SO sick of looking at green pipe.
This week (or so) is just about (we don’t remember the precise day) the one year anniversary of the day an Enbridge ROW agent showed up at our door (yes, armed with condemnation papers– even though at that time Enbridge had not technically been given that power yet. But what did we know, all green and wet behind the ears?!). Looking back on the year that has been, we can’t say we’d want to relive it all over again. But it has had its bright spots: as we’ve said many times, we’ve gotten to know some really marvelous people. And, at the very least, it’s been awfully interesting. How much we’ve learned!
It has also, at times, been more than a little weird. In fact, we’ve got and handful of weird items to share. We’ll start with just one and save the others for later posts:
First up, some old news that we were reminded of this morning during Nate Pavlovic’s excellent Line 6B webinar. (If you missed it, the recording is available now. It’s well worth your time, especially if you’re in Indiana). Anyway, Nate included a picture of one of the oddest things that’s come out of the Marshall spill. When the Kalamazoo River reopened last summer, containers were installed along the riverbank containing wipes, so that when swimmers and boaters get out of the river they can clean the oil off of themselves and their vessels. It’s just like nature intended! Come to think of it, maybe these wipe dispensers are what those political staffers we spoke to were talking about when they told us the Kalamazoo River was cleaner than ever— a phrase that was surely picked up from Enbridge.
Sorry to post this a little late, but this webinar, conducted by our Hoosier friend Nathan Pavlovic of Save the Dunes might be of interest to some of you. We plan to attend. From Nate:
Yet another government report, released at the end of last month, has raised worrying facts about pipeline safety here and across the country. Save the Dunes and our partners are working to raise awareness about such safety concerns around Enbridge’s pipeline, which could threaten our environment and quality of life if a spill were to occur. The good news is that there are concrete steps that should be taken now to reduce the risks associated with this project. But we must ensure that these steps are implemented.
To provide the latest information and to show how you can help improve the safety of the new Enbridge pipeline, Save the Dunes will present a free webinar tomorrow, February 21stat 10AM CST. The presentation will last for approximately 45 minutes with questions to follow, and will be hosted by 219 Green Connect, a resource for NW Indiana Green News, Events & Education.
Registration for this free event is required. To register, please visit our website: Save the Dunes will Host Webinar on Tar Sands Oil Pipeline.
If you are unable to attend, Save the Dunes will post a recording later in the week. We’ll surely bring you a report as well.
This post will likely be the last in our series about the MPSC phase two proceedings. If you missed our previous installments– where we discussed the shallow analysis of their public engineer, the hard work the MPSC staff attorney performed on behalf of Enbridge, the Administrative Law Judge’s background and her Enbridge-friendly rulings, the needlessly churlish and unprofessional tone of the final ruling, and (most importantly) the way the hearings allowed Enbridge to re-write Michigan law–the please check them out. Forgive us for saying so, but we think this series is some of our best work.
In this final installment of our series, we want to consider one last reason why all Michiganders should be concerned about the agency’s toothlessness and its unwillingness even to appear to take as its primary concern protecting the public interest and the citizens of the state of Michigan. What is that reason? It’s the MPSC’s power to grant corporations like Enbridge the right of condemnation or eminent domain.
This is– or ought to be– a solemn power. Private property rights in the U.S. are nearly sacrosanct and therefore the power of government, much less of private corporations, to take or acquire the property of individual citizens should be granted as sparingly as possible and under only the strictest and most limited circumstances and conditions; it is not a power that should be conferred lightly. We suspect that nearly everyone, regardless of political party affiliation or ideological persuasion would agree with that statement.
Indeed, for that very reason, Michigan Act 16— the law (as we’ve discussed before) that grants the MPSC its authority and under which Enbridge sought the right of condemnation– does set in place a set of conditions for granting the right of eminent domain. First, the Act says this:
For the purpose of acquiring necessary right-of-ways, every such corporation, association or person is hereby granted the right of condemnation by eminent domain, and the use of the highways in this state, for the purpose of transporting petroleum by pipe lines, and the location, laying, constructing, maintaining and operations thereof; and such condemnation proceedings shall be conducted in accordance with the same procedure and in the same manner as is provided by the laws of this state for the condemnation of right-of-ways by railroad companies.
But other sections of the Act very clearly limit this power. Specifically, the Act limits this power to those entities that are “common purchasers” and “common carriers.” These two terms mean, respectively, that the entity must purchase any producer’s product (ie, oil) without favoring any one producer or discriminating against any other; and that the entity must carry or transport any product (ie, oil) without discrimination toward one producer or another. So, for instance, even if they wanted to, Enbridge could not, by law, only transport, say, heavy crude from the Alberta oil sands through their pipeline.
Actually, however, that example is not exactly apt here, since what the Michigan law addresses specifically is potential discrimination against Michigan producers. Or to put this another way, it’s not about whether Enbridge is an interstate “common carrier” (which they clearly are; they’re transporting oil, for example, from the Bakken region of North Dakota across state lines into Michigan and elsewhere), but whether they are an inTRAstate common carrier– transporting Michigan products within the state of Michigan.
And this is the problem: Enbridge’s Line 6B does NOT transport any Michigan produced products from one point in this state to another. In fact, they don’t even claim to do so. It’s just a fact. So for this reason, the intervenors in phase two argued that Enbridge does not meet the definition of an intrastate common carrier as required in Act 16. Here is what they said:
There is no evidence in the record that Enbridge is currently operating Line 6B as an intrastate common carrier. When directly asked in discovery whether Enbridge “is” an intrastate common carrier, Enbridge avoided a direct answer and instead stated: “Consistent with Act 16, Enbridge is prepared to meet its legal obligations to provide intrastate common carrier pipeline service within the State of Michigan.” See Exhibit I-2. Thus, Enbridge is clearly not claiming to be operating Line 6B to provide intrastate common carriage.
