Snyder’s Line-5 Agreement with Enbridge

Backroom Deals, Slippery Hands & Unconstitutional Agreements

Posted In: Politics, , State, News, ,   From Issue 871   By: Robert E Martin

27th November, 2018     0

Editor’s Note:

In early October a deal reached with Michigan Gov. Rick Snyder’s Administration and Canadian pipeline giant Enbridge was announced to replace twin 65-year old crude oil pipes that run under the Straits of Mackinac and have long been described as an environmental disaster waiting to happen.

Given the fast-paced evolution of events involved with Line Five in recent weeks, The Review received the following three important letters from respected and knowledgeable individuals close to the practical, environmental, legal, political, and financial implications of the Governor’s latest agreement with Enbridge: Judge Emeritus William Crane; Chairman of the Mackinac Island State Park Commission, Dennis Cawthorne; and Straits of Mackinac Alliance Chairwoman, Patty Peek.

Significant Flaws & Constitutional Legal Issues with Line 5 Agreement

Editor, Review Magazine;

There are several serious flaws and constitutional legal issues involved with the proposed plan advanced by the Snyder Administration for dealing with the Line Five pipelines.   The plan calls for decommissioning the pipes after installing a new line in a tunnel to be drilled through bedrock some 100 feet beneath the Straits - a more than 4-mile-wide waterway where Lakes Huron & Michigan converge.  This massive engineering project is expected to take 7-10 years to complete at a cost of $350 to $500 million, which Enbridge would pay.

In the meantime, about 23-million gallons of oil and natural gas liquids would continue moving daily through the twin lines at the bottom of the straits, which are part of route that extends 645 miles from Superior, Wisconsin to Sarnia, Ontario, crossing large areas of northern Michigan.

While a tunnel long-term sounds good, this is true only if these conditions are met:

  1. The user pays and is liable for damages per Michigan’s 1953 Easement Agreement.
  2. The existing pipeline as it exists today is reviewed within three months by an independent structural, civil, or metallurgical engineer and is determined to be "safe".
  3. The location of the tunnel is determined within 3 months and any condemnation required is determined to meet the legal tests for condemnation for "necessity for a public purpose" by the Michigan Attorney General.
  4. Proximity of the tunnel and its construction impact on the existing pipeline and nearby houses is determined not to jeopardize their safety by an independent structural, civil, or metallurgical engineer.

Unless these conditions are met, the existing pipeline use should be terminated for use for oil.

Additionally, Governor Snyder’s recommended solution with Enbridge is flawed and one-sided and is a betrayal of the public trust doctrine. It should NOT be implemented.

The pivotal question is whether the present pipeline is safe as required by The Submerged Lands Act of 1955.  A permit is needed to "construct, enlarge, extend, remove, fill, dredge, or place a structure on the bottom land. This includes having an environmental assessment -  meaning a review by A STRUCTURAL, CIVIL, AND OR A METALLURGICAL ENGINEER. As built in 1953, the pipeline was supported 100% by lying on the bottom and passed review by the engineer.

Today over half of this pipeline is no longer on the bottom, as the strong currents have eroded the soil away. Enbridge has constructed supports, which are simply rods screwed into the lake bottom with collars around the pipe to hold the pipe up. The DEQ permits have allowed this without a study by a structural, civil, or a metallurgical engineer to see if it is safe. Thus, the permits are in violation of the Submerged Lands Act of 1955.

Assuming the rods supporting the pipeline are 75-feet apart, 2.8 miles out of a total 4.2 miles of pipeline IS above the lake bottom. Thus, that portion off the bottom is fully exposed to at times 5 miles per hour current and obviously open to anchors wrapping around the pipe.

This causes a high likelihood of rupture spilling up to 2,500,000 gallons to spill into the Straits thus causing catastrophic irreparable damages. Vibrations excited by turbulent currents are much more likely in a rod-supported structure because it is off the bottom. Any changes to the stress state of the pipeline caused by Enbridge's distressing operation during support placement are material to the understanding of the current condition of the pipeline.

The DEQ in granting permits without following the statute HAS TRANSFORMED Line #5 under the Straits from a continuously supported structure into a rod supported pipe off the bottom without a complete analysis of the stability of the new structure, which is entirely irresponsible. There is a large body of engineering literature that documents how the transformation of a structure by maintenance without regard to the overall-effect on the structure has resulted in disaster.

The final draft of the report of Det Norsk Veritas, hired by the state, was not released by the state until  two weeks before the scheduled time and raises questions. Their risk analysis capabilities are world class, but I am most concerned that the report may contain information that Enbridge does not want the public to know. I am concerned the pipeline as it currently exists is a tragic accident waiting to happen. 

