NEWS RELEASE
ATTORNEY GENERAL DANA NESSEL
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LANSING – A new expert report has shed light on the likely economic impacts of a Line 5 shutdown, indicating that such effects would be minimal. The report, prepared by economic and industrial logistics experts PLG Consulting, is the latest and most detailed in a series of expert analyses of what would happen to oil and gas prices if Line 5 shuts down. The key takeaway is that “energy markets will adapt – as they have always done and continue to do – in the event that Line 5 is shut down. With advance notice, the markets can be expected to do so without supply shortages or price spikes.”
Attorney General Dana Nessel praised the report. “This report is a game-changer, and it confirms what I and others have said for years,” Nessel said. “Enbridge has tried to justify its operation of a dangerous pipeline in the Great Lakes by arguing that Line 5 is too important to the economy to shut down. Those claims have never been true – Enbridge is concerned with its own profits, not Michigan’s economy. As this new report shows, Michigan does not need Line 5.”
One of the main reasons PLG Consulting concludes a Line 5 shutdown would have little economic impact is that the companies reliant on Line 5 know that a shutdown is possible and already have contingency plans in place. The report notes that the companies that rely on Line 5 “are sophisticated and large energy firms” and “for at least the past six years, contingency plans have been developed by key refiners and other businesses whose supply chains may be altered in the event of a Line 5 shutdown.”
“Enbridge has known of the possibility of a Line 5 shutdown for years, and yet they have consistently claimed that a shutdown would cause an economic catastrophe.” Nessel said. “The truth is that Enbridge and the companies that receive oil and gas from Line 5 have had ample time to prepare contingency plans. The failure to do so would be professional malpractice.”
Last month, Nessel filed an amicus brief in support of the Wisconsin-based Bad River Band of the Lake Superior Tribe of Chippewa Indians of the Bad River Reservation in their lawsuit against Enbridge. In that brief, Nessel responded to various claims made by Enbridge and other oil industry groups that shutting down Line 5 would have dire economic consequences. Nessel’s amicus brief countered that the State of Michigan has studied the potential impacts of a Line 5 shutdown for years, and that the claims of Enbridge and its oil industry allies are exaggerated. Nessel’s brief stated that Michigan’s efforts to study these impacts “have demonstrated to the State of Michigan’s satisfaction that markets will ably adjust to a court-ordered shutdown of Line 5, and that Michigan is well positioned to manage any impacts that occur.” Nessel’s brief added that “any impacts associated with a shutdown of Line 5 are far outweighed by the grave risk of irreparable environmental and economic harm posed by its continued operation.”
The full PLG Consulting report is available here: White Paper: Likely Market Responses to a Line 5 Shutdown - PLG Consulting
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