http://www.mlive.com/news/grand-rapids/index.ssf/2018/05/study_puts_63_billion_price_ta.html
Study puts $6.3 billion price tag on potential Mackinac Straits oil spill
Updated May 2, 2018 at 5:31 PM; Posted May 2, 2018 at 9:15 AM
By Mark Tower
mtower@xxxxxxxxx
ST. IGNACE, MI -- A new study from a Michigan State University
researcher estimates an oil spill in the Straits of Mackinac could have
an economic impact of more than $6 billion.
The study, led by MSU professor Robert B. Richardson, was prepared for
For Love of Water (FLOW), a Traverse City-based advocacy group that has
advocated for the shutdown and decommissioning of Enbridge Energy's Line
5 oil and gas pipeline.
Read: Study completed for FLOW
The pipeline, built in 1953, runs 645 miles from Superior, Wisconsin, to
Sarnia, Canada, and transports up to 540,000 barrels of light crude oil
and natural gas liquids per day. Groups like FLOW have called for the
aging pipeline to be shut down because of the risk a spill could pose to
the Great Lakes.
FLOW Executive Director Liz Kirkwood called the new study "another
compelling reason for the state to take swift action to shut down Line 5."
"This study puts credible numbers behind what common sense tells us,
that a Line 5 spill could cause catastrophic economic impacts in
addition to environmental destruction," Kirkwood said in a statement.
The study assumes a spill of about 2.5 million gallons of crude oil,
which amounts to about 59,500 barrels, damaging about 900 miles of
shoreline. The study's authors said it is not intended to be a
"worst-case scenario," but a "reasonable case that is informed by expert
knowledge."
"The scenario reflects the real possibility of technological failure and
delay in human response," the study states. "In the context of Line 5,
the worst-case scenario may be far greater in terms of scale, scope, and
the magnitude of impacts."
Enbridge spokesperson Ryan Duffy, in a statement, called the study
"fundamentally flawed," pointing to the company's much lower estimates
for the volume of oil that could be released in the event of a spill.
"We use worst-case scenarios with realistic numbers to identify and
develop the various safety measures installed along the line," Duffy
said in a statement. "Our analysis indicates a potential worst case
discharge at the Straits of Mackinac is approximately 5,000 barrels,
which is less than one-tenth the volume assumed in this study. Automatic
shut-off valves located on either side of the Straits of Mackinac will
shut down flow of product into the line within minutes if there is a
drop in pressure."
The new study breaks down different financial impacts totaling about
$6.3 billion, though natural resource damages and restoration costs
estimated by the study only make up $697.5 million of that total. The
rest of the estimated $6.3 billion is made up of about $5.6 billion in
estimated economic impacts:
$4.8 billion in economic impact to the tourism economy
$61 million in economic impact to commercial fishing
$233 million in economic impact to municipal water systems
$485 million in economic impact to coastal property values
Richardson's study divides the 15 counties expected to suffer impacts
into two tiers. The first tier -- which includes Charlevoix, Cheboygan,
Emmet, Mackinac and Presque Isle -- are predicted to experience an
economic impact equivilent ot 60 percent in the first year after the
hypothetical spill.
Though the study's findings are based on a hypothetical, Kirkwood argues
the threat of an oil spill is very real.
She pointed to an April 1 incident in which several underwater crossings
in the Straits of Mackinac, including Line 5, sustained damage. A
lawsuit filed by Michigan Attorney General Bill Schuette claims a boat
owned by an Escanaba-based shipping company dragged its anchor through
the straits, causing the damage.
"The recent anchor strike on Line 5 should be a wake-up call that this
crippling blow to our tourism economy is not hypothetical," Kirkwood
said. "It is real and it could happen at any time."
In the wake of the April 1 incident, Enbridge has maintained the
stuctural integrity of the twin Line 5 pipes remains intact.
Recent inspections by divers and a remotely operated underwater camera
revealed "marring" on the pipes, presumably a result of the alleged
anchor strike. Previous inspections of the section of Line 5 crossing
the straits have revealed bends and deformations of the pipe and
numerous gaps in its protective coating.
The report completed for FLOW is not the first to probe the risks a
spill might pose to the Straits of Mackianc and Great Lakes as a whole.
A report on Line 5 alternatives completed last year by Canadian firm
Dynamic Risk acknowledged its model did not represent a worst-case
scenario, but estimated their "credible worst-case" oil spill from Line
5 would release about 4,500 barrels of oil and result in total cleanup
costs of about $200 million.
A 2016 "worst case" spill study by University of Michigan scientist
David Schwab, who modeled 840 different spill scenarios and concluded up
to 700 miles of Great Lakes shoreline could be oiled depending on when a
spill happened and how much was released.
Enbridge's own cleanup cost estimates for a worst-case spill from Line 5
once ranged from $450 million to $1 billion, all based on a modeled
spill of 8,583 barrels of oil.
Duffy called that volume an "old number," saying Enbridge has updated
its worst-case spill volume to about 5,000 barrels of oil.
"However, even that is an overestimate," Duffy said in an email. "It
does not take into account several important factors such as leak
location, depth of water (water pressure may prevent a continuing
release of product), and the likelihood that product would be trapped in
above the rupture location."
The cleanup after the 2010 Kalamazoo River spill along Enbridge's Line
6B -- where the company did not notice the rupture until notified by an
outside caller 17 hours later -- totaled more than $1.2 billion. In that
case, more than 843,000 gallons of crude tar sands oil, spilled into
Talmadge Creek, a tributary of the Kalamazoo River.
Duffy said Enbridge would "immediately activate containment and clean up
equipment and crews" in the event of a spill in the Straits of Mackinac.
"We appreciate and respect the efforts of all parties who are looking
out for the best interest of the Great Lakes and we continually look for
ways to make a safe pipeline safer," Duffy said in a statement. "Working
through risk scenarios, as we are doing in partnership with state and
federal regulators, is certainly part of that work."
