Canada's Enbridge argues there is ‘no room' for Michigan's regulations as Line 5 hearings resume

Yahoo

28-01-2025

Snow on the banks of the Mackinac Straits, Mackinaw City, Feb. 7, 2023 | Laina G. Stebbins
Arguments in Michigan Attorney General Dana Nessel's case seeking to shut down a four-mile section of Enbridge's Line 5 oil and gas pipeline resumed Monday in the state's 30th Circuit Court, as her office squared off with the Canadian energy company.
Assistant Attorney General Daniel Bock challenged the validity of the 70-year-old easement allowing the pipeline to operate on the lakebed in the Straits of Mackinac where Lake Michigan and Lake Huron meet. Meanwhile Enbridge attorney Phillip DeRosier argued federal regulators exercise sole authority over pipeline safety, saying challenging the pipeline's operations in the Straits would violate a 1977 treaty with Canada.
Monday's hearing came after years of legal maneuvering kept debate outside of the courtroom. DeRosier argued the federal Pipeline Hazardous Materials Safety Administration has absolute authority over pipeline regulation leaving 'no room' for state regulation, pointing to the federal Pipeline Safety Act.
'Under the Attorney General's logic, all 50 states would have the authority to shut down existing pipeline operations based on current safety concerns, so long as those concerns are tied to location, even if those operations are necessary to the nation's energy and economic security. But that would create the very problem that led Congress to enact the Pipeline Safety Act in the first place,' DeRosier argued.
The state's action against the pipeline is also preempted by a 1977 treaty between the U.S. and Canada which bars public authorities in either country from putting forth measures which impede, divert, redirect, or interfere with the transmission of hydrocarbons, DeRosier said.
The treaty includes exceptions for 'an actual or threatened natural disaster, an operating emergency, or other demonstrable need temporarily to reduce or stop for safety or technical reasons the normal operation of a Transit Pipeline.'
Nessel and her team have previously referred to the pipeline as a 'ticking time bomb' raising concerns that an anchor or other object striking the pipeline could result in $1.37 billion in damages and alongside long lasting health, environmental and cultural damages.
Michigan Gov. Gretchen Whitmer's 2020 announcement that the state would be terminating the 1953 easement allowing Enbridge to operate Line 5 within the Straits also led to Canada invoking the dispute resolution procedures outlined in the treaty, with DeRosier urging the court to let this matter play out, and abide by the rules of the treaty.
The Federal Foreign Affairs Doctrine similarly demands the court leave this dispute to the U.S. and Canadian administrations, DeRosier said, arguing an injunction to stop the pipeline's operations would hamstring the U.S.'s efforts to resolve the dispute.
For these reasons, the court should grant Enbridge's summary disposition, DeRosier said, allowing the court to rule against the state without holding a full trial.
In response, Bock noted the Great Lakes and their bottomlands are not owned by the government, but by the people of Michigan, with the state government holding a perpetual, inalienable duty to protect and manage those resources for the people's benefit.
'In spite of that law, Enbridge has argued that it has the right to pump millions of gallons of oil through an aging pipeline in the heart of the Great Lakes, which has already been struck and damaged by anchors twice in recent years, regardless of whether it has a valid easement to do so,' Bock said.
While the Pipeline Safety Act preempts states from adopting or carrying forward pipeline safety standards, it does not say anything about state property or contract law, leaving routing and location decisions to the state, Bock said.
'It is absolutely permissible for governmental authorities, including state and local authorities, to bring actions against pipeline companies related to state laws, as long as the primary concern is not pipeline safety and the impact to pipeline safety is not direct and substantial,' Bock said, further arguing that the three laws forming the basis of its case — the public trust doctrine, the common law of public nuisance and the Michigan Environmental Protection Act — are not pipeline safety standards.
Additionally, the 2010 Kalamazoo River oil spill from Enbridge's Line 6B prompted a number of lawsuits from state, federal and tribal government authorities for environmental protection claims, Bock said. 'Notably, PHMSA was not among them, because PHMSA does not enforce environmental protection statutes,' Bock said.
He also argued the dispute resolution procedures outlined in the 1977 transit pipeline treaty only applies to the United States and Canada, noting it does not say anything about limiting the rights of property owners and barring them from enforcing their property rights, or enforcing the requirements of state law in court.
'If Enbridge is correct, and [the dispute resolution procedures] of the treaty means what Enbridge claims it means that would mean that an oil pipeline company could build a pipeline across anyone's land in trespass without an easement, and the property owner would be powerless to sue them or do anything about it,' Bock said.
There is also no violation of the treaty unless the pipeline is shut down, Bock argued, calling Enbridge's suggestion to let the resolution process play out a 'delay tactic.'
