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Judge grants motion by state of Michigan to appeal key decision in Line 5 dispute

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By James McCarten in Washington

The U.S. judge presiding over Michigan’s bid to shut down the Line 5 pipeline has given her blessing to the state to appeal one of her key findings, breathing new life into a strategy that hinges on getting the dispute heard by a lower court.

Back in August, District Court Judge Janet Neff rejected a motion from Michigan Attorney General Dana Nessel to send the case back to state court, where Nessel has acknowledged they have a better chance of winning.

But earlier this week, Neff granted Nessel’s request to certify that August decision, clearing the way for what’s known as an interlocutory appeal — formally asking an appeals court to reverse a judge’s order before a final decision in the case has been made.

Such certifications, rare in U.S. law, must meet certain conditions, Neff wrote in a decision Tuesday: that they involve a “controlling question of law” that’s likely to generate a difference of opinion, and that an appeal could expedite a resolution.

“Having reviewed the record, the court concludes that this dispute is one of the exceptional situations that compels certification,” the order reads.

“Each of the three issues identified by (the) plaintiff involve a controlling question of law, there is substantial ground for difference of opinion, and an immediate appeal will materially advance the ultimate termination of the litigation.”

Neff has also ordered that the current case — just one of several open files involving Enbridge Inc., Line 5 and the state of Michigan — remain stayed and administratively closed until the appeal is resolved.

Michigan has been in court for years with Calgary-based Enbridge in an effort to shut down Line 5, fearing a disaster in the Straits of Mackinac, the ecologically sensitive region where the pipeline crosses the Great Lakes.

Enbridge and its allies, which include the federal Liberal government in Ottawa, insist the pipeline is safe, that planned upgrades will make it even safer, and that a shutdown would impart too great a cost for the North American economy to bear.

The legal saga, however, has been dominated almost from the start by arcane procedural questions about jurisdiction and precedent, with Tuesday’s decision likely to deepen that morass even more.

Nessel has made three central arguments: that Enbridge flouted a 30-day window to move the case to district court; that Neff relied too heavily on her own earlier decision to reject Nessel’s motion in a separate but nearly identical Line 5 case; and that the question of jurisdiction has not been properly settled.

“The attorney general believes that the federal trial court clearly erred when it refused to send the case back to state court,” Nessel’s office said in a statement. “The order allows (Nessel) to ask the federal court of appeals to step in and right this wrong.”

Environmental groups in Michigan that back the state’s efforts against Line 5 also cheered the decision.

“This ruling is good news for the Great Lakes. Enbridge’s use of the federal courts to delay the state’s ability to protect the Great Lakes is unconscionable,” National Wildlife Federation counsel Andy Buchsbaum said in a statement.

“We hope that this will get the case back on track quickly so the Great Lakes doesn’t suffer from a massive oil spill.”

Enbridge, for its part, sees things differently.

A statement from the company cited Neff’s own words from the August 2022 decision in which she accused Nessel of seeking “a race to judgment and a collision course between the state and federal forum.”

“The attorney general seeks to undermine these considerations and promote gamesmanship and forum shopping,” Enbridge said, “while ignoring the substantial federal issues that are properly decided in federal court and not state court.”

This report by The Canadian Press was first published Feb. 23, 2023.

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Alberta

Working to avoid future US tariffs, Alberta signs onto U.S. energy pact

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Louisiana Governor Jeff Landry and New Hampshire Governor Chris Sununu of the Governors’ Coalition for Energy Security

Premier Danielle Smith has joined the Governors’ Coalition for Energy Security to further support advocacy of Alberta’s energy and environmental interests with key U.S. states.

The coalition was established in September 2024 by U.S. State governors Jeff Landry (Louisiana) and Chris Sununu (New Hampshire) with the aim of ensuring energy security, lower energy costs, increased reliability, sustainable economic development and sensible management of energy resources and the environment. With 12 U.S. states already signatories to the coalition, Alberta is the first non-U.S. state to enter into this agreement.

By expanding energy ties with the U.S. and promoting cross-border energy trade and participation, Alberta is helping to build upon its North American Energy strategy. Alberta already accounts for 56 per cent of all oil imports to the U.S. – twice as much as Mexico, Saudi Arabia and Iraq combined – which is helping to drive job creation and prosperity on both sides of the border. Natural gas also plays an important role in North America’s energy mix. Alberta is the largest producer of natural gas in Canada and remains positioned to support the U.S. in filling their domestic supply gaps.

“I am honoured to join the Governors’ Coalition for Energy Security and would like to extend my sincere thanks to governors Landry and Sununu for the invitation. Alberta plays a vital role in North American energy security, serving as the largest supplier of crude oil and natural gas to the United States. With 200 billion barrels of recoverable oil, 200 trillion cubic feet of recoverable natural gas, significant natural gas liquids and ample pore space for carbon capture, Alberta’s contribution is set to grow even further as we look to work with the Trump Administration and other U.S. partners to increase our pipeline capacity to our greatest friend and ally, the United States. We are proud to collaborate with this coalition of allied states in advancing energy security, reliability and affordability for Americans and Canadians.”

Danielle Smith, Premier

“Our mission as an organization has not changed but Alberta’s welcome arrival to our group sparked a conversation about what our core mission is, and that is ensuring energy security in all its forms. Our members all share the common goal of enhancing and protecting energy options for our people and businesses, which leads to lower energy costs, increased reliability, sustainable economic development and wise management of energy resources and the environment. I welcome Premier Smith and the insights she will bring as the leader from a fellow energy-producing province, that like my state, is under a federal system of government where national imperatives are not always aligned with state or provincial interests.”

