This article originally ran on Forbes.com on Nov 15, 2021. All rights reserved.
Daniel B. Markind is a Forbes.com energy column contributor. The views expressed in this article are not to be associated with the views of Flaster Greenberg PC.
The Biden Administration has announced that it is not, for now, supporting the closure of the Line 5 pipeline, which carries Canadian oil and gas across the border into Michigan. Gov. Gretchen Whitmer has pushed in recent months for the line’s closure, on environmental grounds. The Administration announced that it was not attempting to close Line 5 after all. Instead, it will continue a review by the Army Corps of Engineers and will maintain intensive talks with the Canadian government about the pipeline’s future.
Closing Line 5 would have limited the flows of oil and gas from Canada, which would have kept pressure on rising fuel prices, especially gasoline and propane. In addition, immediate closure of the pipeline would have dramatically affected Canada’s economy and energy services on both ends, as the oil and gas products transported by Line 5 are first drilled and enter the pipeline in Western Canada, are then transported through the Northern United States where the pipeline deviates into Michigan, and are ultimately delivered for refining after the pipeline then reenters Canada and terminates at a refinery in Sarnia, Ontario. As that refinery is also a major source of production of jet fuel for airports in both Eastern Canada and the US Midwest, closure of the pipeline also could have caused a large disruption in jet fuel available to both countries’ airports, but especially those in Canada.
Noting that the pipeline, which was built in 1953, traverses the Straits of Mackinac which separate the Upper and Lower Peninsulas of Michigan and are where Lake Huron connects with Lake Michigan, Governor Whitmer declared that the pipeline was too environmentally dangerous to be allowed to continue to function, that Enbridge had violated a 1953 easement entered into between Michigan and Canada, and that Enbridge needed to stop using the pipeline. Enbridge refused. Publicly defying Governor Whitmer’s order, Enbridge continued using the pipeline past the May 12, 2021 deadline that the Governor had imposed. Governor Whitmer then went to court.
This move brought in the Canadian Federal government, which has stated that the pipeline is essential for Canada’s economic and energy security. After months of unresolved talks, Canada then invoked the 1977 US-Canada treaty concerning the transshipment of energy. Why a Decades-Old Pipeline Has Canada and Michigan at Odds - The Washington Post
Following the poor results of last week’s elections for Democrats, with inflation rising, winter approaching, and the US’s largest trading party now furious with it over Line 5, Biden finally bowed to the inevitable. While not explaining exactly what he or Governor Whitmer intend to do to resolve the dispute, the President took its potential closure off the table – at least for the time being.
Both the importance of the move and the resultant political consequences for the President should not be underestimated. Since his first day in office, when he closed the Keystone XL pipeline, through the disappointing November 2021 elections when the President was at a climate summit in Glasgow, Scotland, President Biden has consistently taken aim at the fossil fuel industry. He has championed the “Green Energy” movement and sided consistently (and some may say overly aggressively) with the environmentalists against the potential build out of the fossil fuel infrastructure, virtually at every turn.
At times this has produced almost farcical results. At the same time that President Biden has made shale oil and gas drilling and the movement of products produced by such drilling more and more difficult in the United States, he has asked OPEC to drill for more oil internationally.
And just last week, he also blamed Russian President Vladimir Putin for causing gas prices to spike in the US, claiming that Putin is not pumping enough gas to help alleviate an anticipated energy shortage during the winter.
It is one thing to note the apparent inconsistencies in Biden’s energy policies and positions. But how all of this makes sense from a global environmental or American national security perspective remains anybody’s guess.
Now, almost one year into his Administration, Biden has finally pulled back. For the first time, the potentially immediate political, economic, and diplomatic ramifications of alienating Canada and causing a major price spike in the United States, especially with winter fast approaching, proved too great for the President. That move, however, has left Governor Whitmer hung out to dry in a state that the Democrats absolutely must hold in 2024 to retain the White House. It also has infuriated environmentalists and Progressives at a time when the Build Back Better reconciliation bill remains stalled in the House of Representatives.
That the President was prepared to pay this price shows how dangerous the move to close Enbridge Line 5 would have been in the first place – especially with no viable alternative pipeline in place for the foreseeable future. It also shows the danger of letting national policy be tailored to assuage a special interest group’s demands when there may be no real world alternative than to do exactly what that group most objects to. The Northeast US could be very vulnerable to gas shortages should the winter of 2022 be severe in that region of the country. If we see a repeat of 2018, when Russian ships had to supply Russian natural gas to the Mid-Atlantic, notwithstanding the fact that massive quantities of gas exist just a few hours away in Northeastern Pennsylvania, the President will take another immense political hit just a few months before the crucial 2022 midterm elections.
All presidents have a political base to which they are indebted, yet all face real world realities that can sometimes conflict with the desires, wishes, and demands of that base. Enbridge Line 5 has ultimately proved a “bridge too far” for this President to uphold his base’s wishes. We shall see how, or if, this experience will lead the President toward more realistic, and secure, energy policy as his term plays out, or whether the lessons that have been learned from the Line 5 debacle will be too quickly forgotten.
- Daniel Markind