Bock also made several arguments as to why Foreign Affairs Doctrine does not apply, including a reference to a previous ruling from a federal Court in Maine which 'held that the foreign policy evidenced in the treaty is not one of maintaining uninterrupted flow of hydrocarbons at all times. It's one of applying the laws in a non discriminatory fashion,' which Bock argues Nessel had done.
'She's arguing that Enbridge and Line 5 are subject to state law exactly the same as everyone else, and they do not enjoy a special status that allows them to operate their pipeline on the property — the submerged Great Lakes bottomlands that belongs to the people of the state —without a valid easement and they are not allowed to operate in violation of the common law public trust doctrine, the common law of public nuisance or [the Michigan Environmental Protection Act]. And so the Foreign Affairs doctrine simply does not apply,' Bock said.
Throughout the course of oral arguments, both attorneys repeatedly pointed to the Bad River Band of Lake Superior Chippewa's case against Enbridge, where a federal judge found Enbridge had been trespassing on the tribe's sovereign territory after it opted against renewing Enbridge's permits to operate a 12 parcels of land owned land owned partially or wholly by the Bad River Band. As a result, Enbridge was ordered to pay $5.1 million in damages and must shut down the 12-mile section of the pipeline operating on the tribe's territory by 2026. Both Enbridge and the Bad River Band have appealed the decision.
Bock noted that the federal court had issued an order shutting the pipeline down because Enbridge did not have a valid easement to operate and locate Line 5, arguing the case's similarities to the argument brought by the attorney general, that Enbridge's easement was never valid because it violates the public trust doctrine.
However, DeRosier argued it may make sense for the court to wait until the U.S. Seventh Circuit Court of Appeals makes its decision on the appeals in the Bad River Case. He also challenged Bock's argument, noting that while the court determined there was a trespass in that case, there is no trespass claim in this case.
Bock later responded, noting the attorney general's case challenges the validity of the 1953 easement contract to operate Line 5.
'If the Attorney General was to lose this case, there could be no trespass claim because Enbridge would have a valid easement,' Bock said.
DeRosier further argued the 1977 transit treaty is clear that the flow of hydrocarbons are not to be impeded, and 'certainly not in a permanent way, as the attorney general is asking the court to do here.'
However Bock pushed back on DeRosier's description of the attorney general's arguments.
'The Attorney General's claim is that a four-mile segment of Line 5 cannot be located on the bottomlands of the Straits of Mackinac, and that having it located there violates a number of Michigan State laws, and that the conveyance that purports to authorize it was never valid. This is not an attempt to permanently shut down the entire pipeline. It's an attempt to get it out of this extremely environmentally sensitive area where it currently exists without valid permission,' Bock said.
With the attorney general filing a motion asking the court for a declaratory ruling determining on the 1953 easement was not valid and Enbridge filing its motion for summary disposition Bock said the only issues before the court Monday should be whether the easement is valid, and whether the attorney general's claims can proceed in court.
Judge James S. Jamo told both attorneys he would take the matters under advisement and issue a written opinion on the matter. It was unclear when the judge might rule.
Riyaz Kanji, who represented the Bad River Band alongside the Grand Traverse Band of Ottawa and Chippewa Indians, the Little River Band of Ottawa Indians, and the Nottawaseppi Huron Band of the Potawatomi in an joint amicus brief filed with the Bay Mills Indian Community said if the court accepts Enbridge's argument, it would rule out the state's ability to assert its sovereign rights as well as the claims brought by the Bad River Band to vindicate its rights. The decision would also have a significant effect on Michigan tribes with interest in the Straits of Mackinac.
He noted Enbridge had repeated a number of arguments from the Bad River case, which had been rejected by the federal court.
Both Bad River and the Michigan tribes have core treaty rights in the use and preservation of natural resources in their homelands and their home waters, Kanji told the Michigan Advance.
'In the Bad River case, Enbridge essentially argued, 'Well, it doesn't matter what treaty rights the band has and what promises were made to it about a permanent homeland. The 1977 U.S.-Canada treaty overrode all of that,'' Kanji said. 'I think the trial court in Bad River was absolutely correct in saying, 'No, that's not how the law works, it's the opposite.''
'[Tribal rights] are fundamentally important, and that's just law that Enbridge has consistently refused to honor or to respect,' Kanji said.
The path back to state court
In 2019 Nessel filed her case against Enbridge due to worries that the pipeline could rupture, spilling oil into the Straits. However, Enbridge filed a successful motion to have the case moved to federal court after more than a year of litigation.
Nessel's initial request to have the case returned to state court was denied, but she was later granted interlocutory appeal, allowing the U.S. Sixth Circuit Court of Appeals to determine the proper venue for the case before it is fully litigated in federal court.
The Court of Appeals ultimately determined the case belongs in state court, agreeing with Nessel's argument that Enbridge had missed the deadline to remove the case to federal court, later rejecting the pipeline company's request for a rehearing.