Jeff Landry, governor of Louisiana

Alberta is a global leader in emissions reduction technology and clean energy solutions. The province has captured about 14 million tonnes of carbon dioxide through carbon capture, utilization and storage technology, and has the ability to support the U.S. in developing new infrastructure and supply chains for future energy markets in the areas of hydrogen, renewables, small modular reactors and others.

Alberta is also unlocking its untapped geological potential to help meet the increasing demand for minerals – many of which are used worldwide to manufacture batteries, cell phones, energy storage cells and other products. This includes the province’s lithium sector where Alberta’s government is supporting several innovative projects to develop new ways to extract and concentrate lithium faster and with higher recovery rates that are less capital and energy intensive and have a smaller land-use footprint.

As part of this coalition, Alberta looks forward to sharing best practices with states that already have expertise in these areas.

Quick facts

  • The U.S. is Alberta’s largest trading partner, with C$188 billion in bilateral trade in 2023.
  • In 2023, energy products accounted for approximately C$133.6 billion, or more than 80 per cent of Alberta’s exports to the U.S.
  • The Governors’ Coalition for Energy Security’s 12 signatory states include Louisiana, New Hampshire, Indiana (Governor Eric Holcomb), Alabama (Governor Kay Ivey), Georgia (Governor Brian Kemp), Tennessee (Governor Bill Lee), South Dakota (Governor Kristi Noem), Mississippi (Governor Tate Reeves), Arkansas (Governor Sarah Huckabee Sanders), Oklahoma (Governor Kevin Stitt), Wyoming (Governor Mark Gordon) and Virginia (Governor Glenn Youngkin).

 

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Business

Ottawa’s emissions cap another headache for consumers and business

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From Resource Works

Ottawa’s emissions cap for oil and gas aims to cut emissions but risks raising costs for consumers and disrupting industry stability.

Ottawa has brought down a new emissions cap for the oil and gas industry, with a mandate to reduce emissions by 35 percent from 2019 levels by 2030 to support the federal government’s climate targets. While the federal government is celebrating the cap as a big step towards a more sustainable future, it is going to make life harder for consumers and businesses alike.

This cap is coming in at a time when the oil sector is finally gaining greater stability due to the expanded Trans Mountain pipeline (TMX), and the mandate would undermine that progress and press greater costs upon households and industries that are already adjusting to high inflation and uncertainty in world markets.

Now that TMX is operational, Canada’s oil producers have grown their access to international markets, most importantly in Asia and the West Coast of the United States. Much-needed price stability now exists for Western Canadian Select (WCS), cutting the discount against the U.S. West Texas Intermediate benchmark, enabling Canadian oil to compete more effectively.

Newfound stability means that Canadian consumers and businesses have benefited from slightly lower prices, and that industry has grown less dependent on a more limited domestic demand. However, Ottawa’s emissions cap does threaten this new balance, and the sector now has to deal with compliance costs that could be passed down to consumers.

In order to meet the cap’s targets, Canadian oil producers must heavily invest in carbon capture and storage (CCS) technologies, which is costly but essential. Major CCS projects include Shell’s Quest and the Alberta Carbon Trunk Line, both of which are already operational.

The Pathways Alliance is a coalition of six major oil sands companies and is preparing to invest in one of the world’s largest networks for carbon storage. These efforts are crucial for reducing emissions, despite requiring vast amounts of capital.

Those in the industry are worrying that the emissions cap will push resources away from production and, instead, towards compliance, adding costs that will be borne by fuel prices and other consumer products.

Ottawa has portrayed the cap as an essential measure for meeting the federal government’s climate goals, with Environment Minister Jonathan Wilkinson labeling it “technically achievable.” Nonetheless, industry players argue that the timeline does not align with the practicalities of scaling CCS and other strategies aimed at decarbonizing.

Strathcona Resources executive chairman Adam Waterous pointed out the “stroke-of-the-pen” risk, in which shifting political landscapes imperil ongoing investments in carbon capture. Numerous oil producers feel that without certainty in carbon price stability, Ottawa’s cap will result in an unstable business environment that will push investment away from production.

Business leaders do not share the federal government’s optimism about the cap and see it as a one-sided approach that fails to reckon with market realities. The Pathways Alliance, which includes companies like Suncor Energy and Canadian Natural Resources, has been frustrated in its multiple attempts to get federal support to fund its $16.5-billion CCS project.

Rather than imposing these new limits, energy industry advocates argue that the government should provide targeted incentives like “carbon contracts for difference” (CCfDs), which help to stabilize carbon credit prices and reduce financial risk among investors. These measures would enable the energy sector to decarbonize without putting a greater burden on consumers.

The cap’s timing also raises concerns about the Canada-U.S. relationship. Canada has traditionally been a stable supplier of energy and helps to bolster U.S. energy security. However, as the U.S. increases its reliance on Canadian oil, the cap could disrupt this trade relationship. Lowered production levels would leave the economies of both the U.S. and Canada vulnerable, potentially disrupting energy prices and supply stability.

For households across Canada, the emissions cap could mean further financial strain. The higher costs of compliance passed to oil producers will mean higher prices at the pump and more expensive heating costs at a time when Canadian consumers are already struggling financially.

Businesses will also face increasing operating costs, which will be passed down to consumers via more expensive goods and services. Furthermore, higher costs and reduced production will erode Canada’s competitive advantage in the global energy market, slowing economic growth and risking job losses in the energy sector.

So, while Ottawa can laud its emissions cap as a necessary action on the climate, the implications for consumers and businesses are tremendous. Working with industry to find pragmatic, collaborative solutions is how Ottawa can avoid creating more financial burdens for Canadians.

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