Following news that the state of Michigan is attempting to shut down the Great Lakes oil pipeline, Canada has begun discussions with the U.S. to keep the cross-border pipeline open. The Great Lakes pipeline is vital for supplying Canadian crude oil to the U.S., but it looks like Michigan is digging their heels in. The Biden Administration has called to enhance the United States’ response to climate change and establish a policy change towards clean energy. It would seem that the pipeline closure will directly affect the two countries’ oil industries. The U.S. currently purchases around 80% of Canada’s crude which is about 3.7 million barrels per day.
The Great Lakes pipeline transports crude between Michigan, Ontario, and Quebec. These areas are populated roughly by 40 million people. As much as 540,000-BPD of oil and natural gas liquids pass through this pipeline making it an essential oil transportation between the two countries. The disruption caused by the closure of the pipeline would be quite significant for both counties. This closure would be another blow to Canada’s oil and gas industry, which is already suffering from the cancellation of the Keystone pipeline.
Canadian Enbridge Inc. has suggested that instead of the pipeline closure, an update to the infrastructure to mitigate the potential of an oil spill would be a better solution. They also suggested that shutting down the pipeline would not be beneficial to the environment because the pipeline saves thousands of long-haul vehicles replacing the volume moved via pipeline. We will have to wait and see what happens with crude oil, disruptions, and hauling on this matter. More to be revealed, may the fourth be with us for the sake of the oil and gas industry.