The Governor’s Flawed Tunnel Agreement

1. Paragraph F provides "THE STATE AND ENBRIDGE AGREE TO PROMPTLY PURSUE FURTHER AGREEMENTS ... " This does not obligate Enbridge to do anything, including anything now.   Paragraph G provides "ANY FAILURE TO REACH FURTHER AGREEMENTS CONTEMPLATED BY THE PARAGRAPH I.G. SHALL NOT ALTER ANY EXISTING RIGHTS ENBRIDGE HAS UNDER THE EASEMENT."   They give up nothing and do not agree to do anything such as build a tunnel in a timely manner or make the existing pipeline safe.

2. Paragraph G provides that the "Tunnel Project Agreement" "shall include provisions under which the (Mackinac Bridge) Authority will provide property necessary ... " The authority shall assume ownership of the Straits Tunnel and lease the tunnel to Enbridge without a commitment as to the amount or for how long. Meanwhile, they can use the existing "as is" pipeline despite whether or not it is safe. No mention is provided as to what Enbridge will owe.

3. Paragraph J provides their liability and damages in the event of a pipeline rupture are capped at $1,878,000,000 and secure it with "financial assurance mechanisms" - whatever that means, but not a surety bond.  It then goes on to note:  "The state agrees that Enbridge's compliance with the requirements under this Paragraph I.J. satisfies its financial assurance obligations specified under Paragraph J of the Easement."    This despite estimates ranging over $6 billion BEFORE THE COST OF FUTURE INFLATION IS DETERMINED.

No provision is made for the injured parties to otherwise collect. Obviously, every citizen in Michigan will also suffer irreparable damage. This provision goes into immediate effect even with the possibly of an unsafe existing structure.

My conclusion after thorough study of this agreement, which I have supplied to the Michigan House of Representatives, is that the approval of this agreement amounts to betrayal of the Public Trust Doctrine, with huge benefits to Enbridge and irreparable catastrophic damages to property and business owners and the citizens of Michigan.

Sincerely, 

William A. Crane • Judge Emeritus

 

Will Mackinac Bridge Authority Be Forced To Benefit a Share Driven Foreign Corporation?

As member and chairman of the Mackinac Island State Park Commission for over 22 years (1991-2013), I am writing to express my strong opposition to the incumbent governor’s plan to have the Mackinac Bridge Authority construct, own, and operate the Enbridge crude oil tunnel under the Straits of Mackinac. I oppose this “shot gun wedding” for all the reasons so ably stated by MBA vice chair Barbara Brown and by eight past members of the MBA board, including its most recent chairman, William Gnodtke.

Whether or not a tunnel should be built under the Straits is a separate issue.  The issue at hand is whether the MBA, which for 60 years has been an independent and effective public body operating the Western hemisphere’s longest suspension bridge free of outside influence and political pressure, shall now be forced to take on a totally unrelated project primarily benefitting a shareholder-owned foreign corporation.

The incumbent governor’s action in this matter fails the test of public transparency.  With one exception, MBA board members were kept totally in the dark as the incumbent governor negotiated his deal with Enbridge wherein he committed the MBA to this undertaking.  There is every reason to believe that two members of the MBA board (Messrs. Gnodtke and Musser) were not re-appointed when their terms expired on November 1 in large part because they could not be counted on to rubber stamp the governor’s Enbridge deal.  The successors appointed by the incumbent governor, however substantial their personal merits, are insiders from the governor’s administration who can be expected to rubber stamp for Enbridge what their predecessors would not.

This past week a bill was introduced into the Michigan legislature (SB 1197) at the behest of the incumbent governor.  The bill would specifically confer powers on the MBA to own and operate the tunnel.  But what are the fiscal implications for the bridge authority?  What will happen to bridge fares when assets are diverted to the tunnel project?  Will the MBA need to issue bonds and incur debt to meet their new obligations?  Will it need to hire more employees?  Who will pay for them?  Who will pay for the land?  Who will be responsible for the myriad problems which are sure to arise? 

I strongly urge your readers and the commissions and councils of all area units of local government to write and call Rep. Lee Chatfield (517-373-2629), Sen, Wayne Schmidt (517-373-2413), and Sen. Tom Casperson (517-373-7840), all addresses The Capitol, Lansing, MI 48909, to express opposition to SB 1197.

Straits area residents, indeed all Michiganders, should oppose this attempt to highjack the Mackinac Bridge Authority and pervert and jeopardize its purpose and mission.

