cross-border pipelines, which the Canadian government has argued applies in this case and obliges the court to step aside in favour of a negotiated bilateral settlement.

Environmental groups, meanwhile, have been unequivocal in their opposition to the pipeline and a potential replacement project.

Cathy Collentine, associate director of the Sierra Club’s “Beyond Dirty Fuels” campaign, said the U.S. Army Corps of Engineers is in the process of an environmental impact assessment on the Line 5 project. It would then be up to the White House to decide whether to take action based on the findings, she said.

If President Joe Biden’s administration is serious about confronting climate change, the most contentious cross-border pipeline projects of the last 15 years — Keystone XL, Line 5 and also Line 3, another Enbridge upgrade, this one in Minnesota — are the ones they should be blocking, Collentine said.

Such projects, with their capacity to increase fossil fuel production and consumption, are already affecting communities on the front lines of climate change, she said.

“Those are the exact projects that we have long said we cannot continue to build, we cannot continue to approve,” Collentine said.

“It’s a moment where the Biden administration, through these analyses, we believe should and hopefully will see that that is also true and not allow these projects to move forward or to continue operating.”

This report by The Canadian Press was first published Oct. 1, 2021.

James McCarten, The Canadian Press

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Energy

Biden administration holding its first onshore oil sales

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BILLINGS, Mont. (AP) — The U.S. government this week is holding its first onshore oil and natural gas drilling lease auctions since President Joe Biden took office after a federal court blocked the administration’s attempt to suspend such sales because of climate change worries.

The online auctions start Wednesday and conclude Thursday. About 200 square miles (518 square kilometers) of federal lands were offered for lease in eight western states. Most of the parcels are in Wyoming.

The sales come as federal officials try to balance efforts to fight climate change against pressure to bring down high gas prices.

Republicans want Biden to expand U.S. crude production. He faces calls from within his own party to do more to curb fossil fuel emissions that are heating the planet.

Oil production increased in the U.S. in recent months, but it’s still well below pre-pandemic levels. Companies have been hesitant to expand too quickly because of uncertainty over how long high prices will continue.

A coalition of 10 environmental groups said in a lawsuit filed before the sales even began that they were illegal because officials acknowledged the climate change impacts but proceeded anyway.

An immediate ruling was not expected. Interior Department spokesperson Melissa Schwartz said the agency did not have comment on the litigation.

Beginning with this week’s sales the royalty rate for oil produced from new federal leases is increasing to 18.75% from 12.5%. That’s a 50% jump and marks the first increase since the 1920s.

Parcels also are being offered in Colorado, Utah, New Mexico, Montana, Nevada, North Dakota and Oklahoma.

Hundreds of parcels of public land that companies nominated for leasing had been previously dropped by the administration because of concerns over wildlife being harmed by drilling rigs. More parcels covering about 19 square miles (49 square kilometers) were dropped at the last minute in Wyoming because of potential impacts on wilderness, officials said.

But attorney Melissa Hornbein with the Western Environmental Law Center said the reductions in the size of the sales were not enough.

“They are hoping that by choosing to hold sales on a smaller amount of acreage they are threading the needle. But from our perspective, the climate science is the one thing that doesn’t lie,” Hornbein said.

Oil industry representative Kathleen Sgamma said the environmentalists’ lawsuit ignores the fact that lease sales from U.S. lands are required under federal law.

“Public lands are managed in a balanced manner. Balance is a word these groups don’t understand,” said Sgamma, president of the Denver-based Western Energy Alliance, which represents oil and gas companies.

Fossil fuels extracted from public lands account for about 20% of energy-related U.S. greenhouse gas emissions, making them a prime target for climate activists who want to shut down leasing.

Biden suspended new leasing just a week after taking office in January 2021. A federal judge in Louisiana ordered the sales to resume, saying Interior officials had offered no “rational explanation” for canceling them and only Congress could do so.

The government held an offshore lease auction in the Gulf of Mexico in November, although a court later blocked that salebefore the leases were issued.

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Follow Matthew Brown on Twitter: @matthewbrownAP

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Energy

Czech Republic to extend coal mining amid high demand

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PRAGUE (AP) — The Czech Republic has decided to reverse plans to halt mining in a key black coal region to help the country safeguard its power supply amid high demand and the energy crunch prompted by the Russia’s war in Ukraine.

Finance Minister Zbynek Stanjura said Thursday that the state-owned OKD company will extend its mining activities in north-eastern Czech Republic until at least the end of next year, with an analysis to be made on a possible further extension until 2025.

The original plans called for mining to be halted there this year, but “demand for black coal is enormous,” Stanjura said.

Some other European Union countries are turning back to coal as a replacement for reduced deliveries of Russian natural gas, threatening climate goals in Europe. Russia has trimmed gas flows to EU countries like Germany, Italy and Austria on top of its gas cutoffs to France, Poland, Bulgaria and others.

OKD’s chief executive, Roman Sikora, said the Czech company was planning to mine 1.3 million metric tons of black coal in 2023.

It will be mostly used for generating power and household heating. Coal-fired power plants generate almost 50% of total Czech electricity output.

The decision came after the European Union agreed to ban Russian coal starting in August over the war in Ukraine and as it works to reduce the bloc’s energy ties to Russia.

The Czech government aims to phase out coal in energy production by 2033 while increasing the country’s reliance on nuclear power.

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