Terminate Line 5 before it’s too late
To the Journal editor:
The recent report from American Risk Insurance Management (10/29) provides sufficient ammunition for the governor to terminate all Line 5 agreements, regardless of pending litigation.
Last fall’s Snyder agreements with Enbridge included a new financial assurance mechanism capped at $1.878 billion to cover oil spill damages. That damage cap should have been much higher.
The 2019 MSU Richardson Study put this damage figure at $6.3 billion to $45 billion!
The American Risk Study finds that the U.S. Enbridge subsidiaries that signed the Snyder agreements, do not have the ability to pay even the lowball figure and notes that the parent company is not a party to this pledge. Enbridge’s lame PR response is that it “will take full responsibility for the cleanup …”
OK — who pays for the lost tourism jobs, health care costs, property damage and all other expenses related to a possible 2.5 million-gallon spill?
What happens if a big spill causes damage claims such that these U.S. subsidiaries file for bankruptcy. In bankruptcy, all assets are attached by the court and all promises to pay can be reduced or terminated.
Even the Enbridge PR promise that “financial assurances can be met by the parties to the agreement or their parent” cannot be enforced.
The only question for Michiganders is not “can,” but “will” their damages be paid under a self insurance mechanism which is both capped and subject to bankruptcy.
Note that the original 1953 easement (Section J) required Enbridge to indemnify and hold harmless all victims and pay all damages (no cap) through third-party sources (liability insurance, bonds or surety) which would not be affected by bankruptcy. Snyder’s sell out on these protections have now created a risk that oil spill victims will not recover their damages.