Officials in Michigan are renewing their efforts to force the shutdown of an underwater section of Enbridge Inc.'s Line 5 pipeline that runs under the Straits of Mackinac.

State Attorney General Dana Nessel plans to appeal a federal judge's decision that the legal battle over the pipeline should be heard in federal court.

A federal judge last week approved Ms. Nessel's motion asking to appeal an August ruling that the case should be heard in federal court because the state's efforts to shut the pipeline involve federal and international issues.

In her ruling, U.S. District Court Judge Janet Neff ruled that the original decision involves issues that allow for "substantial ground for difference of opinion."

The question of which court hears the case is important as legal observers believe a federal court would be more likely to rule in Enbridge's favor, while a state court may be more sympathetic to Ms. Nessel's arguments.

Judge Neff wrote that allowing the appeal now could help the case be solved more quickly than if the case were heard in federal court and Michigan then appealed and had the matter sent back to a state court.

The ruling is the latest in a long-running legal battle over the fate of the pipeline, which carries 540,000 b/d of light crude and mixed NGLs from Superior, Wis., to Sarnia, Ontario.

Michigan Gov. Gretchen Whitmer had ordered the underwater segment of the pipeline shut in May 2021, claiming Enbridge violated the terms of a state easement for that area and that the threat of a spill into the Great Lakes was too great to allow the pipeline to continue operating.

Enbridge ignored the order, claiming only federal regulators have the power to order the pipeline shut. Michigan's fight to close the line became an international issue when Canada said keeping Line 5 operating is a national priority and invoked the dispute resolution provisions of a 1977 pipeline treaty with the U.S.

Enbridge has so far been successful in its efforts to keep the case in federal court, with Judge Neff originally ruling in November 2021 in the company's favor.

Ms. Nessel then dropped that case and filed another in state court, leading to the current fight over jurisdiction.

While the Biden administration has largely kept silent on the dispute, in her original decision on the matter, Judge Neff ruled that the case raised "vitally important questions that implicate the federal regulatory scheme for pipeline safety and international affairs issues."

The judge also noted the pipeline treaty applies to the land pipelines occupy and bars public authorities not covered by the treaty from instituting measures that would interfere with pipeline operations. She also said that the federal Pipeline Safety Act prohibits states from imposing safety regulations on interstate pipeline operations.

In its filings, Enbridge argues that the latest Michigan effort to have the case heard in state court is virtually identical to the one Judge Neff has already ruled on and that Ms. Nessel now is merely focusing on technicalities on the timing of legal action.

The company said the case still raises federal and international issues best dealt with by a federal court.

"This is especially true in light of the major implications of this case for diplomatic relations between the United States and Canada," the company said in legal papers.

Gov. Whitmer and Ms. Nessel campaigned on a pledge to shut the pipeline. Enbridge is moving ahead with plans to replace the aging underwater section of the pipeline with a $500 million tunnel beneath the straits. The company says the tunnel would protect the pipeline from anchor strikes and would also serve to prevent any leaks from contaminating the Great Lakes.

Gov. Whitmer and Ms. Nessel oppose the tunnel plan.

 

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

 

--Reporting by Steve Cronin, scronin@opisnet.com ; Editing by Christie Citranglo, ccitranglo@opisnet.com

(END) Dow Jones Newswires

February 27, 2023 13:52 ET (18:52 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
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