President Biden is under fire once again for an attack on oil and gas as Canada has requested to keep the Great Lakes oil pipeline open across the border.
Canada is struggling to keep the cross-border pipeline open against the state of Michigan as it seems at odds with the oil industries of the two countries to step up their joint response to climate change. The US and Canada must work together to support their oil and gas fields, setting a clear strategy for the ultimate movement away from fossil fuels for meaningful policy change towards clean energy.
It is important to remember that the US relies too heavily on Canada for its crude oil imports, which consume about 3.7 million barrels per day, or about 80% of Canada’s crude production.
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According to the governor of Michigan, Line 5 will be closed by May 13, to eliminate the risk of a major leak. 540,000 bpd of oil and natural gas liquids pass through this line, making it essential for oil transportation between the two countries. However, the 70-year-old pipeline presents extreme environmental risks due to its age.
The pipeline currently supplies energy to Michigan, Ontario and Quebec with an area of about 40 million people, meaning the disruption due to this closure will be significant.
It is the second major pipeline that has prompted controversy between the US and Canada since President Biden came to office earlier this year. The Keystone XL pipeline project was to be canceled in January 1. The pipeline was expected to transport 800,000 bpd of crude between Alberta and refineries in the US.
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Prime Minister Justin Trudeau expressed disappointment in the decision and Alberta Premier Jason Kenny called the decision a “Punch punch” And a “Insult”; Threat of legal action to recover $ 1.5 billion investment by Alberta for the project.
A significant proportion of jobs were lost in relation to the cancellation of Keystone, and the closure of Line 5 poses further threat to Canada’s oil and gas industry.
Officials on both sides have formally discussed the possible dismantling of the pipeline for months, mostly in joint negotiations on climate change and policy cohesion. Yet Canada has received little response from the White House on the matter.
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If deemed necessary, Ottawa could go so far as to call for the closure of the 1977 Transit Pipeline Treaty that would impede the transit of Canadian oil. This will be the first case of the coming into force of this treaty.
Canadian Natural Resources Minister Seamus O’Reagan said, “We have indicated very clearly that this is unattainable” with this, “Line 5 is very different from Keystone XL and we fully support it, and we will defend it,” he said. “We made our case with Republicans as well as Democrats.”
Instead Canadian Enbridge Inc. is suggesting that the infrastructure be updated to reduce oil leakage potential by creating a tunnel under Lake Michigan. The tunnel, Enbridge claims, will make critical oil transportation infrastructure safer, in line with the idea of the Biden energy policy of ‘Build Back Better’. Enbridge is also critical of Michigan’s move because it would require thousands of long haul vehicles to transport the oil currently flowing through the pipeline.
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If the pipeline closes, it will have a detrimental effect on Canada’s oil and gas industry, which has already taken a hit from the cancellation of Keystone. It would also prevent significant oil and gas imports for the US market. The question is whether Biden will respond to Enbridge’s counter proposal to invest in existing infrastructure to reduce the risk of a spill without hindering oil transportation between the two countries.
This article was originally published on Oilprice.com