Even as President Joe Biden worked this week to shore up support for his push to invest $2 trillion in a new energy future for the United States, his administration found itself bombarded with the harsh realities of the nation’s oil-dependent present.
More than a half-dozen federal agencies scrambled to contain fallout from a cyber-attack that shut down the Colonial Pipeline, the nation’s largest petroleum products conduit, just as the start of the nation’s peak driving season approaches. Panic buying triggered gasoline shortages and price spikes all along the East Coast before Colonial restarted the line Wednesday.
Meanwhile, a legal and international conflict escalated in Michigan over Gov. Gretchen Whitmer’s ordered shutdown of Enbridge’s Line 5, a 68-year-old oil pipeline on the lakebed of the Straits of Mackinac that transports oil from Alberta, Canada’s tar sands. Another Enbridge tar sands pipeline project in Minnesota, Line 3, has become a flash point for environmental and Indigenous groups that want the Biden administration to intervene to stop construction. And a court ruling could come any day opening a new chapter in the six-year battle over the Dakota Access pipeline. Even though President Donald Trump pushed that project to completion, a court-ordered expanded environmental review is now in the hands of the Biden administration.
Throughout his campaign, Biden embraced the most ambitious climate platform ever advanced by a U.S. presidential nominee, without taking a stand on oil and gas pipeline investment. The events of the past week make clear that he won’t be able to avoid the issue, even though it threatens to divide his political coalition. Labor stayed with Biden even though he pledged to block the Keystone XL pipeline, a project they supported, but which had become emblematic of climate activists’ drive against fossil fuel expansion. But after fulfilling his Keystone pledge on his first day in office, Biden stayed away from pipelines, focusing instead on a message with appeal to both unions and environmentalists: that a transition to clean energy would be an engine of blue-collar job creation.
“They’re not focused on the supply side, as much as they are on the demand side,” said Daniel Raimi, a fellow at the Washington, D.C.-based think tank Resources for the Future. “So the policies that they have been outlining have to do with, for example, deploying more electric vehicles, which would reduce demand for oil. And so by reducing demand for oil, you’re reducing the need to build additional pipelines and operate existing ones.”
However, U.S. oil consumption is nearly back to its pre-pandemic level of 20 million barrels per day, most of it flowing at some point through the nation’s more than 190,000 miles of petroleum pipeline. More than half of that network was built before 1970. Even as Biden seeks to build an entirely new energy infrastructure, some of those pipelines are going to wear out or, as in Colonial’s case, face unexpected disruption.
“Regardless of your position on climate change,” said Raimi, “shutting down certain pipelines and doing it without planning can cause a lot of problems.”
A Partisan Divide on Infrastructure
The ransomware attack on the operator of the Colonial Pipeline forced the Biden administration to take extraordinary steps to keep petroleum products flowing, even while it was holding White House meetings with members of Congress to build support for an infrastructure plan focused on a transition from oil.
To allow for a freer flow of fuel, the administration temporarily waived environmental rules on gasoline formulations and safety limits on truck drivers’ hours of service. It exempted one company from the law barring foreign-flagged ships from moving between U.S. ports so it could deliver fuel.
Colonial, which supplies 45 percent of petroleum fuels for the East Coast, said that its pipeline operations were not breached by the ransomware attack, which the FBI traced to a cybercrime gang believed to operate out of Eastern Europe or Russia. But the company took the unprecedented step of shutting down its 5,500-mile system for six days in order to prevent migration of the ransomware variant, called Darkside, which had infected its business system. Before Colonial restarted the pipeline, gasoline prices jumped, and long lines snaked around gas stations, particularly in the Southeast.
“We know that we have gasoline, we just have to get it to the right places,” Energy Secretary Jennifer Granholm said on Tuesday. “And that’s why these next couple of days, I think, will be challenging.”
With Biden holding meetings with Congressional Republicans to talk about the possibility of a bipartisan infrastructure compromise, some GOP Senators who would be key to any deal said that the Colonial cyberattack underscored the need for investment in existing oil infrastructure.
“If Congress is serious about an infrastructure package, at front and center should be the hardening of these critical sectors, rather than progressive wish lists masquerading as infrastructure,” said Sen. Ben Sasse (R-Neb.). And Sen. Shelley Moore Capito (R-W.Va.), the highest ranking Republican on the Senate Environment and Public Works Committee, who was one of six Republicans scheduled to meet with Biden on Thursday, said she would urge the White House to prioritize cybersecurity in any new infrastructure spending.
“This incident is so emblematic of what the future could look like,” said Capito in an interview with Fox News.
But opinion is starkly divided on exactly what steps the federal government should take to better protect oil infrastructure that is owned and operated by the private sector. Richard Glick, chairman of the Federal Energy Regulatory Commission, this week called for oil, gas and hazardous liquid pipelines to be subject to the same sort of mandatory cybersecurity standards that have been in place for the electricity sector. The American Petroleum Institute, the industry’s largest trade group, is opposed to such regulations, saying that they could interfere with companies’ ability to be flexible and adapt to quickly evolving technologies.
On Wednesday, Biden issued an executive order placing new, stricter standards on cybersecurity software sold to U.S. agencies, in effect, using the purchasing power of the federal government to spur an upgrade in industry standards. And the administration is considering further action: “As we now take a deep breath and look back at Colonial—much as we’ve done for other incidents that occurred—we now will look back at that and say, ‘What more may be needed in this space?’” said a senior Biden administration official at a news briefing.
The American Petroleum Institute, for its part, used the Colonial episode to reiterate its longstanding argument that the federal government should streamline the process for permitting new pipelines to add redundancy to the nation’s fuel delivery system. Trump spent four years trying to fulfill the oil and gas industry’s pipeline wish list, but the end result was a slew of pipeline controversies that have now landed in the lap of the Biden administration.
