Line 5 tunnel deal may preempt promised Nessel suit
Lansing — A proposed agreement between the state of Michigan and Enbridge could scuttle Democratic Attorney General-elect Dana Nessel’s plans to seek an injunction against the controversial Line 5 oil dual pipeline beneath the Straits of Mackinac.
While on the campaign trail, Nessel said she felt confident she could shut down Line 5 by filing a lawsuit in the Michigan Court of Claims arguing the oil company violated its 1953 easement.
But a proposed agreement between the state and Enbridge released Thursday appears to challenge Nessel's plans by including a section that asserts the company is in compliance with the easement as long as it meets benchmarks for financial assurances, visually inspects and repairs pipeline coatings, and maintains supports for the dual pipeline.
“Based on currently available information, the state is not aware of any violation of the 1953 easement that would not be addressed and cured by compliance” with two separate sections of the agreement, the document reads.
The section was included in the agreement "to ensure ongoing compliance and increased safety during the few remaining years of Line 5’s operation," said Ari Adler, a spokesman for Gov. Rick Snyder.
On Friday, Enbridge said it was in full compliance with the easement and looks forward to working with Nessel and Democratic Gov.-elect Gretchen Whitmer, who has said she wants to decommission Line 5.
“Right now, it’s our most inspected piece of pipeline in our current system,” said Enbridge spokesman Ryan Duffy.
The controversial pipeline was a “pillar” of Nessel’s campaign and she continues to be concerned by “the hasty legislative rush-to-judgment efforts” to push through the plan without proper vetting, said Kelly Rossman-McKinney, a spokeswoman for Nessel’s transition team.
“Ms. Nessel is committed to exploring the options of the AG’s office in furthering the goal of protecting Michigan against an oil spill in the Straits which will devastate our state,” Rossman-McKinney said in a statement.
The agreement announced by Snyder in October would allow Enbridge to continue operating its 65-year-old dual pipeline beneath the Straits of Mackinac until the completion of tunnel construction. It is a process that is expected to take up to 10 years and require the company to build a four-mile tunnel beneath the Straits at a cost of up to $500 million.
The dual pipeline spans have concerned environmental groups worried about the potential of a catastrophic oil spill that would spread into the Great Lakes.
Groups have opposed the proposed tunnel because it allows Line 5 to continue operating through construction and because of the abbreviated timeline for appointments and approvals in the final weeks of Snyder’s tenure.
But the fundamental flaw with the plan is it avoids compliance with the Great Lakes Submerged Lands Act of 1955, which would require a longer timeline for public participation and review, said Jim Olson, president of the environmental group For Love of Water.
"These agreements in my view are void because they do not comply with the submerged lands act,” he said.
Additionally, Olson said, the sections of the agreement clarifying the standing of Enbridge's easement are a calculated effort "to prevent others from trying to prevent the company from using the existing line."
State lawmakers took other measures this week to further protect the Enbridge tunnel construction agreement from the incoming Democratic offficials.
Legislators on Tuesday signed off on a law that would create a Mackinac Straits Corridor Authority to oversee the construction and operation of the proposed utility tunnel and inserted language regarding expectations for the attorney general.
Should the attorney general refuse to represent the authority, under the new law, she is required to pay for the cost of an attorney chosen by the authority.
The cases to which that provision could apply include lawsuits claiming the agreement is invalid, a claim challenging a permit or government approval for the project, or a lawsuit challenging the right of the authority to use state land for the project.
Price of deadlines, delays
The agreement detailing Enbidge’s compliance with the 1953 easement is one of three that was posted Thursday to mipetroleumpipelines.com.
The public has until Tuesday to comment on the third agreement between the state and Enbridge, the tunnel agreement between the Mackinac Straits Corridor Authority and Enbridge, and the proposed easement for the project in the bedrock beneath the Straits of Mackinac.
Public comment on the proposals will be accepted by phone at (833) 367-6713 or by email to DNR-StraitsTunnelComment@michigan.gov.
The Mackinac Straits Corridor Authority, whose three appointees were approved Thursday by the Senate, will meet Wednesday to consider the tunnel agreement.
The law under which the Mackinac Straits Corridor Authority was created requires the state to finalize the agreements by the end of the year. Both Snyder and Enbridge defended the timeline, noting that both parties have been in discussions for roughly four years prior to the final push in recent weeks.
“There’s been panels and boards and numerous studies and public meetings and discussions on it,” Duffy said. “It just makes sense to have all of the people working on this … to see it to the finish.”
The tunnel agreement in large part establishes the conditions of the tunnel construction: Enbridge will foot the bill for construction, operation and maintenance; the authority will procure rights to property needed for Enbridge’s construction; the authority will accept ownership of the tunnel upon completion; and the authority will lease that tunnel to Enbridge for 99 years.
The timeline for construction outlined in the tunnel agreement includes milestones that Enbridge must meet, but fails to dictate an end date for the construction. Instead, the agreement holds Enbridge to an unknown deadline that will be outlined in a future agreement with the company's construction contractors.
In the best case scenario, free of missed deadlines, delayed permits and lawsuits, "oil could cease flowing through the dual pipelines in the Straits of Mackinac in 2024," Adler said.
Should the company fail to meet the agreement's milestones, it must place deposits ranging from $15 million to $100 million into an escrow account and forfeit a percentage as the delay continues.
The milestones include a December 2019 deadline for the completion of geotechnical work; a requirement to submit federal and state permit applications within 180 days after the geotechnical report; an April 30, 2020, deadline for preliminary engineering and a draft request for proposals, and the hiring of a contractor and the start of construction within 180 days of obtaining all necessary permits.
If work on the tunnel is not substantially completed by the deadline Enbridge specifies with its contractors, the company must put $100 million into escrow and lose 5 percent for every 30-day delay.
"Delay events" that could permit a change in schedule include fires, flood, labor disputes, permit delays and legal injunctions.
The agreement also requires the straits corridor authority to agree to a “coordinated defense” with Enbridge should anyone take legal action that challenges the agreement, a government approval, a permit, or the state’s use of land for the project. Each party would pay its own attorney fees, costs and expenses associated with that coordinated defense.