This week, we’re going to relinquish a little bit of content-control of this blog in order to bring you a new, lengthy series: real stories from real Line 6B landowners. We’re going to let landowners tell you their own stories about their experience with Enbridge in their own words, with as little editorial intrusion from us as possible. But first, we’d like to say a few words in advance just by way of introduction to the series.
One of Enbride’s favorite strategies in the face of criticism has been to pretend that those who have been outspoken are really just a handful of disgruntled, hard-to-please complainers. Either that or all the ruckus is just the predictable rumblings of some easily dismissed “special interest groups.” Over the past year, we’ve seen various iterations of this specious point– from Patrick Daniel, from Larry Springer, from Tom Hodge, and, especially, from Jason Manshum. Not long ago, for instance, Manshum stated that, “the vast majority of landowners we’ve worked with are pleased with negotiations.” Like most things that Manshum says, that statement is almost completely unverifiable, unless Enbridge is sitting on some comprehensive survey of landowner satisfaction that they aren’t sharing, a survey that we and every landowner we know was not invited to participate in (in which case it wouldn’t be comprehensive). Larry Springer’s similarly disingenuous version of the same line a few months before was his statement that “In a minority of cases, Enbridge made several attempts to negotiate in good faith but was forced to resort to the court process.” (Seriously, has Springer spent 10 minutes in Michigan the past year? Does he really have the slightest clue as to what any individual negotiations were really like? Has he ever spoken to a single landowner on the Line 6B route, even when he had the chance? Does he have even the faintest idea as to whether the things he says about landowner relations are actually true?). Anyway, for a long time we’ve thought about how useful it would be to have some actual empirical data on this question of landowner (dis)satisfaction. After all, it is theoretically possible that it would actually prove Enbridge’s point and make us look like precisely the aberrant, tiny minority of complainers Enbridge would prefer to make us out to be. On the other hand, perhaps it would demonstrate just the opposite.
We’ve taken up this discussion before. In fact, you might recall that we even wrote to Manshum himself to ask whether he had any actual data to support his claims of overwhelming landowner satisfaction. But he never replied. You see, despite his misleading title of “senior adviser of community relations,” Manshum is not really in the business of forging relations with the community. His job is really just to toss out pleasing-sounding phrases for the press. Confronted with a real member of the community seeking to have a real discussion about real, substantive matters, Manshum (like the rest of Enbridge’s pre-programmed PR soldiers) ducks and dodges and hides.
Unfortunately, we have neither the time, the expertise, nor the resources to conduct the sort of careful study, controlling for all sorts of variables– what constitutes a “vast” as opposed to a simple majority? what counts as “pleased”? what happens if you exclude landowners who live on large farms or don’t occupy their property at all? what percentage of unhappy landowners is acceptable to Enbridge? — that could be empirically useful here. What we have instead are stories, lots and lots of stories. What’s interesting about them, though, is just how similar they are. We’re willing to accept– and forgive– the occasional “honest mistake,” which is how Enbridge reps like to describe certain incidents (we’ve heard this on multiple occasions). But when the same mistake happens not just a handful of times, but repeatedly, dozens of times… well, then we think you’re no longer dealing with mistakes; you’re dealing with patterns of behavior, standard practices, systemic problems.
So here’s what we did (in, we admit, a totally unscientific manner): we contacted as many landowners along Phase One as we possibly could and we asked them to reflect a little on the past year working with Enbridge. We asked them to be honest and to tell us what they thought and how they felt about their experience, bad, good, or otherwise. We asked them to pass along our call for contributions to their neighbors and others along the route whom we might not know.
Now, you could say– and we imagine Enbridge will say– that the responses we received and will share with you come from a self-selecting group. A bunch of complainers who are drawn to a complaining blog. Maybe that’s true. But we can say with certainty that our sample is far less selective (and much larger!), not to mention far less curated and orchestrated than what you get from the Enbridge marketing department when, say, they trot out “Dr. Michael Milan,” gussy him up in some fancy camo hunting gear, and have him pose for print ad photographs. So, while admittedly, it’s hard to say just how representative the stories we’re bringing you really are, there are enough of them to suggest that this is more than an aberration. And we can say with absolute certainty that you’ll be hearing from real landowners, ordinary people, your neighbors (to use a phrase Enbridge is fond of using)– not just a bunch of people who “are never going to be happy,” not “special interest groups,” not “professional opposition,” not even people who “oppose the pipeline,” and definitely not “revolutionaries.”