There is no evidence in the record that Enbridge Line 6B currently can accept purchased Michigan oil from producers in the vicinity of the line. In fact, when asked in discovery to identify locations in Michigan “along Line 6B where Enbridge can accept Michigan-produced crude oil and petroleum,” Enbridge did not identify one location, but simply stated that it is prepared to work with any shipper of Michigan-produced crude oil and petroleum at any safe and appropriate location along Line 6B. See Exhibit I-8. There is no evidence in the record that the new Line 6B is being designed in a manner that would enable Enbridge to transport or purchase Michigan oil. Further, Staff’s witness admitted that he had no knowledge that Enbridge had any plans to transport Michigan oil through Line 6B. (Tr 491)
In the same brief, the intervenors’ attorney (Gary Field) then goes on to explain– clearly and persuasively, in our opinion– that Act 16 was designed specifically to regulate pipeline companies within the state which function as public utilities (purchasing and carrying oil from various producers so that every company does not have to install its own pipelines and thereby minimizing the number of operating pipelines in the state, reducing dangers and disruptions). Field puts it this way:
Because oil pipelines were required by law to serve others and because they were restricted from charging rates for such service as high as they otherwise could have demanded from captive customers, such pipeline companies are public utilities. In turn, because such companies functioned as public utilities and served the public good, the Legislature deemed it appropriate to facilitate such companies’ ability to perform their public duties by permitting the Commission to grant such companies the privilege of condemnation by eminent domain.
However, Enbridge’s interpretation of Act 16 would have the Commission believe that the Act’s only purpose was to grant oil pipeline companies the privilege of condemnation. However, because Enbridge has not demonstrated that it has any plans to ever perform public utility functions under Act 16, Enbridge is not entitled to be granted, pursuant to Section 2, the right of condemnation by eminent domain. . . for Enbridge to be entitled to a grant of the right of condemnation by eminent domain, it should be required to show, at minimum, that compliance with all provisions of Act 16. . . is likely to occur in the near future.
What was Enbridge’s response to this argument? Well, they cited a 1954 case and then said, simply, “By explicitly accepting the requirements of Act 16, Enbridge has agreed to comply with all the requirements of Act 16 and this is sufficient to show compliance with the requirements of the Act.” In other words, Enbridge say that while they may not be acting as a common carrier at the moment, they promise they will if anybody asks them to in the future.”
And that response was plenty good for the MPSC. In fact, the Commission gave the intervenors’ common carrier argument very little consideration. Mainly, we think, this is because it did not fit very easily into their– er, that is, Enbridge’s– narrow three-part framework. As a result, in the Commission’s order approving the application, they bury their discussion of the common carrier argument in a footnote, which says,
Although the record is clear that Enbridge is not now an intrastate common purchaser or an intrastate common carrier, the Commission finds that there is ample evidence that Enbridge would perform such activities if called upon to do so. Indeed, Enbridge has agreed to be bound by all of the legal requirements of Act 16. See, 6 Tr 311 and 479 and Exhibit I-2.
So what’s the lesson here? Well, for one thing we thought this was one of Gary Field’s most interesting, and perhaps even compelling, arguments. That’s because it sought to give Act 16 some real bite; it presented the Commission with the opportunity to construe Michigan state law as granting them some real authority, especially in the face of Enbridge’s repeated reminders that liquids pipelines are regulated at the federal level, etc., etc. And perhaps even more interesting, the common carrier argument also sketched out, theoretically at least, a different pathway for approval, a path that did not adhere to the overly-simplistic “for or against” way of thinking about this project that has been driving us bonkers for months and one that lets Enbridge have their new pipeline without giving away the store. Just imagine for a moment this possibility:
The MPSC grants Enbridge approval for the project but does NOT grant them the power of eminent domain on the basis of the fact that they are not a common carrier. What would happen then? How would that affect the way that Enbridge deals with local municipalities? with individual landowners? What would Enbridge have had to do to acquire new easement rights or access to temporary workspace if their ROW agents could not come to your door armed with the power of condemnation? How differently would you have been treated? How much more seriously do you imagine your concerns would have been taken? How much more value would they have had to place upon your trees, your time, the disturbance to your home and your family? It’s an intriguing, dream, no?
A few follow-up items to this morning’s ruminations on the hot Keystone XL debate:
- It probably won’t come as a surprise to anyone to learn that while Michigan legislators (with only one or two notable exceptions) have been sleepy and silent about the Line 6B replacement, they did find time to pass a resolution of support for KXL. The language of the resolution is almost identical to the language of resolutions passed by a handful of other states. Which is almost identical to the language of TransCanada’s PR machinery. Which is almost identical to the language of an industry friendly non-profit organization. A lot of which, we’ll add, is almost identical to things we’ve heard Enbridge reps say on more than one occasion.
- We were also pretty interested in this article debunking TransCanada’s rosy-sounding claims about all the great jobs the project will create– claims that might well be more than a little bit overstated. We’ve hypothesized as much about Enbridge’s similarly unverifiable (and therefore dubious) claims for a while now. By our unscientific estimation (counting pumping stations), the Line 6B project will yield maybe a couple dozen permanent jobs here in Michigan. Oh, and for the record, we did locate another Michigan worker recently. That brings our unofficial count all the way up to 4 Michigan residents out of about 31 workers with whom we’ve spoken.
- Lastly, we mentioned in our earlier post that there was a robust Michigan contingent at this weekend’s D.C. rally– and that just happens to be the topic of our friend Josh Mogerman’s NRDC Switchboard blog post today. Pop on over there and check it out.
We try to stay focused and disciplined here at the Line 6B Citizens’ Blog. That is, while like most everybody else we’ve got lots of opinions about lots of things, we prefer not wander too much into areas that lie outside what we see as our primary mission here: helping landowners by keeping them informed about Line 6B matters, nudging and bugging public officials to pay more attention to the Line 6B project, and doing everything we can to try and get Enbridge to abide by their own professed values.
On the other hand, it’s not as though we aren’t keenly interested in related things: the implications of increased production and transportation of diluted bitumen, care for the environment and our natural resources, fracking, natural gas and pipeline safety across the country, property rights, U.S. energy policy, and so on.
Case in point: the controversial Keystone XL project. Like many others, Keystone has been on our mind lately, especially over the weekend while reading and hearing about the remarkable “Forward on Climate” march on Washington D.C., which was attended by some of our friends and by plenty of good folks from Michigan. Honestly, we found the fervor and excitement of that rally– observing from afar– pretty thrilling. Elizabeth Shope’s account of the rally over at the NRDC Switchboard blog nicely captures some of that thrill.
