Canada’s Enbridge Inc. will continue to operate its Line 5 despite an order from the U.S. state of Michigan to shut down the crude oil pipeline next week, CEO Al Monaco said on May 7.
Calgary, Alberta-based Enbridge Inc. has been locked in a long-running battle with Michigan over Line 5, which ships 540,0000 bbl/d from Wisconsin to Sarnia, Ontario, and is a crucial link in Enbridge’s crude export network.
Environmental campaigners say there is a risk a 4-mile (6.4-km) underwater section of the 68-year-old pipeline could leak into the Great Lakes. Michigan Governor Gretchen Whitmer last year revoked the pipeline’s easement, or permission to operate, and ordered it to shut down no later than May 12.
Enbridge is challenging Michigan’s order in federal court. The two parties have started mediation and Monaco said he did not expect any imminent court ruling.
“We intend to continue to operate the line and are certain we are in line compliance with the easement and the law,” Monaco said on a quarterly earning call.
The next round of mediation will take place on May 18.
Enbridge has proposed building an underwater tunnel to house the disputed section of pipeline, and said the permitting process for that continues. However, the cost of the tunnel is likely to be more than the initial estimate of $500 million, Enbridge executive Vern Yu told the call.
The company, Canada’s largest pipeline operator, reported a better-than-expected quarterly profit on Friday, driven by strong demand for oil and natural gas on its North American pipelines as global crude prices rebound following last year's pandemic-driven slump.
Enbridge’s adjusted earnings rose to CA$1.63 billion (US$1.34 billion), or 81 Canadian cents per share, in the first quarter ended March 31, from CA$1.13 billion, or 56 Canadian cents per share, in the fourth quarter. (US$1 = 1.2161 Canadian dollars)