Regulators deny quick approval of new Great Lakes pipeline

Traverse City, Mich. (AP) - A Michigan regulatory panel on Tuesday refused to grant quick permission to run a new oil pipeline beneath a channel that connects two of the Great Lakes, deciding instead to conduct a full review.

The state Public Service Commission's decision involved a proposed replacement for a segment of Enbridge's Line 5 that extends beneath the Straits of Mackinac, which links Lakes Huron and Michigan.

The Canadian energy transport company wants to replace dual pipelines that rest on the lake floor with a new pipe that would be placed in a 4-mile-long (6.4-kilometer-long) tunnel to be drilled in bedrock beneath the waterway.

Also Tuesday, a state judge heard arguments on whether to extend an order he issued June 25 to shut down the existing underwater segment after damage was discovered on a support piece at the lake bottom. Circuit Judge James Jamo promised to move quickly but made no immediate ruling.

That means Line 5 - which carries 23 million gallons of crude oil and natural gas liquids daily between Superior, Wisconsin, and Sarnia, Ontario - will remain closed for now.

The 645-mile-long (1,038-kilometer-long) pipeline supplies refineries in Michigan, Ohio and Pennsylvania, as well as the Canadian provinces of Ontario and Quebec.

Enbridge said halting its flow even temporarily threatens fuel supplies in those areas, while the state of Michigan and environmental groups contend a major spill would do considerably worse economic damage.

'œThere is a serious risk of harm ... to many communities that potentially endangers the livelihood of many people and businesses as well as the natural resources,'ť Robert Reichel, representing state Attorney General Dana Nessel's office, said during the online court hearing.

Enbridge filed an application in April with the Public Service Commission to relocate the underwater section of Line 5 into the proposed tunnel.

The company asked the commission to approve the plan immediately, arguing that the agency in effect had already given permission by allowing the original Line 5 in 1953. But during an online meeting, the panel disagreed on a 3-0 vote.

Members concluded that the proposed tunnel pipe 'œdiffers substantially'ť from the twin pipes that were laid 67 years ago, requiring a new easement and a 99-year lease of public trust property.

The project "involves important factual, policy and legal issues best resolved through a proceeding that includes discovery, comprehensive testimony and evidence to provide a robust record,'ť the commission said in a statement. It scheduled a public hearing for Aug. 24.

Enbridge's argument that the commission didn't need to conduct an extensive study of the plan drew opposition from Nessel and numerous members of the public who submitted written comments and spoke during the meeting.

'œEnbridge has already shown that they cannot be trusted,'ť said Sean McBrearty of the environmental coalition Oil & Water Don't Mix. The public service commission, he said, 'œmust thoroughly study this proposal and its potential impacts on our water and climate before making their final ruling.'ť

Enbridge spokesman Ryan Duffy said the company 'œrespects the Michigan Public Service Commission's decision and we look forward to the next steps in the regulatory process.'ť

During the court hearing, Enbridge urged Jamo to let Line 5 reopen, saying state governments have no authority to regulate interstate pipelines. That power rests with the federal Pipeline and Hazardous Materials Safety Administration, which has concluded that one of the dual pipes can operate safely, attorney David Coburn said.

Nessel's case 'œis based on fear, not facts,'ť Coburn said. 'œAnd her fear is not warranted by the facts here.'ť

Enbridge agrees one of the underwater pipes should remain closed temporarily as it investigates why a support that holds it in place was recently found bent. It likely was struck by an anchor or other object pulled by a 'œmoderate-sized vessel," attorney William Hassler said, adding that the pipe itself was not damaged.

The second pipe, which lies about 1,200 feet (366 meters) away, was not harmed and can carry oil safely, Hassler said.

Reichel countered that the easement Michigan granted Enbridge to place the pipelines on the bottom of the straits authorizes the state to ensure the company is operating them in a 'œreasonably prudent'ť manner.