Perhaps our favorite moment came during the remarks of Chief Jacqueline Thomas of the Saik’uz First Nation in Canada who said that “Enbridge really has brought our communities together” and then, “Never in my life have I ever seen white and native work together until now [Cheers]. Thank you, Enbridge, for doing this work for me.” This captures something of our own experience: the way Enbridge also turned us into activists and brought us together with lots of wonderful people (you know who you are!) we otherwise never would have known.
Here’s the video of Chief Thomas:
Anyway, it’s not as if we haven’t been thinking about Keystone for a long time. Frankly, when it comes to Canadian oil pipeline matters, it’s hard not to. In fact, for us, the prominence of KXL has sometimes been an impediment to getting people to pay attention to Line 6B; just recall our now-infamous, painfully funny Debbie Stabenow story. At the same time, we’ve also tried to explain to everyone who will listen (not a very large population, we assure you) that anyone concerned about KXL should be equally concerned about Enbridge and Line 6B. It’s just that Enbridge has been lucky (and clever) enough to find ways to skirt the presidential permitting process.
Interestingly, the very same week as the Forward on Climate rally, came news that demonstrates yet another way that Enbridge (and Line 6B) and Keystone XL are related. Enbridge is partnering with a Texas firm to convert hundreds of miles of natural gas pipelines to carry heavy crude. The project– which just last year Michigan Governor Rick Snyder opposed–is part of Enbridge’s strategy to transport diluted bitumen down to the U.S. Gulf Coast and to New England. Line 6B, which Enbridge has always insisted has mainly to do with getting more product to the Marathon refinery in Detroit, is an important part of this strategy, as it connects to planned expansion lines headed to both the Gulf Coast and to eastern ports (see p. 11).
The reason for all of these conversions and expansions? Both Enbridge and TransCanada, the company behind KXL, are looking for ways to get the glut of Canadian tar sands oil to new markets and thereby increase its currently low price. And despite what know-nothings like Enbridge mascot Dr. Michael Milan will tell you, this Canadian oil end game, which will undoubtedly be great for Enbridge and TransCanada, is NOT likely to benefit consumers in Michigan in the form of, say, lower gas prices. Quite the contrary. And none of this, by the way– the conversions, expansions, and creative strategizing on the part of pipeline operators– helps lay to rest any lingering concerns we might have about the potential re-use of the exiting Line 6B.
As we said at the start, all of this lies a bit beyond our immediate purview; there are plenty of people who know a lot more about this stuff than we do. In fact, for some of this discussion we’re indebted to our friend Beth Wallace, who we learn from all the time, and to journalist Elana Schor, who is as smart and knowledgeable on these matters as anybody in the country. In fact, a recent excellent and provocative piece by Elana about Keystone is largely what got us thinking more about these matters. It should be required reading. Without dismissing legitimate concerns about climate change, Elana also suggests that framing opposition to Keystone XL only in those terms potentially “diverts public attention from a more immediate, less well-understood hazard: It’s not clear that federal regulators can ensure the pipeline will run safely if it is approved.” She points out further that,
killing the pipeline [KXL] will slow the march of oil-sands development for good. Resistance already has prompted oil companies to consider alternative shipment plans, from using railcars and barges to expanding Midwestern pipe networks owned by Enbridge, a TransCanada competitor. You may remember Enbridge from the costliest onshore oil spill in U.S. history, caused by a corroded Michigan pipe that leaked more than 800,000 gallons of Canadian oil in 2010. The National Transportation Safety Board found that 81 percent of that oil gushed after Enbridge employees misread alarms along their purportedly state-of-the-art system and twice tried to restart the pipeline.
Here’s where the safety risks surrounding KXL — the ones that play second fiddle to talk of oil-sands emissions — come into play. TransCanada’s first line of defense is the same technology that failed to stop the Enbridge spill, but even if it works perfectly, as much as 2 percent of the pipeline’s daily volume could escape from tiny leaks that are hard to detect. While that number sounds small, a 1-percent leak from KXL would gush as many as 8,300 barrels of oil per day and cause a spill three times the size of the Michigan disaster within a week.
We will continue to keep an eye on all of these matters and we’ll continue to try and remind people why Line 6B deserves as much attention and scrutiny as Keystone XL. We will also continue to appreciate, admire, and learn from all the good people– landowners, activists, thoughtful journalists– and organizations– like Bold Nebraska, the NRDC, and the National Wildlife Federation, and the Pipeline Safety Trust— working so hard to protect the public interest.
A busy week at our day job– papers! midterms!– prevented us from blogging last week; we’re sorry for the silence. We’re also planning to play a little catch-up around here regarding Line 6B matters over the next several days. And in case you are not caught up, we might be so bold as to remind you take a peek– and share– our recent post about the way Enbridge has effectively rewritten important Michigan state regulations. Oh, and if you didn’t see the recent unfortunate, uninformed and misleading remarks of some of Enbridge’s landowner-supporters (how disappointing that they wouldn’t support their real neighbors!), that’s worth a look, too. So is Lisa Song’s excellent recent piece over at Inside Climate News.
More immediately, we’ve got more to report about our recent chat with Kathy Thurman over at Brandon Township, where we learned some interesting things– like the fact that Enbridge has already violated the agreement they signed back in December. In the meantime, while we’re working on that and a couple of other things, here’s a slideshow of pictures we took on a quick tour through Brandon Township following our meeting with Supervisor Thurman:
The last time we saw any Enbridge representatives– Mark Curwin, Thomas Hodge, and Mike Ashton, to be precise– they were primed for action. This was at a Brandon Township Board of Trustees meeting last December where Enbridge was bound and determined to finalize an agreement with the township. The matter was clearly of the utmost urgency to Enbridge and they made it clear that there was no way they were leaving that meeting without an agreement. Waiting just one more week to sign the agreement, they said, would cause them “heartburn.”
Well, the agreement they reached that night (well, actually, they didn’t actually finalize it that night) was signed by Mark Curwin (on behalf of Enbridge) on Dec. 13 and by Supervisor Kathy Thurman on Dec. 17, making it official and legal. Why are we telling you this? Well:
Because Enbridge has already violated that agreement.
