Gas price hikes are another Enbridge scare tactic ⋆
During the battle over Enbridge’s Line 5 petroleum pipeline through the Straits of Mackinac, the company and its allies have been conjuring up the specter of skyrocketing gas prices if the pipeline is shut down.
Reality tells a far different story.
On June 18, 2020, both 20-inch lines that comprise Line 5 at the Straits were shut down due to an anchor strike on the east line. On July 7, 2020, Michigan Attorney General Dana Nessel allowed the west line, which was not damaged, to resume operation. The east line did not resume operation until Sept. 10, 2020.
Source: Gas Buddy
The west line was shut down for 19 days, and the east line for 83 days. With both 20-inch lines down for 19 days — a little over 2 1/2 weeks — no crude was transported. None. The east line was down for nearly 12 weeks. The crude crossing the Straits was 50% of its normal amount during that time.
It was a real-world experiment of the effect of a permanent shutdown on gasoline prices. Still, there was no price impact.
Enbridge had warned of dire consequences. Without Line 5, “the demand for crude oil in Michigan far exceeds its ability to be supplied,” Al Monaco, the president and CEO of Enbridge, said to the Detroit Free Press in 2019. “There would be a significant impact on supply,” and “prices are going way up,” along with the volume of trucks and train cars carrying oil,” Monaco said.
If Michigan was successful in shutting down Line 5, Enbridge, the refineries, and some of the media predicted a steep price escalation within a matter of days for Michigan and Toronto. Their predictions were grossly exaggerated and proved to be incorrect. None were even close to correct.
Instead, the increase was negligible. If Line 5 were shut down again, the increase would be negligible again. Why? Large corporations never depend on a single source supplier; they have several. If one is unable to fulfill its portion of the feedstock, they turn to the others to make up for the shortfall.
There are several studies that show a minimal impact on gas prices if Enbridge were to be shut down.
Source: Gas Buddy
I conducted a study in 2020 and found If Line 5 were shut down, it would result in a .75-cents-per-gallon increase. That’s less than 1 penny per gallon.
In 2018, London Economics International issued a report for the National Wildlife Federation, “Michigan Refining Sector: Alternative to Enbridge Line 5 for Transportation.” They concluded that shutting down Line 5 would increase the cost of gasoline in Michigan by .45 to .58 cents per gallon. Again, that’s less than 1 penny per gallon.
Wisconsin Public Radio on June 8, 2022, broadcast a story, titled, “Enbridge expert says gas prices would go up a half-cent per gallon if Line 5 were shut down” based on court documents.
As David Holtz of the citizens coalition Oil and Water Don’t Mix told the in 2020, “The dire warnings about skyrocketing gas prices and long lines at the pump if Line 5 is shut down were never credible and were debunked by independent experts. Perhaps now that we have an actual Line 5 shutdown to measure the impact, Enbridge’s claims will be treated with the deep skepticism they deserve. …. Michigan needs to focus on the real threat — a Line 5 failure that devastates the Great Lakes with a catastrophic oil spill.”
We cannot believe everything we hear about skyrocketing gas prices from a company that has a vested interest in keeping the petroleum flowing — and keeping an environmentally risky pipeline operating.
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authored by Gary Street
First published at https%3A%2F%2Fmichiganadvance.com%2F2023%2F06%2F03%2Fcolumn-gas-price-hikes-are-another-enbridge-scare-tactic%2F