Enbridge Should Rethink Old, Troubled Line 5 Pipeline, IEEFA Says
[Editor's Note: This article was updated from a previous version posted on Jan. 7 to include a response to claims about the financial and strategic viability of Enbridge's tunnel project.]
(P&GJ) — A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) questions the financial and strategic viability of Enbridge Energy’s proposed tunnel project to replace an aging section of the Line 5 pipeline under the Straits of Mackinac.
The report highlights mounting costs and declining market demand for the pipeline’s products, suggesting that Enbridge should reconsider its approach. The $750 million project aims to replace two underwater pipeline segments with a tunnel beneath Lake Michigan and Lake Huron. However, IEEFA argues the investment may exceed initial estimates and offers limited long-term benefits.
“Enbridge should reconsider its current business strategy of pouring billions of dollars into redesigning troubled segments of the Line 5 pipeline,” said Suzanne Mattei, IEEFA energy policy analyst and co-author of the report. “An expeditious but well-planned approach for closing Line 5 would not only relieve Enbridge of debt burdens and significant litigation battles related to the projects, but also would allow the company to chart a more flexible energy transition course.”
The report outlines several key findings:
- Rising Costs: Enbridge initially estimated the tunnel would cost $500 million in 2018. By 2022, the projection climbed to $750 million, with further increases expected due to construction inflation and project risks.
- Financial Risks: Stock and bond analysts warn of Enbridge’s growing reliance on fossil fuel infrastructure and the debt burden associated with such investments.
- Declining Demand: The report notes that electrification and alternative energy technologies are rapidly reducing the market for Line 5’s products.
Despite these concerns, it’s important to consider the positive operational history and ongoing commitment to maintaining Line 5’s integrity. As it travels under the Straits of Mackinac, Line 5 diverges into two 20-inch-diameter parallel pipelines, often referred to as the “twin” pipelines.
These pipelines have been in service for over 65 years without incident at the Straits of Mackinac, providing crucial energy to Michigan. Line 5 supplies 65% of propane demand in the Upper Peninsula and 55% of Michigan's statewide propane needs, transporting up to 540,000 barrels per day of light crude oil, light synthetic crude, and natural gas liquids (NGLs).
Built in 1953 by Bechtel Corp., the Line 5 Straits crossing remains in excellent condition, according to Enbridge, with a durable enamel coating and pipe walls that are three times as thick as typical pipelines. The area of the Straits where the pipeline was placed minimizes potential corrosion due to a lack of oxygen and cold water temperatures, contributing to the pipeline’s exceptional longevity and safe operation, the company site stated.
While the IEEFA report emphasizes rising costs and market risks, Enbridge said it continues to monitor the pipeline 24/7 using advanced tools, expert divers, and remote operating vehicles (ROVs), exceeding regulatory requirements.
The institute's findings come amid ongoing legal and public scrutiny over the environmental risks posed by the aging pipeline. Critics argue that Enbridge’s reliance on fossil fuel infrastructure locks the company into a declining market trajectory.
The IEEFA's suggestion to decommission Line 5 and explore alternative energy strategies must be weighed against the practical needs of Michigan’s energy infrastructure.
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