Canada formally invokes 1977 treaty in bid to prevent Enbridge Line 5 shutdown

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Rodney Coleman-Robinson/Detroit Free Press/TNS

The Canadian government on Monday formally invoked a 1977 treaty that the country's officials say prevents the U.S. government or Michigan from disrupting the operation of Enbridge's Line 5 oil pipeline, effectively pulling the Biden administration into the dispute over the pipeline's future.

Michigan Gov. Gretchen Whitmer quickly reacted by saying she was "profoundly disappointed" by Canada's decision and called on Prime Minister Justin Trudeau to reverse the invocation.

Gordon Giffin, a former U.S. ambassador to Canada under President Bill Clinton who is now acting ascounsel for the government of Canada, informed U.S. District Judge Janet Neff of the rare invocation of the 1977 transit pipeline treaty in a Monday court filing. Giffin asked the Western District of Michigan judge to pause her consideration of the case during treaty negotiations.

In the filing, Canada said it had invoked the treaty provisions "through diplomatic channels" earlier in the day and made a formal request to begin negotiations with the U.S. The U.S. State Department did not return a request seeking comment.

The 1977 agreement between President Jimmy Carter and Trudeau's father, former Prime Minister Pierre Trudeau, put limits on transit pipeline actions that may harm the energy supply in either country. Monday marks the first invocation of the treaty since it was signed.

Canada's letter to the judge more than two weeks after court filings indicated mediation talks between the state and Line 5 owner Enbridge over the future of Line 5 are largely at a dead end.

Neff is considering whether Michigan's case against the Straits of Mackinac pipeline, which Enbridge had moved to federal court, should be moved back to the state court where it originated. Enbridge has argued the litigation should be in federal court since Line 5 falls under federal jurisdiction, but the state has argued Michigan's environmental laws support consideration in state court.

"It is neither necessary nor proper for this court (or any other domestic court) to make any determinations that could undermine, conflict or interfere with the obligations and processes established by the Treaty," Giffin wrote in Monday's filing.

"... Canada respectfully submits that with the triggering of the Treaty’s dispute settlement process, the Court should hold proceedings relating to Michigan’s Line 5 shutdown order in abeyance."

In a Monday statement, Canadian Minister of Foreign Affairs Marc Garneau noted the U.S. and Canada have placed high priorities not only on economic and energy security but also on "fully respecting and implementing the international agreements."

"Line 5 is governed by the provisions of the 1977 Agreement between the Government of Canada and the Government of the United States of America Concerning Transit Pipelines, which guarantees the uninterrupted transit of light crude oil and natural gas liquids between the two countries," Garneau said.

Canada's move is one of the strongest options to force the debate into federal discussion, drawing in the Biden administration, which has so far largely remained mum on the issue, said Christopher Sands, director of the Canada Institute at the Wilson Center International Institute in Washington, D.C.

"It is rare, but I think it is being driven a little bit by the strange nature of this issue," Sands said. "It’s an international pipeline, but the state is asserting jurisdiction over it. Both are valid positions to argue from.”

Whitmer, Nessel strike back

While calling Canada a "strong partner," Whitmer noted the nation's decision endangered Michigan waters on behalf of a "private oil company" and criticized Canada for past proposals to store nuclear waste in the Great Lakes basin.

"I had expected that Canada, a nation that prides itself on its commitment to environmental protection, would share my interest in protecting the Great Lakes," the governor said. "Instead, the government of Canada has chosen to do the bidding of the very oil company responsible for the 2010 Kalamazoo River oil spill — one of the largest inland oil spills in the history of the nation that happened right here in Michigan."

The Michigan spill was one of the worst in-land spills in U.S. history, sending more than 800,000 gallons of crude oil into a creek that flowed into the Kalamazoo River and fouling nearly 40 miles of the river. It resulted in a $177 million fine from federal officials and a $75 million settlement with the state of Michigan.

Attorney General Dana Nessel, a fellow Democrat representing the Whitmer administration in court, said Canada's letter was not a legal basis for delaying the court case.

"Neither the treaty nor the dispute resolution process are relevant to the question now pending before the court: whether the federal court has jurisdiction over the State’s suit against Enbridge," Nessel said in a statement.