Yes, you heard that right. You see, as part of the settlement– specifically with regard to Brandon’s Woodlands Ordinance, Enbridge agreed to pay Brandon Township $10,000, a payment, the agreement states, which “shall be due and payable 21 days after the execution and delivery” of the agreement. That means that Brandon should have received this payment about the second week of January. But it’s now a month later than that and they STILL have not received that payment, even though Brandon has reminded them about it. Twice.
Now let us be clear about something here (speaking for ourselves, not Brandon Township). This isn’t about the money Enbridge promised. In fact, we’re not even suggesting that Enbridge will not eventually pay that money. We have no doubt that they will. And who knows what sort of large corporate bureaucratic accounting labyrinth something like this has to go through in order for a check to get cut somewhere up in Canada. We certainly have no idea. But that’s not the point and that’s no excuse. Rather, in addition to once again disrespecting Brandon Township, the point here is this:
When Enbridge wants what it wants, they act with tremendous haste and urgency. They turn up the pressure and throw their weight around and they get exactly what they want. They did it to the MPSC, they did it to the Brandon Trustees, they did it to us. But when it’s something of importance to others and not to them, like a paltry $10k to some tiny township, they drag their feet as if they just don’t care– even if that means failing to abide by a settlement contract they themselves have signed. We have said for months, that Enbridge makes it very difficult for anyone to believe the things that they say. And here we have a simple and clear illustration of the point. Enbridge signed an agreement that said they would do X– an agreement, mind you, that they were in a tremendous hurry to reach– and, despite the terms of that agreement, they still have not done X.
And they wonder why people don’t trust them.
Some interesting articles have appeared over the past couple days. Over at Inside Climate News, their crack staff of reporters continues to do great work. Lisa Song has two excellent articles. The first is on the MPSC’s phase two approval. A couple of choice quotes:
“I am concerned with the haste with which this project has proceeded,” said Jeff Insko, an English professor at Michigan’s Oakland University who started the Line 6B Citizens’ Blog for concerned landowners. “It’s been fast-tracked both by Enbridge and the regulatory body here in Michigan. And given Enbridge’s history in our state, it seems to me prudence and caution ought to guide us, and they haven’t.”
And this excellent bit from our friend attorney Kim Savage:
Savage once worked as an attorney for gas and electric utilities. At her old job, she said, it was a “terminable offense” to mention condemnation while negotiating for a voluntary easement. “The course Enbridge is taking is shocking, having worked on the other side,” she said.
Song’s second article is a disturbing tale of lax regulations of the pipeline industry. Check this out, for instance:
In 2010, after a massive oil spill in Michigan’s Kalamazoo River, pipeline operator Enbridge Inc. initially reported to PHMSA that the accident occurred at 11:41 a.m. on July 26, which is when the company discovered the spill. It was soon determined that the spill actually happened 17 hours earlier, but Enbridge’s subsequent reports did not correct that inaccuracy.
The timing discrepancy was highlighted last summer, when PHMSA fined Enbridge $3.7 million for breaking 22 federal rules during the Kalamazoo spill, including $100,000 for reporting the time of accident as “11:41 on July 26, 2010, when it had been clear within hours of discovery that the failure date and time was approximately 17:58 on July 25, 2010.”
Despite that fine, Enbridge did not correct the error in its most recent report to PHMSA, filed less than two months ago.
Elsewhere, apparently Enbridge is telling some tall tales about the behavior of dilbit in bodies of water–as if nobody has seen what happened in the Kalamazoo River. And the same newspaper, the Vancouver Sun has launched an excellent new series, the first part of which is an introduction to Enbridge. The portrait is not that pretty.
From over in Niles, Michigan, here’s a tv report about Line 6B’s path through a family farm.
Finally, over at MiLive, they’re hosting a live chat with Congressman Mike Rogers today at 10:30 am. Personally, we think Rogers’s silence and lack of leadership on Enbridge and Line 6B is shameful and unforgivable. Unfortunately, we’ll be on the road this morning and won’t be able to make that chat, but if you get a chance to participate and ask him why he’s been almost completely silent on an issue of great importance to his constituents, we’d love to hear a report of his response.
After a quiet stretch on the Line 6B front, things seem to have begun to rumble a bit lately– mainly because of the MPSC phase two decision. So we’ve been as busy here at the blog as we’ve been in a little while. In fact, we hope you’ve had a chance to look at our series on the MPSC proceedings, not to mention our response to some recently discovered Enbridge supporters and the surprising appearance of some outspoken state legislators.
But mostly, we hope you’ve taken a spin through our most recent post about the MPSC. Frankly, we think it may be the most important thing we’ve written here. After all, we’ve known for a long time that Enbridge more or less gets to do what it wants around here. But to think that this Canadian corporation is also effectively rewriting our state regulations!– well, that’s almost more than we can take. In fact– and we try not to ask this very often– if you’re able, please share that post with others through whatever channels (email, Facebook, that Twitter thing, online news comments sections) you see fit.
Anyway, we’re unlikely to have time to post any more this week, even though we’ve got other stuff to share with you. For one, we met with Brandon Township supervisor Kathy Thurman today (a hero and a genuine state treasure!) and learned some interesting things about their agreement with Enbridge (for a refresher, take a peek back at the series). And for another, on our way home, we spent some time snapping photos of construction activity in Brandon. So you can expect a slideshow of photos at some point as well.
Finally, we’re looking for ways to reach phase two landowners, in both Michigan and Indiana. If you know anyone along the route, please let them know about us as a resource. Enbridge ROW agents are surely going to be buzzing like bees now that they’ve got MPSC approval. We want landowners to be as informed and protected as possible during their negotiations. Plenty of good people are doing important work in terms of environmental protection in Indiana; we’d just like to see plenty of landowner protections in place as well.
It’s no secret that we’re big fans of Beth Wallace of the National Wildlife Federation; she’s one of the many fine people it’s been our good fortune to get to know since Enbridge entered our lives. Beth is a dogged advocate for Great Lakes region conservation and the protection of Michigan’s natural resources. She’s also been a thoughtful and valuable critic of the way Enbridge has conducted its business in this state in the wake of Marshall and beyond. And she has been a trusted advocate for landowners on the Line 6B project.
