When U.S. President Joe Biden nixed Keystone XL, it was a seismic moment for both Canada and the U.S., not only because of the pipeline itself, but how would affairs be moving forward between the two countries, how would the political climate be affected, and what is to become of other projects, namely Enbridge Line 5?
A great deal of attention has shifted to Line 5.
Tensions are high, and many people are concerned about job loss, notably workers in Ontario, threatening nearly 5,000 jobs, and has potential ramifications that could affect Western Canada (where the oil comes from), Quebec, and northern U.S. states.
In November 2020, Michigan Governor Gretchen Whitmer announced a move to shut down Line 5, which has been in operations for 68 years, supplying Michigan and Ohio refineries with oil and natural gas supplies, as well as Southern Ontario, Quebec.
People in Michigan could also experience price hikes for fuel, natural gas, and propane if Line 5 is shut down, coupled with the risk of an on-land spill.
At the time of the announcement, Whitmer gave Enbridge 180 days to shut down, or May 12. Enbridge has stated they have no plans to cease operations, with a legal battle currently taking place.
There is potential for significant fuel disruptions to both Ontario and Quebec if the project is shut down, and could be a sign of the future between the neighbouring countries, signalling the U.S. being less reliant on Canadian energy, with small chances of cross-border projects being completed under the Biden administration.
Currently, the U.S. is Canada’s biggest energy customer.
Tensions on energy are high between Canada and the U.S., with provincial premiers urging the federal government to sway Biden’s opinion on not only Keystone, but other projects.
As Biden forges on with his environmental plan and focus, U.S. companies could be facing significant regulatory complications, leading to a capital exodus, potentially opening the door for an increase in market share for Canadian producers.
While investors may have potential risks, prices are rebounding, with the hope of continued need for oil and gas goods and services and growing world demand for crude.
The news of this announcement could create another situation that saw 450,000 barrels shipped to Saint John after a 12,000 km trip from British Columbia through the Panama Canal. It exacerbates a similar problem. How would people in Ontario and Quebec get their shipments?
Would there be another needless journey for oil and gas to get to people?
Canadian companies are devising contingency plans to get product to refineries with the risk of projects being halted.
As news of this project develops, it has thousands on the edge of their seat wondering how to respond and act, and thousands worried about job security, with both countries curious about the next steps to take.