Our hope is that by gathering together a collection of these stories as a critical mass, Enbridge will, for once, set aside the defensiveness and the posturing, the denial and the carefully-honed messaging and do what it has thus far been either unwilling or unable to do: take a cold, hard, sober, honest look at itself, at the conduct of its land agents and representatives and its treatment of the fine people of the great state of Michigan, then decide for itself whether they have lived up to its own professed values.
Finally, if you are a landowner and haven’t heard from us or haven’t yet contributed, but would like to. Please send your thoughts and reflections here-– as long or as short as you like; a couple of sentences or a handful of paragraphy. We will happily maintain your anonymity if you prefer; just let us know whether you’d like your name to appear. Either way, we only ask that you specify your location (city, town, or township). We’re glad to respond to any questions as well.
A couple of weeks back, we promised the launch of a new series about our experience tagging along with a pack of journalists brought together by the Institute for Journalism and Natural Resources. You really should check that link; we’re quite smitten with the work the Institute does. in our view, their model should be replicated across the country and we’re totally impressed with Dave Spratt and Adam Hinterthuer. Today, we’re happy to bring you the first installment on our day with them at their Kalamazoo River Institute.
Dave and Adam invited us, along with phase two landowner David Gallagher (we’ll more on his story in another installment), to speak to the journos about our experience with the Line 6B replacement. And one of the journalists, Mark Brooks from Earthgauge Radio up in Canada has posted audio of much of our remarks. Even better, Dave and Adam were gracious enough to let us tag along with the group for most of the day. Since this was, believe it or not, our first-ever trip to Marshall and the site of the “dilbit disaster,” we were lucky to have the NWF’s Beth Wallace as an escort. On our way to the first stop of the day– the spot where Talmadge Creek meets the Kalamazoo River– we got to see the creek for the very first time. Here it is, quite lovely:
This shot is about a mile downcreek from the rupture. The creek carried the oil, which spilled over the banks more than 10 feet on either side, another half mile to the Kalamazoo River, which is where we met up with the journalists for a canoe trip a couple of miles in length all the way to Ceresco Dam, a key cleanup site following the spill and still today. At the landing where we launched is a new park, created by Enbridge. It’s very nice, which seems like a wonderful thing until you learn that on the day of the spill, the site was home to the Jeffery family, who had been there for 53 years. The sign, which cheerfully notes that “in 2011, the property was converted into a public park to enhance the community’s experience on the Kalamazoo River,” is a disturbing example of historical erasure: it makes no mention of WHY the property “was converted” into a public park– because Enbridge’s decaying pipeline ruptured, dumping hundreds of thousands of gallons of diluted bitumen into the river and ruining the Jefferys’ property.
A bridge runs over the river at the park. If you look closely here, you can see a black line about a foot above the water; that line was left there by the oil, showing just how high the river was on the day of the spill. The line also serves, or se we thought, as another barely perceptible reminder of what happened in 2010. Of course, as with the plaque commemorating the Jeffrey property, one might never know that this is the site of one of the worst inland oil spills in U.S. history. The signs remain, but one needs an experienced semiotician to decipher them. (In our case, we had Beth Wallace and Jay Wesley of the Michigan Department of Natural Resources to give us the real story.)
And this is more or less the story of the Kalamazoo River as it currently exists. It has been scrubbed clean– washed, dredged, cleared, and restored. But it’s been scrubbed clean not just of dilbit (well, almost scrubbed clean of dilbit!). It’s also been scrubbed clean (again, almost) of why and how it was scrubbed clean. Because so much of the property along the river was purchased– by necessity– by Enbridge, there are no explicit references to the spill, its causes and its aftermath. That history is knowable only by subtle marks and traces, like the story the Jeffery family sign does not tell, like the black line left behind on the concrete bridge that only experts know about, Or by mile markers like the one below, which indicate the distance the oil flowed downriver (what do they signify to those who do not know the story of the spill?). Or by some Enbridge workers in orange vests doing who-knows-what at the river’s edge (this being a group of journalists, you can rest assured that they descended on those guys like a pack of wolves).