So here’s something cool: we all have a chance to express our gratitude to Beth for all of her hard, committed work– by helping her to win a “Telly” for the video NWF made about Beth’s pathway into activism. Just follow this link to give the video your “thumbs up.“
Phase Two Proceedings, Part 3.1
In part 3 of our current series on the MPSC, we told you a little about the career background of Theresa Sheets, the Administrative Law Judge appointed to oversee Enbridge’s phase two application. While we think that background is notable– after all, it’s not unlikely that one’s professional experiences might, inevitably, condition the way one thinks about certain matters– we never really set out to dwell on that point. We did, however, set out to dwell on the way (in our view) that Judge Sheets has done Enbridge’s bidding. In fact, we left off that post with this statement:
Enbridge attorneys have labored to limit the scope of the MPSC’s authority so severely as to cripple it– and Judge Sheets has helped them succeed.
Let us explain. If you’ve been paying attention to last week’s news about the MPSC’s approval of phase two, you may have noticed the following statement, found in the MPSC press release announcing the decision:
In approving the company’s application, the MPSC said the pipeline will serve a public need, is designed and routed in a reasonable manner, and meets or exceeds current safety and engineering standards.
Now these three simple criteria– presumably the basis upon which the MPSC made its decision– might at first glance appear to be benign and even reasonable. But the scary fact is that they are anything but benign. This framework has been, in the hands of Enbridge attorneys, a cudgel– a cudgel with which Enbridge has beaten the MPSC, Judge Sheets, and Michigan law into submission.
You see, the MPSC’s regulatory authority derives from a 1929 Michigan law known as Act 16 (we discussed this briefly in part one of this series, but regret that we were a little imprecise on this point at the time). This act describes the powers granted to the MPSC:
There is hereby granted to and vested in the Michigan public utilities commission, hereinafter styled the “commission,” the power to control, investigate and regulate every corporation, association or person, now or hereafter exercising or claiming the right to carry or transport crude oil or petroleum, or any of the products thereof, by or through pipe line or lines, for hire, compensation or otherwise, or now or hereafter exercising or claiming the right to engage in the business of piping, transporting or storing crude oil or petroleum, or any of the products thereof, or now or hereafter engaging in the business of buying, selling or dealing in crude oil or petroleum within the limits of this state…
It also grants the MPSC the power to define its own rules:
The commission is hereby authorized and empowered to make all rules, regulations, and orders, necessary to give effect to and enforce the provisions of this act.
Now, you will notice two things about these two sections of the act (for the record, they are sections 483.3 and 483.8): first, the MPSC is given pretty broad authority; they have the power to “control, investigate, and regulate” and can “make all rules, regulations, and orders” necessary to enforce the law. Secondly, you will notice that the three criteria stated in the MPSC press release are nowhere stated in Act 16 itself. Certainly, Act 16 does NOT limit the MPSC’s power to just those three items.
Why does this matter? Well, if you read through the MPSC filings, you will nevertheless see this three-part framework– public need, reasonable routing, and meeting current safety standards– again and again and again. In fact, Enbridge attorneys used this framework, successfully, to prevent all kinds of evidence and arguments from entering into the proceedings. They argued that these three things– and nothing else– are what the MPSC is charged with determining. Everything else, Enbridge argued, is “outside the scope of these proceedings.”
So where did they get this framework? It actually comes from a 2002 MPSC ruling in another pipeline application, the infamous Wolverine Pipe Line case (U-13225), which we’ve discussed before in a different context. This is what the Commission said in their order approving the Wolverine application:
Pursuant to 1929 PA 16, MCL 483.1 et seq., (Act 16) the Commission is granted the authority to control and regulate oil and petroleum pipelines. Act 16 provides the Commission with broad jurisdiction to approve the construction, maintenance, operation, and routing of pipelines delivering liquid petroleum products for public use. Generally, the Commission will grant an application pursuant to Act 16 when it finds that the applicant has demonstrated a public need for the proposed pipeline and that the proposed pipeline is designed and routed in a reasonable manner, which meets or exceeds current safety and engineering standards.
What happened is that Enbridge’s clever attorneys seized upon the last part of this statement (everything following “Generally”) and treated it as if it were clear, prescriptive, restrictive, binding law. They first floated this strategy– we haven’t been able to find such a claim in ANY case before the Commission prior to this– in an initial brief in December of 2011, during the phase one proceedings. There, Enbridge stated that:
In considering an Act 16 application, the Commission examines whether there is a need for the project and if the proposed pipeline is designed and routed in a reasonable manner, which meets or exceeds current safety and engineering standards.
And then, in a clever sleight of hand, they went on to cite the Wolverine language. They did NOT cite, it is crucial to note, anything from Act 16 itself. Rather, they simply presented the statement by the Commission in 2002 as if it were a statement defining and delimiting the Commission’s powers per se (as opposed to a statement that just sketches a rough set of guidelines).
But it is plainly not the case that this statement defines and delimits the Commission’s power or authority. For one thing, the Commission’s 2002 statement says that those three things are “generally” what they will consider. It does not say “exclusively” or “solely” or “only.” For another thing, Enbridge glosses over the earlier part of the statement, which mentions the Commission’s “broad jurisdiction.” And finally (to repeat) Act 16 itself absolutely does NOT limit the Commission to these three areas; there is no legal reason why the 2013 Commission in a completely different case should be bound or constrained by the rough– the GENERAL guidelines– set forth by the commissioners in an order in 2002.
Of course, none of this is particularly surprising or bothersome; it’s just crafty lawyers doing what crafty lawyers do. What’s bothersome is that ALJ Theresa Sheets, in an extraordinary display of credulity, swallowed this argument whole. In a Notice of Proposal for Decision filed in March of 2012 (in phase one), Judge Sheets reiterated Enbridge’s argument, citing the same statement from the Wolverine case. In fact, Sheets did Enbridge one better: first, she stated that in the 2002 case the MPSC “articulated the standard for approval of Act 16 applications.” Secondly, as if that way of putting it still weren’t restrictive enough, she then quotes the same language from the ruling– but leaves out the crucial word “generally.” Frankly, in such a carefully written document, this omission, in our view, can only be deliberate– designed further to give the 2002 MPSC statement binding authority. And indeed, Judge Sheets then goes on to use those three criteria as the test– the ONLY test– for approval of Enbridge’s application.