Enbridge, which is headquartered in Calgary, said Monday it appreciated the efforts of "Team Canada" in coming to the defense of Line 5 — a reference to efforts from Trudeau's administration and the provinces of Alberta, Ontario and Quebecto reason with Michigan's governor.

"We have spoken with government officials on both sides of the border as the State of Michigan has let parties know it is not committed to further mediation," said Enbridge spokesman Ryan Duffy in a statement, noting the company planned to continue mediating in good faith.

Canadian interest

Canada's Monday filing is the first to indicate a formal invocation of the treaty, but the government did inform Neff in May that it had started discussions with the Biden administration in an effort to resolve the situation.

In its May filing, the government asked the judge to pause the shutdown of Line 5 while those discussions continued. Enbridge continued operating through a state-imposed May deadline for closure and remains operational.

In March, Canada's natural resources minister Seamus O'Regan told a parliamentary panel that the continued operation of the pipeline was "non-negotiable."

The U.S. State Department said in May that the two nations were in "continued cordial dialogue on topics of mutual interest to our bilateral relations, including cross-border pipelines."

Line 5 brings oil and natural gas liquids originating in Alberta and western Canada through Wisconsin and into Michigan's Upper Peninsula before heading south through the Straits of Mackinac and east across the Lower Peninsula before crossing into Sarnia, Ontario. Line 5 oil and natural gas products are used in Ontario, Michigan and other Midwest states.

Whitmer in November revoked Enbridge Energy's easement in the Straits of Mackinac and ordered the pipeline running through the Straits be shut down in six months or by May 12.

Whitmer and Nessel, who both campaigned on promises to shutter the line, have been seeking a shutdown order based on an easement revocation.

The 68-year-old dual span has been criticized by environmentalists for posing an undue risk of a catastrophic oil spill between Lakes Michigan and Huron. The line can pump up to 540,000 barrels of light crude oil and natural gas liquids over the line a day.

The National Wildlife Federation criticized Canada's decision to invoke the treaty, noting it came as an oil spill off California closed miles of popular beaches in southern California.

"They are ignoring the fate of people across the Great Lakes in favor of an oil corporation," said Beth Wallace, Great Lakes conservation manager for the National Wildlife Federation. "Michigan has the right and duty to protect the Great Lakes from the devastation we’re seeing in California and Canada should be seeking alternatives instead of delays.”

In 2018, Republican former Gov. Rick Snyder entered an agreement with Enbridge that would require the company to build a more than $500 million tunnel to house a new segment of Line 5 in the Straits.

Whitmer has said her shutdown order will not affect the permitting and construction process for the tunnel. But industry advocates have warned an abrupt shutdown of the pipeline would affect energy production and costs across the Midwest and Canada, particularly in Michigan's Upper Peninsula, which relies heavily on the natural gas liquids in the line for propane.

Move likely to create delay

The invocation of the treaty ensures Canada has a say in the matter and prevents the Biden administration from taking a neutral position on Michigan's decision, the Canada Institute's Sands said.

But, on a more practical level, the move also buys Canada time as it prepares to weather cold fall and winter temperatures in Ontario and Quebec, which both rely to some extent on the pipeline resources, he said.

"From a Canadian political point of view, if it buys them the winter, that’s a good thing, but it doesn’t exactly resolve the dispute," Sands said.

The treaty invocation ensures a hearty debate over who has jurisdiction over the line, but it will also prove an inconvenience for Whitmer and others looking to resolve the issue before the November 2022 election.

"If you’re Gov. Whitmer or one of the environmental groups, the clock is ticking because it's going to be so hard to resolve this during an election year," Sands said.

Most of the criticism from environmental groups in recent weeks has targeted the delays created by Enbridge and the Canadian government in court.

Environmental group Oil & Water Don't Mix argued Monday that Canada's invocation would "bottle up Line 5 in a second round of negotiations" after five months of fruitless mediation.

"Both U.S. District Judge Janet Neff and the Biden administration should see clearly that this action by Canada means more delay even though it's already been 11 months since Enbridge filed its federal court suit," said Sean McBrearty, coordinator for Oil & Water Don't Mix, in a statement. "Line 5 is a dangerous ticking time bomb in the Great Lakes."