Meanwhile in Michigan
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Screw the Yoopers...
One of our propane companies sent us an 'alert' about what the Governor is doing in Michigan with the Enbridge 5 pipeline. She ordered it shut down by May. Here is the December update - basically the UP will not have access to propane unless it is trucked in. This also affects the supply coming down to us, and oh, by the way, prices are going up exponentially.
If the Enbridge Line 5 pipeline shuts down next spring, Michigan has a matter of months to find a new way to deliver propane to Upper Peninsula residents who collectively use tens of millions of gallons from the pipeline annually to heat their homes.
But one month after Gov. Gretchen Whitmer announced that she’s giving the Canadian oil giant until May to shutter the 67-year-old pipeline that runs beneath the Straits of Mackinac, her administration still won’t say exactly how Michigan will make up the difference.
Spokespeople for Whitmer did not respond to numerous calls, texts and emails asking about potential contingency plans. Spokespeople for key state agencies told Bridge Michigan they’re studying alternative ways to meet U.P. propane needs, but none identified specific solutions that would be in place by next heating season.
And while state officials and industry experts have said they expect the free market to adjust on its own, industry representatives said so far, they’ve made only tentative progress on the infrastructure investments necessary to wean the U.P. off Line 5.
Experts who spoke to Bridge for this article said it’s possible to transition the Upper Peninsula to other propane sources using delivery methods such as truck or rail, but it will take money, time, and a clear strategy — with no guarantee it’s possible to achieve in a matter of months.
“A lot of things have to go right,” said Eric Pardini, a director with Lansing-based Public Sector Consultants, who led a state-commissioned study outlining pathways to transitioning the Upper Peninsula’s propane sector.
“The number of potential solutions gives me optimism, but it doesn’t give me peace.”
In the absence of a detailed plan from the state, Upper Peninsula propane providers complain that they’re left to decide for themselves how they’ll serve their customers next year. Some are pursuing other sources of supply. Others are stalling as Enbridge and state attorneys wage a court battle that could determine whether the shutdown order sticks.
That, Pardini said, sets up a “game of chicken” between the industry and the Whitmer administration over changes that must happen to ensure a Line 5 shutdown doesn’t strand tens of thousands of U.P. residents without a reliable propane supply come next heating season.
Small volume, big impact
By volume, the propane siphoned from Line 5 to supply the Upper Peninsula represents just a fraction of a percent of the pipeline’s 540,000 barrel-per-day capacity.
But nearly 1 in 5 Upper Peninsula households use propane to heat their home — almost quadruple the national average, and more than double the rate of propane-dependency in the Lower Peninsula.
And a large majority of that propane comes from Line 5, with few readily-available alternatives. Enbridge estimates that Line 5 satisfies 65 percent of Upper Peninsula propane demand; Public Sector Consultants estimated it’s even higher, at 87.6 percent.
Fears that a shutdown would compromise Upper Peninsula energy security have been a key sticking point for Line 5 supporters who argue the lakebottom dual-span should remain in place until Enbridge can replace it with a new segment buried in a tunnel beneath the lakebed.
After Whitmer announced the shutdown, Sen. Jim Stamas, R-Midland, went so far as to publish a statement warning it will “freeze Northern Michigan homeowners and workers.”
Pipeline opponents, meanwhile, say those concerns are overblown scare tactics meant to justify keeping the pipeline open despite oil spill concerns arising from the aging pipeline’s exposed position below a busy shipping channel. The total volume of Line 5 propane used in the U.P. is relatively small, they reason, so replacing it should be possible.
“We’ve got 15,000 households that use it. That’s basically the size of Muskegon,” said Liz Kirkwood, executive director of the nonprofit advocacy group FLOW (For Love of Water). “There are challenges, but that doesn’t mean we can’t achieve them.”
And the economic damage from a possible spill, Line 5 opponents argue, would far surpass any economic impact of a shutdown. A 2018 analysis commissioned by FLOW valued the total economic and natural resource impact of a major spill at more than $6 billion.
Natural gas liquids and crude oil destined for facilities in southeast Michigan, Ohio and Canada make up the bulk of the line’s freight, and Enbridge has warned that a Line 5 shutdown also threatens fuel security in the Lower Peninsula. But the Lower Peninsula benefits from better access to propane storage and more readily-available supply alternatives than the U.P., Pardini said.
Natural gas liquids from the pipeline are offloaded at a terminal in Rapid River, near Escanaba, where they are processed to produce 33 million gallons of propane every year. Propane companies then buy the product and use it to fill the backyard pig tanks of customers throughout the region.
Although the terminal is upstream of the Straits portion of the pipeline that Whitmer has ordered shutdown, Enbridge spokesman Ryan Duffy told Bridge the company will not continue delivering petroleum products to Rapid River if Line 5 is shuttered at the Straits.
“You're not going to run a whole pipeline, necessarily, just to deliver a tiny bit of propane, natural gas liquids, to a small market,” Duffy said.
Losing access to Rapid River would spell “disaster” for David Naser, who said his Naser Propane Company gets all of its supply from the terminal, a 40-minute drive from his company’s Powers headquarters.
“We don’t have anywhere else to go,” Naser said, nor the ability to truck propane in from suppliers further afield. “The trucks are expensive. The tankers are expensive, and then you’d have to find drivers, too.”