So, having convinced Judge Sheets of this narrow “standard” in phase one , Enbridge had no trouble returning to it repeatedly– and successfully– in phase two to prevent the intervenors from making their case. The question of local consent? Doesn’t fall under one of those three standards, so it’s outside the scope of the proceedings. The NTSB report? Doesn’t fall under one of those three standards, so it’s outside the scope of the proceedings. And so on. Of course, this narrow three-part standard is betrayed by all sorts of other things that were discussed in the proceedings, such as the matter of environmental impacts. Enbridge even had an expert witness who testified about environmental matters– a fact that just goes to show that the Commission DOES and SHOULD consider things other than standards articulated in the Wolverine case. The standard is really just in place when it serves Enbridge’s interest to invoke it.
More importantly, the insistence on a strict adherence to this standard– an adherence enforced by Judge Sheets– hamstrung everybody and prevented a complete and thorough hearing of the case– precisely what Enbridge wanted. And the worst part is that now that the standard has been invoked and endorsed (by Judge Sheets) and repeated and reiterated (in the MPSC press release, in news articles), it will surely take on even greater weight and authority; it will surely be cited in future cases before the MPSC and treated as settled law (even though it is not).
And in this way, Enbridge– a foreign corporation, mind you– has not only gotten its way in this particular case; it has also effectively rewritten Michigan law.
Back in September, we attempted to formulate the problems we have with Enbridge’s Line 6B project in a single, succinct sentence. We came up with this:
Enbridge has run roughshod over the citizens of the state of Michigan and our state elected officials have stood by idly and allowed it to happen.
A couple of weeks later, we revisited that statement in a post discussing the fruitlessness of our many attempts to convince state elected officials to take some notice. The only outspoken voice we have encountered has been Lance Enderle, who unfortunately failed to unseat Mike Rogers-– a man who has been no advocate for landowners and no critic of Enbridge.
Now, just to be clear: this is a nonpartisan blog. It’s not that we don’t have political convictions (trust us, we do!); it’s that in our view everyone, regardless of political affiliation should be concerned with property rights, with the behavior of multinational corporations, with the protection of Michigan’s priceless natural resources. And when it comes to those matters, we will call them like we see them.
And today, we are exceedingly pleased to heap some praise upon a couple of Michigan state legislators who spoke up just last week– are you ready for this??!!– criticizing, forcefully, the activities of Enbridge in our state. Honestly, we were bowled over! Who are these brave souls and what did they say? They are state representatives Tom Cochran of Mason and Kate Segal of Battle Creek, who issued a stinging press release calling for some much needed (we would even say belated!) Enbridge vigilance. Here’s Cochran:
“Enbridge has earned a bad reputation in our state by allowing its pipeline to spill onto Michigan’s soil and pollute our water for 18 hours before taking action to stop the massive spill,” Cochran said. “Enbridge spilled as much as a million gallons of oil, resulting in the evacuation of about 50 families and a $3.7 million fine from the U.S. Department of Transportation. Enbridge’s track record in Michigan has been literally disastrous.”
Not bad, that! What’s more, it appears that Cochran even read the NTSB report and understands that we cannot forget about what happened in Marshall! But then Kate Segal’s remarks might even be even better:
“When Enbridge completes this massive new project, they will have nearly tripled the capacity of their old pipeline without going through a comprehensive review process or completing critical environmental impact studies. They have rushed forward with this replacement line in a piecemeal fashion in order to circumvent federal reviews and standards,” Segal said. “Worse, Republicans in Lansing have passed laws that reduced state oversight of corporate cleanups and weakened polluter pay laws, and the Michigan Public Service Commission simply does not have the resources or power to sufficiently assess the project. This makes it harder to keep Michigan pure and clean. Rather than relaxing environmental regulations on corporations that pollute and fast-tracking projects for a company that has already irreparably damaged our pristine environment, we should be demanding tougher laws that hold big companies and special interests accountable.”
Segal hits a few of the most important points that we, and others, have been talking about for months: the haste with which the project has proceeded, its evasion of federal oversight, and the woeful state of regulations in Michigan. Our only real quibble here is that Segal is a bit too soft on the MPSC. We don’t doubt that it’s true that they need more resources. But they also clearly need more will; as far as we’ve seen– and we’ve been thinking about them a lot lately— there have been no indications that they’d like to take a tougher line on Enbridge. Quite the contrary.
Nevertheless, we applaud Kate Segal and Tom Cochran most enthusiastically. You can bet that we’ll be reaching out to them and encouraging them to take further action. We encourage you to contact them as well. The more public interest wind we can put in their sails, the more likely they’ll be to take meaningful steps to protect landowners and our natural resources.
Over at the Detroit Free Press, Eric Lawrence, one of our favorite reporters, has a follow-up piece to his article a few days ago on last week’s MPSC decision. In this one, he says that we “blasted” the MPSC. We thought our comments to Eric were rather more subdued than that. Rather, it’s in our recent post on the MPSC ruling where we really blasted them. Among the things for which we blasted them was the commission’s astonishing claim that the intervenors’ attempt to introduce the NTSB report into the proceedings was a “red herring.” How a discussion of the federal report on the incident that led to this project in the first place can be described as intentionally misleading– because to intentionally mislead is what the red herring metaphor means– is almost beyond comprehension.
Which makes the most interesting parts of today’s article (in our view)– the ones where Lawrence quotes a couple of satisfied landowners– especially illuminating. These two landowners provide perfect illustrations of real red herrings.
First up is “Chip Rascher of Oakland County’s Brandon Township.” Chip “said he is pleased the project was approved.” Chip goes on to say that:
he was compensated fairly and expressed surprise that there has been so much “fussing” from some landowners. He said they should have known about the pipeline easement on their properties.
Now, let us say clearly that we’re glad Chip Rascher thinks he was compensated fairly. We’ve never doubted that plenty of landowners have had good experiences on this project. We just wish that were the case for everyone. Chip, on the other hand, seems to think that his experience somehow does stand for everyone’s, which, we are sorry to say, makes his view slightly narrow. After all, it’s really not that hard to imagine that somebody’s experience is different from your own, is it?
