Enbridge Statement on Future of Line 5 in Michigan
CALGARY, May 30, 2019 /PRNewswire/ - Enbridge Inc. (TSX: ENB) (NYSE: ENB) (Enbridge or the Company) today addressed statements made yesterday by the Michigan Attorney General and Governor about our joint efforts with the State on the proposed construction of an underground tunnel that would ultimately house a replacement of the existing Line 5 pipelines across the Straits of Mackinac, which have always operated safely.
In recent meetings and in a letter to the Governor, Enbridge has reiterated its shared vision with Michigan of further reducing risk and how we believe constructing a tunnel to house the Straits pipelines is the most effective and timely way to remove the existing Line 5 while ensuring the critical energy needs of Michiganders are met. Enbridge has committed to construct the tunnel as quickly as prudently possible and to advance a number of additional protective measures while we construct the tunnel. Given the Attorney General's opinion that the previous administration tunnel authority is invalid, Enbridge engaged and has continued to engage the State about alternatives to address that concern.
Discussions with the State along with additional commitments from Enbridge mean we can get the tunnel under construction and complete sooner than previously anticipated. Assuming we are able to move through the permitting process without delay, we believe the tunnel can be under construction in 2021 and in service as soon as early 2024. As previously committed, operation of the current Line 5 would cease immediately following the placement into service of the replacement pipeline in the tunnel. Enbridge has also committed to provide additional safety measures surrounding its operation during that interim period while the tunnel is being permitted and constructed.
Line 5 continues to be a critical piece of infrastructure. It currently serves the propane needs of the Upper Peninsula and Northern Michigan, providing roughly 55 percent of the entire state's propane needs for heating homes while supporting agriculture and manufacturing needs. Michigan is also a net-importer of transportation fuels and Line 5 provides feedstock not just to the Detroit refinery but those in neighboring states that are critical to meeting the state's energy needs. These same refineries supply a large proportion of the aviation fuel at the Detroit Metropolitan Airport, a vital contributor to basic transportation and the state's economy.
According to the U.S. Department of Transportation, pipelines are the safest way to move energy. It would take 2,150 tanker trucks – 90 leaving the terminal every hour, 24 hours a day – or more than 800 rail cars each day to deliver the amount of energy carried by Line 5.
Enbridge takes its responsibility to deliver vital products to Michigan communities and customers seriously, and is prepared to invest $500 million to build this tunnel solution.
Line 5 is safe and critical to Michigan and we therefore continue to operate it. As referenced in the attached backgrounder, independent analysis commissioned by the State of Michigan and the Pipeline and Hazardous Materials Safety Administration have confirmed the safety of the existing pipeline. This includes an independent scientific study in 2017 that determined there are no feasible alternative routes for a new pipeline, and no better alternative mode of transporting the energy that Line 5 carries. Further, a State-commissioned report, Alternatives Analysis for the Straits Pipelines, concluded the risk of a release into the Great Lakes from a replacement pipeline built within the proposed underground tunnel would be "negligible" and "un-quantifiably low."
Notwithstanding the safety of Line 5, it is our view the tunnel represents a practical approach to meeting the state's energy needs while providing the people of Michigan with even greater protection of this crossing to as near zero risk as humanly possible. Moreover, Enbridge has undertaken numerous added measures that exceed regulatory requirements.
Geo-technical activities in support of the 2019 work plan necessary to preserve the 2021 construction start have commenced, with increasing commitments to contractors ramping up leading into the summer months. Enbridge is fully prepared to proceed with the 2019 program, necessary permitting and construction of the tunnel but it is awaiting the State's decision on supporting that path forward.
Line 5 was originally built to serve the energy needs of Michigan in a safe and reliable way and that objective remains today. We look forward to further collaboration with the state to ensure an orderly and diligent permitting process so that we can continue with design and construction planning for the Straits tunnel.
Although Enbridge believes these forward-looking statements are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties and other factors, which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements. Assumptions regarding the expected supply of and demand for crude oil, natural gas, NGL and renewable energy, and the prices of these commodities, are material to and underlie all forward-looking statements, as they may impact current and future levels of demand for the Company's services. Similarly, exchange rates, inflation and interest rates impact the economies and business environments in which the Company operates and may impact levels of demand for the Company's services and cost of inputs, and are therefore inherent in all forward-looking statements. Due to the interdependencies and correlation of these macroeconomic factors, the impact of any one assumption on a forward-looking statement cannot be determined with certainty. The most relevant assumptions associated with forward-looking statements with respect to projects such as the replacement of Line 5, including estimated completion dates and expected capital expenditures, include the following: the impact of customer, government and regulatory approvals on construction and in-service schedules and cost recovery regimes; the availability and price of labour and construction materials; the effects of inflation and foreign exchange rates on labour and material costs; the effects of interest rates on borrowing costs; and the impact of weather.
Enbridge's forward-looking statements are subject to risks and uncertainties, including, but not limited to those risks and uncertainties discussed in this news release and in the Company's other filings with Canadian and United States securities regulators. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these are interdependent and Enbridge's future course of action depends on management's assessment of all information available at the relevant time. Except to the extent required by applicable law, Enbridge assumes no obligation to publicly update or revise any forward-looking statements made in this news release or otherwise, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to Enbridge or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.
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LINE 5 BACKGROUNDER AND TIMELINE
Line 5 Critical to Michigan's Energy Needs
Line 5 Can Operate Safely for Decades
Tunnel Makes Safe Pipeline Even Safer
July 14, 2015
September 3, 2015
June 18, 2017
October 26, 2017
November 27, 2017
June 14, 2018
October 3, 2018
December 19, 2018
May 21, 2019
Fourth quarter 2021
First half 2024
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SOURCE Enbridge Inc.