Experts are painting a grim picture of what Canada could face if the Line 5 pipeline gets shut down, with some saying the country could see its fuel capacity get cut in half.
The pipeline, which serves as a vital artery for North America’s energy infrastructure, is facing a looming shutdown threat from Michigan Gov. Gretchen Whitmer, who set a Wednesday deadline last November that owner Enbridge has said it has no plans to meet.
If the line does get shut down — either before or after a court-appointed mediator is set to meet with the two sides again on May 18 — petroleum analysts say it would cause “a significant, violent reaction economically” across Canada.
“Consumers would have no fuel, and by no fuel I mean 66 per cent of Quebec’s oil would be cut off, 50 (per cent) for Ontario,” said Dan McTeague, president of Canadians for Affordable Energy.
“You’re looking at a real scenario where most of the jet fuel use for Ottawa, Toronto, Detroit international airports would definitely be offline. … The damage to the western Canadian economy would also be significant. Right across the board, a bad situation.”
Whatever fuel remains in Canada would likely see a dramatic markup, McTeague adds.
“Eastern Canada would be looking at a 20 to 50 cent per litre increase — if you could find it,” he said.
McTeague says fuel shortages would also impact the ability for trucks or trains to pick up the slack left behind by the pipeline, which carries roughly 540,000 barrels of crude oil daily between Wisconsin and Ontario.
Enbridge has said less than 10 per cent of that shortfall could be replaced by rail transportation, leaving the rest of that fuel supply in limbo.
Werner Antweiler, an associate professor at the University of British Columbia’s Sauder School of Business, says he hasn’t been able to fact-check that figure. Yet he said in an email to Global News that a shutdown would see the greatest impact in jobs and gas prices for Canadians.
“The reduction in environmental risk from an immediate shutdown does not appear to be justified in light of the significant economic costs imposed by the shutdown,” he wrote.
The federal government on Tuesday painted a similar picture in an amicus brief filed in U.S. federal court, arguing that shutting down the pipeline would deal a “massive and potentially permanent” blow to Canada’s economy and energy security and risk lasting damage to relations with the United States.
“A hastily and unduly imposed shutdown would undermine the confidence in reciprocal, enforceable commitments and cross-border co-operation that lies at the heart of the United States-Canada relationship,” the brief reads.
The dispute first erupted in November when Whitmer — citing the risk of an environmental catastrophe in the Straits of Mackinac, the waterway where Line 5 traverses the Great Lakes — revoked the easement that had allowed the line to operate since 1953.
Enbridge insists the pipeline is safe, and has already received the state’s approval for a $500-million effort to dig a tunnel beneath the straits that would house the line’s twin pipes and protect them from anchor strikes.
The company said on Monday that it will not stop operating the pipeline “unless we are ordered by a court or our regulator to do so, which we view as highly unlikely.”