Just how clean has the Kalamazoo River been cleaned? Well, one experienced journalist-kayaker (not the person pictured: that’s Beth Wallace looking right at home kayaking) remarked upon how the river seemed to lack “structure.” That is, the farther you traveled along it, you had this odd feeling like the beauty of the river was somehow a little off, a little too neat, too tidy. There were no obstructions– no big rocks, no fallen trees, none of those things that a river just accumulates over the ages, the things that provide a habitat for all manner of critters: sunbathing spots for turtles, bivouacs for fish.
So what you come to realize is that the Kalamazoo River, although quite nice, is now a man-made river, an artificial river, the kind of river one might encounter at, say, Disneyland. Honestly, it put us in mind of some fancy French theorizing we read way back in graduate school. In the 1980s, a theorist by the name of Jean Baudrillard wrote a little book called Simulacra and Simulations (in French). Baudrillard’s idea was that the world we now inhabit (the “postmodern” world) is so full of copies and reproductions (you can walk the streets of New York in a Las Vegas casino; you can visit Paris by going to Disney in Florida) that we have not only lost the “real.” Reality itself now seems to imitate the copies of reality. As Baudrillard puts it, “The territory no longer precedes the map, nor does it survive it. It is nevertheless the map that precedes the territory—precession of simulacra—that engenders the territory.”
Take Talmadge Creek, for instance: one of the most striking things we learned on our trip was that in order to clean it up, Enbridge essentially had to destroy the creek. They excavated a swath thirty feet wide (the creek is maybe three or four feet wide)– creek bed, vegetation, everything. Then they basically recreated the creek. How? Well, apparently based on Google map images, making Talmadge Creek a creek that quite literally copies a map. This is a textbook example of what Baudrillard called the “hyperreal.” Talmadge Creek and the Kalamazoo River (a portion of it, anyway) are no longer “real” bodies of water. They are hyperreal. They are Enbridge’s recreations of bodies of water, corporation-created creeks and rivers that mimic real creeks and rivers. So when you walk along Talmadge Creek or you canoe the Kalamazoo, you are having an experience owned, operated, and created by Enbridge– whether you know it or not.
So while the river was, to the inexperienced eye, very clean, and while the canoe trip was quite pleasant on a beautiful May day, after thinking about all of this, after reminding ourselves of how the river came to be the river it is today, we still felt a little dirty.
Whew! The semester has finally ended, grades have been recorded, and we finally have a little time to post. To compensate for the recent lull, we’re pleased to announce the launch of a new series! This past Friday, we were fortunate to participate in an exciting program. The excellent people at the Institute for Journalism and Natural Resources were generous enough to let us tag along with their 16 (or so) Fellows– journalists from all over the country and Canada– for a portion of their Kalamazoo River Institute. Jennifer Bowman of the Battle Creek Enquirerhas a story on the Institute this morning.
Friday was devoted to the Marshall disaster and its aftermath. The journalists met and interviewed officials from the EPA, the Michigan DNR and DEQ, representatives from Enbridge (well, Jason Manshum), MSU scientist Steve Hamilton (who at this point probably knows more about cleaning up dilbit than anyone on the planet), our friends Beth Wallace from the NWF, Josh Mogerman from the NRDC (nice to finally meet him in person!), and Sue Connolly and Deb Miller. We also made new friends in fellow landowners (on phase 2) David and Karin Gallagher– we’ll bring you their grisly story in the second installment of the series– who graciously invited all of the Institute participants to their home.
One of the highlights of the day was a canoe trip along a two-mile stretch of the Kalamazoo River, following the path of the oil. Although there’s more to be done, the good news is that the river is bouncing back and it really is quite beautiful. Here’s a shot:
In all, it was a terrific experience and we’re deeply grateful to Dave Spratt and Adam Hinterthuer from IJNR for letting us tag along and speak to the journalists. We met lots of smart, interesting people– and we’re looking forward to seeing what kinds of stories the fellows produce. But as we wait, we plan to do some ruminating of our own on the experience in a few installments. In the meantime, here’s a video from the Battle Creek Enquirer taken at Dave Gallagher’s house. If you watch closely, you might even catch us in a brief (but silent) cameo!