But that’s not the red herring part. The red herring is when Chip says that other landowners “should have known about the pipeline easement on their properties.” With all due respect to Chip, this is a pretty silly remark. Whether or not one knew about the pipeline on one’s property (and unlinke Chip we’re assuming everyone did know!) has never been the issue. That’s what makes his statement misleading. We have never heard anyone say, “hey, stop this project! this is the first I’ve heard about a pipeline easement on my property!” Conveniently. his statement makes Chip look like he understands something all those other people do not.
But perhaps Chip Rascher has never had occasion to speak with many of the people we’ve met: people who are not unhappy because Enbridge has an easement on their property, but people who are unhappy with how Enbridge has tried to exercise (or in some cases to overstep) its easement rights. Moreover, in many, many instances Enbridge has needed to acquire new easement rights– that’s what has been a bone of contention for many landowners. More moreover, there is the sticky matter, not of easement rights, but of Enbridge’s need for and taking of “temporary workspace.” And none of this even gets to the matter of how landowners and municipalities have been treated by ROW agents, Enbridge representatives, and construction crews– that is, the way that Enbridge has conducted itself throughout this process. Over the past several months, we have documented dozens of reasons why there has been “fussing”– and not one of those reasons has to do with people not knowing about pipeline easements on their properties.
So, to pretend like all of the “fussing” has only to do with Enbridge’s existing easement rights on people’s property is profoundly misleading; it is, well, a red herring.
The second landowner Eric Lawrence quotes is Enbridge mascot, Michael Milan. You remember him: he’s the rugged fellow with the cool camouflage jacket who also just happens to be a real-life doctor— the guy Enbridge has featured in some of its ads and brochures. And what does the good doctor have to say? Well, there’s this:
“We need all the oil we can get, and the more oil delivered to refineries in the Midwest the less we pay for gasoline,” he said, noting the new pipeline will be an asset. “The quicker we get the old pipe out of commission, the less likely we are to have any more spills.”
On the first point here, Milan is just plain wrong. Neither Enbridge nor Marathon– the company with the Detroit refinery where some of Enbridge’s tar sands oil will go– make any claims that this oil will reduce gas prices. In fact, here is what Marathon says in the FAQ at their “Heavy Oil Upgrade Project” website on that very point:
Will this result in lower prices for gasoline and other petroleum products from the refinery?
We cannot predict the price of gasoline or other petroleum products. Gas prices are determined by a variety of market factors. However, this project will help secure the supply of petroleum products for the state of Michigan by offering an alternate supply source (Canada) whose continuity is not impacted by the weather issues that affect the U.S. Gulf Coast.
But being wrong is not a red herring; it’s just being wrong. It’s Milan’s second statement that gets us closer to the red herring. We should note first of all that Enbridge asserts that the old pipeline is not really at risk of any more spills. If it were, one would assume that it wouldn’t currently be in use (and it is currently in use!). Rather, Enbridge just states that the new pipeline will allow them to increase capacity– a a claim we certainly do not dispute. Enbridge also says the new pipe will be safer– another point which nobody disputes. After all, compared to a 40 year old pipe, how could it not be safer? So, one point here is that Michael Milan, while he might be a good “face” for Enbridge, what with his medical degree and his hunting gear, doesn’t seem to have a terribly firm grasp of the basic facts of this project.
But what’s really misleading here is the way that Milan’s comments– he describes himself as a “supporter of the project”– imply that other people are “opponents” of the project. But as we have stated time and time and time again, we do NOT oppose the replacement of Line 6B. We don’t know anybody who is against Enbridge getting a new pipeline. To suggest otherwise in the face of repeated clear and unequivocal statements to the contrary (Beth Wallace of the NWF was crystal clear about this recently in the San Francisco Chronicle) is either just obtuse or intentionally misleading– a red herring.
Last week’s MPSC ruling– which we’ve already discussed at length— has received plenty of press, though not much of it is particularly detailed. We already linked to Eric Lawrence’s article in the Detroit Free Press (Lawrence understand the importance of the NTSB report!). Over at MiLive, they’ve run two articles about the ruling. The first contains a couple of gems from our old friend Jason Manshum. There’s the familiar condescending Enbridge chestnut about how people use petroleum products in their everyday lives:
“This is all about meeting demand in the region, specifically Michigan,” he said. “We (consumers) are using more fuel and products that come from petroleum.”
And then there’s the fuzzy, evasive claim about all the jobs this product is going to create:
The project should provide about 1,000 temporary and permanent jobs, Manshum said.
We’ve already discussed how this claim is at best disingenuous. Notice the equivocation of Manshum’s “should” there. And notice how Manshum does NOT say that these will be Michigan jobs. And notice that he says nothing about how many of those will be temporary and how many permanent.
The other MiLive article gives us a statement from an MPSC spokesperson:
“The commission took a very long and hard look at the entire record of the case, and they did determine … that the pipeline will serve a public need, that it is designed and routed in a reasonable manner, and that it meets or exceeds current safety and engineering standards,” said MPSC spokeswoman Judy Palnau.
Please take note and remember this three-part standard here. As we’ll discuss at length in the next installment of our newest series, this is very important. And the fact that the Judy Palnau has gone out of her way to emphasize it– effectively making it a talking point–only goes to show how central this framework has become for this case. Here’s the teaser: Enbridge created this framework.
In The Macomb Daily, Frank DeFrank cites the same three criteria at the end of his article. He also spoke with Armada Township supervisor John Patarek, who says that he:
has met with Enbridge officials and Paterek said company officials have communicated well with residents and township officials “so far.”
We hops that “so far” is an expression of caution, or better, of skepticism. We also hope that he’s spoken with his peer Kathy Thurman.
Beyond Michigan, the San Francisco Chronicle has a nice piece on the news. They had the good sense to call our friend Beth Wallace, who is clear, smart and on-point as always:
The National Wildlife Federation, one of the environmental groups that criticized Enbridge for the spill, said it was disappointed that the Michigan commission approved the permit. While replacing the pipeline is a good idea, the company shouldn’t have been allowed to divide the project into segments, which enabled it to avoid a more stringent federal review, said Beth Wallace, the federation’s Great Lakes community outreach adviser.
“There would have been more public input as well as a long-term environmental impact assessment” if the federal government were involved, Wallace said.
