Ontario jobs are at stake if Michigan blocks pipeline
CALGARY – Ontario politicians are increasingly alarmed at the prospect of thousands of job losses in the coming months and fuel shortages in the province if Michigan succeeds in shutting down Enbridge Inc.’s Line 5 pipeline.
The mayor of Sarnia, a southern Ontario city that’s home to three refineries and multiple petrochemical plants, says the city faces potentially 5,000 job losses as Michigan Governor Gretchen Whitmer has served Enbridge with notice the state is cancelling a decades old easement allowing its Line 5 pipeline, which runs from Western Canada to Michigan and southern Ontario, to cross the Straits of Mackinac through the Great Lakes.
The notice would require Enbridge to shut in the Line 5 pipeline in May, but the company is challenging the easement cancellation in court and has vowed to continue using the line.
Sarnia Mayor Michael Bradley said he’s concerned his Ontario city could now experience a replay of its worst days in the 1990s when thousands of locals lost their jobs when another pipeline shut down.
“In the ‘90s, we went through 6,000 or 7,000 jobs. It was devastating,” Bradley said, noting that at the time an ethylene pipeline from Alberta to Ontario shut down and Dow Chemical permanently closed one of its petrochemical plants in Sarnia.
Bradley said Sarnia couldn’t afford job losses as it recovers from the coronavirus pandemic. “One job is too many for us to lose.”
The mayor wrote Prime Minister Justin Trudeau a letter on Jan. 4 that he plans to circulate to every mayor in Ontario beginning next week. It states that Michigan’s decision to cancel the easement for Line 5 is a violation of the Transit Pipelines Treaty negotiated by former prime minister Pierre Elliott Trudeau and then-U.S. president Jimmy Carter. The treaty was voted for by then senator, now U.S. President-elect Joe Biden.
The cancelled easement would result in a shortage of 14 million gallons of gasoline per day and other transportation fuels in Ontario, Quebec, Wisconsin, Indiana, Ohio and Pennsylvania. “Ten regional refineries would be significantly adversely impacted, leading to a significant loss of jobs,” he wrote.
Ontario’s provincial government is also concerned that around 5,000 jobs are at risk if the line closes in a matter of months.
“This shut down will put over 4,900 jobs at risk in Sarnia and will jeopardize Ontario and Michigan’s energy supply that we rely on daily,” Ontario Energy, Northern Development and Mines Minister Greg Rickford said in a statement to Postmedia, adding the line’s permanent shutdown would lead to more of the product moving on trucks and railway cars and a resultant increase in emissions.
In a Dec. 4 letter to Whitmer, Ontario Premier Doug Ford said the shutdown of Line 5 “would threaten over 1,000 unionized jobs in Michigan and Ohio and result in a shortfall in regional fuel supply.”
A Canada Energy Regulator document shows six refineries in Ontario and the U.S. Midwest rely on Line 5 for the majority of their crude. Additional refineries in Quebec and the U.S. also rely on Line 5. In addition, petrochemical plants making plastic or fracturing heating fuels throughout the region also use the line.
One company, the Canadian subsidiary of Houston-based Plains All American Pipeline LP, has said that its three facilities in Ontario, Wisconsin and Michigan would close if Michigan shut down Enbridge’s Line 5 and warned that such a move would likely spark a state of emergency in that state.
“Notably, shutting down Line 5 would result in the inevitable shutdown of Plains facilities at Sarnia, Rapid River (Michigan) and Superior (Wisconsin),” Plains Midstream Canada ULC vicepresident Sterling Koch wrote in a Dec. 3 letter to Whitmer, adding the shutdown would cost 125 people their jobs.
The Plains facility in Sarnia takes condensed natural gas from the line and strips out the propane and butane before sending those two commodities back to Michigan and Wisconsin. Koch’s letter warns that shutting down the two facilities would cause a massive price spike in both Michigan and Wisconsin for heating fuel.
“In the medium term, propane shortage induced price impacts would be expected to be much more severe and lasting than those experienced during the polar vortex induced shortages in the winter of 2013⁄ 14 that prompted Michigan and several other surrounding states to declare a state of emergency,” Koch wrote.
In addition to providing more than half of the heating fuels to Michigan, Line 5 also supplies all of the fuel to Toronto Pearson International Airport and much of the fuel to Detroit Metropolitan Wayne County Airport, said Scott Archer, a business agent with UA Local 663, a labour union, in Sarnia.
Shutting down Line 5 “would entirely cripple the economy of this region,” Archer said, adding that companies with refineries in the area have warned of layoffs.
“They’re telling us 5,000 to 6,000 direct employees in Sarnia,” Archer said, noting that would be a huge hit to the employment rate in a city of 72,000 people. “It would be a massive blow because everyone here has someone that works in the refinery in their family. It would just take the legs right out from under the town.”