Dennis Cawthorne • Mackinac Island • (517-332-8719)

Straits of Mackinac Alliance • Statement on Senate Bill 1197

November 18, 2018

The Straits of Mackinac Alliance is a growing group of ordinary citizens.  Most of our membership lives or owns property on or near the beautiful waters of Lake Michigan or Lake Huron.  The mission of the Alliance is to protect the waters of the Great Lakes watershed.

I serve as chair of the Alliance and have a unique perspective on Enbridge’s Line 5 pipeline.  I live in the home nearest to the pipeline on the St. Ignace shoreline.  From my house I watch the eagles, the freighters, the ever-changing waters and the Mackinac Bridge.  Night or day the Mighty Mac stands as the jewel of the Straits and the icon of the State of Michigan.  Every time I look out at those waters, I also realize the risk of 23 million gallons of oil running under the Straits every day.

The Alliance is not opposed to pipelines while we transition to renewable energy sources.  But the placement of an oil pipeline anywhere near, in or under the Great Lakes is an unacceptable risk beyond any standard of common sense.   Safety and the environment take on greater meaning when you and your family live at ground zero.          

Earlier this fall, Governor Snyder and Enbridge (owners of Line 5) signed an agreement to negotiate a deal whereby the state would allow Enbridge to build a tunnel to carry oil product under the Straits of Michigan.  Michigan’s part of the “deal” would be to give ownership and operation of the tunnel to the Mackinac Bridge Authority.             

In order to operationalize the deal between Enbridge and the Mackinac Bridge Authority (MBA) a new agreement (#3) was proposed during the November 8th board meeting of the MBA.  The MBA, not the State of Michigan would be the partner of Enbridge. 

While the board meeting was taking place, Senate Bill 1197 was introduced to amend the Mackinac Bridge Act.  SB 1197 would allow the MBA to own and operate a utility tunnel.  Although the name Enbridge does not appear in the legislation, it is clear that the legislation is specifically created for the benefit of this foreign corporation and not the people of the state of Michigan.           

The downsides of this legislation far outweigh the benefits to Michigan.  First and foremost, the Bridge Authority will be giving up six decades of independence and freedom from outside influence and political pressure…. all for the benefit of a foreign corporation.  During Republican and Democrat administrations, the MBA has remained separated from politics; focusing only on operating and maintaining a safe transportation corridor.         

Partnering with the MBA would grant Enbridge access to public and private lands through the power of condemnation. It may also allow Enbridge to bypass environmental safeguards put in place to protect the waters and bottomlands of our state.            

There may also be huge financial risks associated with this public/private tunnel agreement.  What happens if the tunnel is built and Enbridge forfeits its responsibility? Who will be responsible for paying damages in the event that there is a major Line 5 spill once the MBA takes over ownership?  There are many “what ifs” underlying this partnership that have not yet been addressed.  The risks certainly appear to be much greater than the benefits.         

The most important risk is that the aged-out, damaged, Line 5 will continue to pump 23 million gallons of oil product every day, 7 days a week for at least 10 more years while the tunnel project is being done.  In fact, the latest agreement allows for extension beyond 10 years if there are construction delays or other circumstances that would lengthen the build time.            

Keeping Enbridge’s Line 5 in operation for at least another decade is unacceptable.  The risk to property, tourism, and the environment is simply too great to allow this to happen.  In the event of an oil spill from Line 5, the economy of Northern Michigan would be devastated.  Our quality of life would be ever changed. 

The Straits of Mackinac Alliance is opposed to SB 1197 and the proposed 3rd agreement between the Mackinac Bridge Authority and Enbridge.    We urge you to join us in opposition to any efforts that would keep the current Line 5 operating in our precious waters. 

Patty Peek • Chair, Straits of Mackinac Alliance • P.O. Box 384 • Cheboygan, MI

December 1st Update

The Review has just received the following communication from Judge William Crane:

On behalf of the Straits of Mackinac Alliance, I want to sincerely thank the Review publishing my letter to the legislature, Mr. Cawthorne's letter and President Peeks SMA position statement.  The weight of your voice and many others has not changed Mr. Horn's mind, but has caused even the Senate to reconsider adoption of Senate Bill 1197 to at least remove the Mackinac Bridge Authority in favor of a new Authority. 

Next Tuesday will be important.  Calls to Senator Ken Horn and Representative Tim Kelly are more timely than ever to oppose this bill. I am sad to say, I have not had a response to my submittal of the engineer's reports critical of the safety of the current pipeline.  Thus a request they be examined as I requested within three months by a qualified independent structural, civil and metallurgical engineers is also urgent.  Thanks again for your role in bringing this to the public's attention.  William Crane, Judge Emeritus.

 

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