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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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Economy

GOP directs culture war fury toward green investing trend

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By Sam Metz in Salt Lake City

SALT LAKE CITY (AP) — Republicans are coming out swinging against Wall Street’s growing efforts to consider factors like long-term environmental risk in investment decisions, the latest indication that the GOP is willing to damage its relationship with big business to score culture war points.

Many are targeting a concept known as ESG — which stands for environmental, social and governance — a sustainable investment trend sweeping the financial world. Red state officials deride it as politically correct and woke and are trying to stop investors who contract with states from adopting it on any level.

For right-wing activists who previously brought criticisms of critical race theory (CRT), diversity, equity and inclusion (DEI) and social emotional learning (SEL) to the forefront, it’s the latest acronym-based source of outrage to find a home at rallies, in conservative media and in legislatures.

ESG has yet to take hold as mainstream political messaging, but backlash against it is gaining steam. Last week, former Vice President Mike Pence attacked the concept during a speech in Houston. And on Wednesday, the same day he said on Twitter he planned to vote Republican, Elon Musk attacked it after Tesla lost its place on the S&P 500′s ESG Index. He called it a scam “weaponized by phony social justice warriors.”

The concept calls on investors to consider criteria such as environmental risk, pay equity or how transparent companies are in their accounting practices. Aided by recently proposed disclosure requirements and analysis from ratings agencies, they have adopted the principles to such an extent that those who use them control $16.6 trillion in investments held in the U.S.

In response, Republicans — historically known for supporting fewer regulations — are in many places attempting to impose new rules on investors. Their efforts reflect how members of the party are willing to distance themselves from big business to push back against those they see as ideological foes.

“I don’t think we’re the party of big business anymore. We’re the party of people — more specifically, we’re the party of working people. And the problem that we have is with big banks and corporations right now trying to dictate how we’re going to live our lives,” West Virginia Treasurer Riley Moore said.

Opponents criticize ESG as politicized and a potentially costly diversion from purely financial investment principles, while advocates say considering the criteria more accurately accounts for risk and promises steadier returns.

“We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” Larry Fink, CEO of investment firm BlackRock and a leading proponent, told clients in a letter this year.

But Moore and others including Utah’s Republican state treasurer Marlo Oaks argue favoring green investment over fossil fuels denies key industries access to the financial system and capital. They have targeted S&P Global Ratings for appending ESG scores to their traditional state credit ratings. They worry that without changes, their scores could make borrowing for projects like schools or roads costlier.

In an April letter, Oaks demanded S&P retract analysis that rated Utah as “moderately negative” in terms of environmental risk due to “long-term challenges regarding water supply, which could remain a constraint for its economy … given pervasive drought conditions in the western U.S.”

The letter was co-signed by the governor, legislative leaders and the state’s congressional delegation, including Sen. Mitt Romney, whose former firm Bain Capital calls ESG factors “strategic, fact-based and diligence-driven.” It said ratings system “attempts to legitimize a dubious and unproven exercise” and attacks the “unreliability and inherently political nature of ESG factors in investment decisions.”

Though he likened ESG to critical race theory, Oaks said he was mostly concerned with capital markets and what he called attempts by fossil fuel opponents to manipulate them by pressuring investors to pick businesses with high ESG scores.

“DEI, CRT, SEL. It can be hard to keep up with the acronyms,” he wrote on an economics blog last month, “but there’s a relatively new one you need to know: ESG.”

Investors making carbon neutral or net zero criteria common were, in effect, Oaks said, limiting access to capital for oil and gas businesses, hurting their returns and potentially contributing to gas price spikes.

In more than a dozen red states, officials dispute the idea that the energy transition underway could make fossil fuel-related investments riskier in the long term. They argue employing asset managers with a preference for green investments uses state funds to further agendas out of sync with constituents.

In statehouses, anti-green investing efforts are backed by conservative groups such as the American Legislative Exchange Council and the Heartland Institute, a think-tank skeptical of scientific consensus on human-caused climate change that has backed bills that either divest state funds from financial institutions that use ESG or forbid them from using it to score businesses or individuals.

In Texas, West Virginia and Kentucky, lawmakers have passed bills requiring state funds limit transactions with companies that shun fossil fuels. Wyoming considered banning “social credit scores” that evaluate businesses using criteria that differ from accounting and other financial metrics, like ESG

After conservative talk show host Glenn Beck visited the Idaho Statehouse and referred to ESG as critical race theory “on steroids,” the Legislature passed a law in March prohibiting investment of state funds in companies that prioritize commitments to ESG over returns.

The American Legislative Exchange Council recently published model policy that would subject banks managing state pensions to new regulations limiting investments driven by what it calls “social, political and ideological” goals.

Though the policy doesn’t mention it outright, Jonathan Williams, the group’s chief economist, said ESG’s mainstreaming amid broader trends of political correctness was a driving force. He said his research shows that incorporating factors beyond traditional financial metrics can lower the rate of return for already underfunded state pensions.

Sustainable investing advocates deny that charge and say considering the risks and realities of climate change amounts to responsible investing.

West Virginia and Arkansas recently divested their pension funds from BlackRock in response to the asset manager adding businesses with smaller carbon footprints to its portfolios. Moore, West Virginia’s treasurer, hopes more will follow.

Though it’s drawing enthusiasm, the green investment discourse differs from recurring debates over gender and sexuality or how history is taught. Both proponents and detractors acknowledged they’re surprised pensions, credit ratings and investment decisions have become campaign rally fodder.

Last month at the Utah state party’s convention, thousands of Republicans roared when Sen. Mike Lee described green investment in similar terms to critical race theory — another acronym-based foil: “Between CRT and ESG and MSNBC, we get way too much B.S.,” Lee said.

Bryan McGannon, a lobbyist with US SIF: The Forum for Sustainable and Responsible Investment, said opponents were wrong in framing sustainable investing trends as political. If states refuse to reckon with how the future will likely rely less on fossil fuels and limit how environmental risk can be considered, he said, they’re making decisions with incomplete information.

“If a state’s not considering those risks, it may be a signal to an investor that this might not be a wise government to be putting our money with,” McGannon said. “Investors use a huge swath of information, and ESG is a piece of that mosaic.”

___

Associated Press writers Stan Choe in New York and Lindsay Whitehurst in Salt Lake City contributed to this report.

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Energy

The Real Reason for Record Gas Prices

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Who’s to blame for record high gas prices which in turn have made EVERYTHING more expensive?

Politicians are using the playbook of environmental activists who want desperately to slow everything down, every business, and every single person (who can’t afford endless price hikes).

Here’s Emmy Award winning journalist John Stossel.

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From StosselTV

Putin! Price gouging! Excess profit! Politicians blame the wrong things for record gas prices.  Politicians say higher prices are caused by “corporate greed.” Nonsense. Greed is a constant. Companies are always greedy. They were just as greedy when prices dropped. “If big oil could raise prices anytime they wanted … then why were they so cheap in 2020?” asks Ben Lieberman of the Competitive Enterprise Institute. He points out that the record price “all comes down to cutting back on supplies.” Exactly. Prices change because of supply and demand. Politicians, pushed by environmental activists, have restricted oil production.

 

——– Don’t miss a single video from Stossel TV. Sign up here: https://www.johnstossel.com/#subscribe ——–

John Stossel

Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people. Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20. Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year. Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

 

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