Well, this one’s hard to resist: the debate up in Canada over Enbridge’s Northern Gateway project– basically, Canada’s version of Keystone XL– continues. And just last week, in testimony before the Canadian Joint Review Panel, an industry “consultant” named John Thompson offered some pretty novel testimony. You see, it turns out that oil spills have a way of kind of correcting themselves because they are actually economically beneficial.
Seriously. Citing the famous 1989 Exxon Valdez spill, Thompson goes on:
Although a spill could have a big impact on the fishery, Thompson said compensation and other opportunities – such as working on clean up crews – will ensure people don’t lose any income. He said the compensation packages would not just go to those catching the fish but also people working in processing industries.
“The net result of these whole compensation schemes is the idea that at the end of the day, nobody is any worse off than they were beforehand,” he said. “So what you would see is that the income levels would remain the same, the source of the income would differ. Instead of getting it directly from sales of product, it would be through the income compensation.”
I assume this sort of thing applies to Marshall, Michigan as well. Nobody there is “any worse off than they were before.” Right?
About a week ago, we launched a playful new series of strange items we’ve encountered recently. We kicked things off with a picture of the convenient wipes that are now available along the Kalamazoo River for cleaning the oil off of your skin and boat– such a thoughtful amenity!
Today’s item is weird in a totally different way. Since we began writing this blog and reaching out to landowners about eight months ago, we’ve met lots of wonderful, fascinating people and have experienced and done all sorts of things we never really imagined ourselves doing– some of them not that strange, like attending and speaking up at local township meetings; and some of them rather surreal, like eating midnight beignets at Cafe du Monde in New Orleans with oil pipeline executives (and various other eccentrics, like this guy).
But even that doesn’t compare to what we’ll be doing this week, along with two of our very favorite people we’ve met through all of this, Beth Wallace and Kim Savage. On Thursday, the three of us will be speaking at a meeting of the Michigan chapter of the International Right of Way Association. It’s true! No joke! Just look:
What will we say? We haven’t totally decided yet, but it won’t just be a repeat of our last presentation at the Pipeline Safety Trust conference. And in fact, we’re likely to say some things we’ve never even posted here. A long time ago, we made a conscious decision not to spend our time and energy on this blog beating up on ROW agents– even though we have heard plenty of stories of their bad behavior, stories that would curl your hair. And we have ourselves experienced a fair amount of unprofessional conduct and heard plenty of misinformation from them. Yet (as memory serves), we have never once called out a ROW agent by name (or even deed) here on this blog.
Partly, that’s because we do not get personal. But also it’s because Enbridge is ultimately responsible for the conduct and behavior of its ROW agents. Indeed, as far as landowners are concerned, the ROW agents that come to our houses ARE Enbridge; they are the company’s direct interface with landowners. So if and when they lie, intimidate, disrespect, misinform, misbehave, or otherwise fail to deal openly and honestly and cooperatively and protectively with and toward landowners– well, that’s Enbridge doing it– because Enbridge lets them do it.
So, it’s likely on Thursday that we’ll tell all of the ROW agents– primarily a bunch of good, honest, hardworking, professional people, we are sure– that some among them do lie, intimidate, disrespect, misinform, misbehave, or otherwise fail to deal openly and honestly and cooperatively with and toward landowners. And when they do, it reflects poorly on ROW agents in general. So perhaps their peers can help keep the bad actors in line in a way that Enbridge either can’t or won’t.
We will, of course, provide you with a full report of the proceedings.
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.
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?
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.
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.
In our latest series, we’re reporting on some of the arguments and testimony presented before the MPSC on Enbridge’s phase two application. And as we do, we’ve been thinking about and discussing how well the MPSC fulfills (what we view as) its obligations, as a state regulatory body, to the citizens of the state of Michigan. In our first installment, we introduced you to the MPSC’s public engineer Travis Warner, who (to be blunt) appears not to be working all that hard when it comes to analyzing Enbridge’s application. In our second installment, we introduced you to MPSC staff attorney Michael Orris, who does seem to be working hard– that is, working hard on behalf of Enbridge, rather than on behalf of the public that pays his salary.
