Undo cross-border pipeline shutdown order, federal government's filing urges U.S. appeals court

Shutting down Line 5 would cause Canada "grave harm" and violate its treaty rights, government lawyers argued Monday as the federal government rejoined the legal fray over the controversial cross-border oil and gas pipeline.

An amicus brief filed with the U.S. Court of Appeals for the Seventh Circuit marked Ottawa's first foray into the ongoing legal dispute in Wisconsin, and its second since Michigan mounted a similar challenge in 2020.

A Wisconsin court order issued in June gave Calgary-based Enbridge Inc. just three years and not a day more to reroute the pipeline around territory belonging to the Bad River Band of Lake Superior Chippewa.

Enbridge's operations on Bad River territory "must cease" on June 16, 2026, regardless of whether the 66-kilometre detour around the reserve is complete, Wisconsin district court Judge William Conley ruled.

Both sides are now appealing that decision.

Shutdown would violate treaty: Canada

Canada has long argued that any court-ordered shutdown would violate a 1977 treaty with the U.S. designed to ensure the continuing and uninterrupted flow of energy in both directions across the border.

Conley's ruling "violates Canada's rights under the 1977 treaty; it usurps the ongoing treaty dispute resolution process between the government of Canada and the government of the United States; and it would cause grave harm to Canada and the broader public interest," the brief reads.

"The district court's shutdown injunction should be vacated, or at least substantially modified, to comply with the 1977 treaty."

The brief goes on to insist the federal government is committed to reconciliation and defending the rights of Indigenous Peoples in Canada, and "respects the rights and interests" of their counterparts in the U.S.

Canada also supports "co-operative and expeditious efforts" to reroute the pipeline away from the reservation a goal that's eminently achievable without resorting to a shutdown, it continues.

Enbridge needs only federal and state regulatory approval, as well as the pipeline's continued operation, in order to get the detour completed. But it likely also needs more time, the brief argues.

And it takes issue with Conley's suggestion in his original decision that three years would be plenty of time for the North American marketplace to adapt to the potential reality of a Line 5 shutdown.

"Respectfully, Canada considers the court's economic prediction speculative and unduly optimistic," the brief reads. "Markets rarely adapt swiftly and efficiently under conditions of grave uncertainty."

Outcome still has many unknowns

In other words, there are a lot of unknowns: the outcome of the current appeal, the potential for a settlement between the band and Enbridge, the timing of the reroute and the results of the ongoing treaty negotiations.

"Even with complete and certain information, the market could not adapt to the shutdown of Line 5 without grave harm to North American energy security and economic prosperity," the brief says.

Any alternative pipeline routes are either at or close to capacity, while shipping oil and gas by rail or by transport truck would be costly and come with myriad environmental and safety consequences, it warns.

"Canada believes that even with a certain three-year lead time, the economic impacts of a shutdown would be severe," both for fossil-fuel producers and for refineries and facilities in Central Canada and the U.S. Midwest.

Conley's ruling appeared to ignore the binding nature of international treaties, a "clear error of law," it continues.

"It is a fundamental principle that a U.S. court is obliged to give effect to a self-executing treaty that imposes limits on the actions of U.S. public authorities, including the courts themselves."

Long-running dispute

The Bad River band has been fighting Enbridge in court since 2019, saying the company lost permission to operate on the reservation in 2013. Enbridge insists a 1992 agreement with the band allowed it to keep operating.

Conley, wary of ordering an immediate shutdown, sought a compromise instead, giving Enbridge until June 2026 to complete the detour and ordering the company to share Line 5's profits with the band, starting with a $5.1 million US back payment.

Neither side was satisfied.

Three years is too long to wait, given the risk of a spill in a key Lake Superior watershed, and the financial penalty too modest to prevent Indigenous sovereignty from being further violated in the future, the band's lawyers say.

Enbridge, meanwhile, has signalled that it plans to contest Conley's interpretation of that 1992 agreement, which the company believes constituted consent to continue operating on Bad River territory through 2043.

Environmental groups call the 70-year-old pipeline a "ticking time bomb" with a dubious safety record, despite Enbridge's claims to the contrary.

The neighbouring state of Michigan, led by Attorney General Dana Nessel, has also been waging war on Line 5, fearing a leak in the Straits of Mackinac, the waterway where the pipeline crosses the Great Lakes.

Line 5 carries 540,000 barrels of oil and natural gas liquids daily across Wisconsin and Michigan to refineries in Sarnia, Ont.

Its defenders say a shutdown would cause major economic disruption across the Prairies and the U.S. Midwest, where the pipeline provides feedstock to refineries in Michigan, Ohio and Pennsylvania.

It also supplies key refining facilities in Ontario and Quebec, and is vital to the production of jet fuel for major airports on both sides of the Canada-U.S. border, including Detroit Metropolitan and Pearson International in Toronto.