Finally, not directly related to the MPSC decision, check out one of our favorite Enbridge-made activists the irrepressible Michelle Barlond-Smith, who was up in Canada last week telling it like it is, as she always does. Go Michelle!
This morning, over our coffee and toast, we gave yesterday’s MPSC order approving Enbridge’s phase two application a thorough reading. Ordinarily, these things are, you won’t be surprised to learn, rather dry documents. But we have to say, this one is slightly less dry– mostly that’s because it adopts such a nasty and frankly unprofessional tone. To our ear, it’s as if somebody over there at the MPSC has taken offense that anyone would dare to try and raise any pesky questions that go beyond the extraordinarily narrow framework created by Enbridge and all-too-willingly adopted by ALJ Theresa Sheets (this particular point is the topic of the upcoming next installment of our latest series). The order doesn’t just disagree with the intervenors in the case; it practically scolds them for taking up the commission’s time.
After a lengthy presentation of the sequence of events in the hearing and the positions of the parties (Enbridge and the intervenors), the commissioners’ ruling begins with this cheap shot:
Many cases litigated before this Commission involve matters that are arguably close calls. This case is not one of them. Whereas the evidentiary presentations by Enbridge and the Staff were thorough and complete as discussed above, the evidentiary presentations of the pipeline’s opponents were virtually nonexistent. This introductory observation is critical because the Commission is required to base its findings on record evidence.
Now, we weren’t aware that there was a margin of victory in these things (perhaps the commission should have provided the final score!) and the purpose of this opening statement is far from clear. Its claim to the contrary, this “observation” is hardly “critical.” At best it’s gratuitous, it nearly gloats, and appears designed to do little more than rub the intervenors’ noses in the ruling.
As for the notion that “the evidentiary presentations of Enbridge and the Staff were thorough and complete,” this is absurd on its face. Sure, Enbridge presented a lot of evidence. But the Staff? As we demonstrated last week, their witness Travis Warner hardly did anything at all. Making a phone call to the Marathon refinery, looking over Enbridge-supplied maps, admitting to only having reviewed PHMSA standards “very generally” (“I’m not extremely familiar with them,” Warner stated in the record), and “rel[ying] on Enbridge’s opinion” for his own assessments hardly constitutes a “thorough and complete” presentation of evidence. Despite this, astonishingly, the rulings states (presumably with a straight face) that “The Commission finds that, in light of the Staff’s expertise, the Staff’s testimony is entitled to significant weight…” Honestly, just read Warner’s testimony and read our discussion of it. Does anybody seriously believe he brought to bear some kind of weighty expertise on this matter?!
Finally, it’s cruelly ironic to assert that the “evidentiary presentation of the pipeline’s opponents were virtually non-existent” when so much of the evidence those “opponents” tried to introduce was ruled inadmissible by Judge Sheets: the NTSB report, the matter of the state Constitution, the testimony and exhibits by Deborah Hense, to offer just a few examples.
But that’s not the worst of it. The order is especially (and needlessly) snide towards Steven Fischer. We suspect this is because he is not an attorney by profession and the MPSC’s general attitude with regard to ordinary landowners is to treat them as mere annoyances (about which, more below). This is what the order has to say about Fischer:
In reaching its determination on the public need issue, the Commission finds that it is appropriate to discount the positions taken by Mr. Fischer and the Landowner Intervenors regarding the proofs. Mr. Fischer’s arguments are mostly generalizations based not on record evidence, but on his own suppositions. As pointed out by Enbridge, such arguments are wholly inappropriate because both the Commission’s Rules of Practice and Procedure16 and the Michigan Administrative Procedures Act17 require the Commission’s decisions to be based on record evidence. Mr. Fischer offers none to support his positions.
Obviously, it is the Commission’s prerogative to disagree with Steven Fischer, but as a PUBLIC commission, it seems to us their statement of that disagreement could at least show him the respect due to someone who has worked exceedingly hard on behalf of the public. The Commission could find his arguments ultimately unpersuasive (even we didn’t always find them entirely persuasive), but still recognize that they were an important– even vital– part of process. Instead, what we have here is more nose-rubbing.
One final example of the needlessly unprofessional tone of the order, this one tucked into a footnote addressing the matter of the NTSB report:
It is abundantly clear that while the Landowner Intervenors made lofty claims of the need to review the NTSB Report so as to “present those expert witnesses on behalf of the landowners that would be very highly qualified to speak on the subject and would give your Honor, you know, both sides of the story so you can make as informed decision as possible,” [2 Tr 116] and that they demanded and received additional time to do so, in the end the Landowner Intervenors failed to submit admissible testimony from a single witness, expert or otherwise. Accordingly, the Commission finds that the NTSB Report constitutes nothing more than a red herring in this proceeding.
First, it is once again gratuitous to take such a mocking attitude (ie, “Landowner Intervenors made lofty claims”), which does little more than show a type of contempt toward landowners. Secondly, what sort of admissible testimony could the intervenors possibly have been able to produce when the subject upon which they would have been called to testify (the NTSB report) was ruled inadmissible in the proceedings? And thirdly, the statement that “the NTSB Report constitutes nothing more than a red herring in this proceeding” can only be taken as a deliberate insult, since it accuses the intervenors of some kind of cynical ploy to lead the proceedings astray (either that, or the Commission doesn’t understand what the red herring metaphor means). When the plain fact of the matter is that without Marshall– and that’s what the NTSB report is about–there would be no application U-17020 upon which the Michigan Public Service Commission could issue such a snotty, supercilious ruling in the first place.
We always knew the Commission would approve Enbridge’s application; we just didn’t know they would be so churlish about it.
Yesterday, the MPSC granted Enbridge approval for Phase Two of the project. We have the order and will report more– as we’ve already been discussing the MPSC recently— once we’ve read through it. In the meantime, here’s the Detroit Free Press story on the news. Needless to say, we are in perfect agreement with the “Enbridge critic” that Eric Lawrence quotes:
“We knew months ago that approval was inevitable. In my view, it’s unfortunate that the MPSC process so poorly serves the public, for example, by not allowing the NTSB report into the record and by making it so difficult for landowners to make themselves heard,” Insko wrote in an e-mail.