So far, we’ve mostly left the Administrative Law Judge in this matter, Theresa Sheets, off the hook. But make no mistake, we’re as baffled by her willingness to accept Enbridge’s arguments (at nearly every turn) as we are by Michael Orris’s. In this our third installment, we take a closer look at Judge Sheets and one of the more troubling ways she has allowed Enbridge to frame and determine the direction of the Enbridge proceedings.
is experienced in oil and gas law, including issues of land use, negotiation of oil and gas leases, representation of clients in matters before the Michigan Department of Environmental Quality under oil and gas laws, negotiation of wind leases, and various aspects of wind farm development.
Presumably, it is this experience that got her appointed to be ALJ at the MPSC. Yet we also presume that her “oil and gas law” experience does not entail advocating on behalf of those who might somehow find themselves at odds with large oil and gas interests. Why do we so presume? Well, for one thing, because her (former?) firm:
represents a number of oil and gas producers operating within the State of Michigan. The firm is widely recognized for its expertise in oil and gas law, and has rendered legal services for the oil and gas industry for more than 30 years. Our presence in Lansing, Michigan, results in convenient access to all state regulatory agencies having jurisdiction over oil and gas operations.
And for another thing, Sheets’s Loomis profile also notes that she is (or was) a member of the Michigan Oil and Gas Association. Who are they? Well, according to their website, the MOGA:
represents the exploration, drilling, production, transportation, processing and storage of crude oil and natural gas in the State of Michigan. MOGA has nearly 1,000 members of which includes independent oil companies, major oil companies, and the exploration arms of various utility companies. . . The organization has been described as the collective voice of the petroleum industry in Michigan, speaking to the problems and issues facing the various companies involved in the states crude oil and natural gas business.
And for one more thing, her profile touts the fact that she “has lectured on leasing; title and trust ownership at conferences of the Michigan Association of Professional Landmen.” Who are they? Well, they’re a group made up of “individuals responsible for the acquisition, administration and disposition of mineral and/or surface rights for petroleum exploration and production companies…” That’s right, it’s an organization for people who work as ROW agents (you know, just like the ones so many of us have gotten to know over the past year or so). Judge Sheets is (or was) a member of that organization as well.
Now, what does all this mean? It’s certainly not terribly surprising that someone with the sort of experience Theresa Sheets has had would wind up working for a state agency ostensibly responsible for regulating the same industry clients for whom she worked. This kind of thing is totally routine– as we learned, for example, about PHMSA at the PS Trust conference last November. And, theoretically at least, we’ll even concede that it’s possible that one could spend a significant portion of one’s career advocating for a particular industry and still be impartial as a regulator of that industry.
Nevertheless, this work history gives us some pause. Does it rise to the level of a conflict of interest? We don’t know. But if nothing else, it’s safe to say that Judge Sheets has been trained to approach and think about “oil and gas law” from the industry’s point of view, not from the point of view of those who might be critical or skeptical of the claims made by that same industry, like ordinary landowners. We wonder: is it really too much to ask that those tasked with scrutinizing the claims of an oil company have some genuine experience advocating for someone other than those oil companies? Like, for example, those whom that same oil company might potentially harm or abuse?
Which brings us back to the phase two proceedings. Inexplicably, Judge Sheets has had no trouble accepting nearly every argument made by Enbridge throughout these proceedings. In fact, there are only two instances we have come across (perhaps there are others we have missed) where she has in any way contravened the claims or wishes of Enbridge: there was the moment when, at an August hearing, she stated that she believed that the state constitution required Enbridge to seek local consent before beginning construction; and there was her ruling granting intervenors additional time in order to review the just-released NTSB report.
Of course, neither the statement nor the granting of additional time has made any substantive difference since, in both cases, Judge Sheets also ruled that neither the “local consent” provision in the state constitution nor the NTSB report were relevant to the MPSC matter at hand; in fact, she has specifically excluded both from the proceedings. And this is the crucial point here: Enbridge attorneys have labored to so limit the scope of the MPSC’s authority so severely as to cripple it– and Judge Sheets has helped them succeed.
We’ll explain precisely how she has facilitated Enbridge’s strategy in a separate post (installment 3.1!), as this one has already gotten much longer than we’d planned. Stay tuned.