The Line 5 Problem
A legal battle escalated this week in Michigan between Democratic Gov. Gretchen Whitmer and Calgary, Canada-based Enbridge, operator of what it says is the world’s longest and most complex crude oil and liquids transportation system. Part of the complexity is due to Enbridge’s large role in transporting heavy oil out of Alberta’s tar sands, which is far more carbon intensive than conventional oil because of the processing it requires. It also can make a mess when it spills, as Michigan learned in 2010, when an Enbridge line ruptured in a tributary of the Kalamazoo River to cause one of the largest and most costly inland oil spills in U.S. history.
Since the Kalamazoo spill, Enbridge has faced public pressure over its operations throughout the Midwest—particularly on Line 5, which lies on the lakebed of the turbulent straits that separate Lake Huron from Lake Michigan. Although Line 5 does not carry the diluted bitumen that made the Kalamazoo spill so damaging, a state review last fall found that the pipelines were vulnerable to anchor and cable strikes from nearby vessels. These had caused gaps in the line’s protective coating and dislodged critical supports, putting Enbridge in violation of its 1953 easement to cross the Great Lakes. Whitmer set a deadline of May 12 for Enbridge to shut down the line.
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Michigan and Enbridge are now in court-ordered negotiations. But Whitmer dialed up pressure this week, threatening to seize Enbridge profits for failure to comply with her order. The government of Canada called on Biden to intervene, but so far the administration is steering clear, allowing the litigation to play out.
“We don’t weigh in on that—it’s in court right now,” said Energy Secretary Granholm who, as former governor of Michigan, is familiar with the political minefield of the pipeline battle.
The immediate energy threat of a Line 5 shutdown is not that great in the United States. While it does carry 40 percent of the propane used by the 300,000 Michigan households that rely on it for home heating, an abrupt loss of that supply would be far more urgent in winter. Most of the crude that flows through Line 5 heads to a refinery in Ontario.
“Most of its oil goes from Canada to Canada by way of Michigan,” said Raimi, who is based in Ann Arbor, where he is a lecturer at the University of Michigan.
But the business and labor issues around Line 5 could be a quagmire for the Biden administration. Enbridge reached an agreement with Whitmer’s Republican predecessor, former Gov. Rick Snyder, to replace the stretch of Line 5 that crosses the Straits with a new pipeline encased in a concrete tunnel located 60 to 250 feet beneath the lakebed. Enbridge is still awaiting permits for the $500 million project, but under the deal that the company signed with Snyder, it could pull out of its agreement to build an alternative if it is forced to shut down Line 5.
“We agree with many in the environmental community that Line 5 should be replaced,” said Rich Studley, president and CEO of the Michigan Chamber of Commerce, at a briefing Wednesday after it intervened in the litigation, along with the U.S. and Canadian chambers, and those of Ohio and Wisconsin. “But to shut it down immediately is a reckless and irresponsible action.”
Labor unions that endorsed Biden and were key to his victories in Michigan and other midwestern states, like the United Steelworkers Union and Laborers International Union, strongly support both the Great Lakes Tunnel project and keeping Line 5 open. But environmental groups argue that the tunnel project won’t alleviate the risks of Line 5, and they oppose investment in new infrastructure to bring tar sands oil to markets.
Even if the Biden administration avoids taking a side in the immediate battle over Whitmer’s Line 5 shutdown order, it is likely to be forced to make a decision on the Great Lakes Tunnel, since the project will need permits from the U.S. Army Corps of Engineers.
Walking a Middle Ground
It has become increasingly clear that environmentalists are seeking a greater commitment from Biden to take action on oil and gas infrastructure, beyond the cancellation of Keystone XL, the 1,179-mile pipeline designed to send Canadian tar sands oil to Texas refineries. Biden’s rationale for that move, that it would undermine U.S. climate leadership, should apply equally to other Canadian tar sands pipelines, say activists and Indigenous groups.
“If the Biden administration wants to do anything that makes sense in Minnesota, they should build infrastructure for people, not oil pipelines,” said Winona LaDuke, executive director of the activist group, Honor the Earth, which has been fighting Enbridge’s $7.3 billion project replacing and expanding a pipeline that runs through northern Minnesota. Scores of indigenous activists have been arrested since construction began at the start of this year; the project is now half completed.
Biden’s supporters in the environmental movement are trying simultaneously to praise him for setting ambitious climate targets, while pushing him to act against pipelines. “There really is no question that the president has ambitiously committed to combat the climate crisis,” said Michael Brune, executive director of the Sierra Club, which mobilized its largest ever get-out-the-vote effort on Biden’s behalf in the 2020 election. But Brune said, “Stopping Line 3, the tar sands pipeline, is a non-negotiable part of keeping that promise.”
So far, Biden has sought to walk a middle ground on pipelines, while pushing for the kind of transformative change that would make them obsolete. “We obviously are all in on making sure that we meet the President’s goals of getting to 100 percent clean electricity by 2035 and zero carbon emissions by 2050,” said Granholm at a briefing this week on the Colonial pipeline shutdown. “And, you know, if you drive an electric car, this would not be affecting you, clearly.”
But the Biden administration disappointed environmentalists in April when it announced it would not take immediate action to shut down the Dakota Access Pipeline while the government conducts a court-ordered expanded review of its environmental impacts. A federal judge is expected to rule soon on whether to order such a shutdown, in light of an appeals court ruling affirming his earlier decision that Dakota Access was operating without a legal federal permit to cross beneath Lake Oahe, a dammed section of the Missouri River in North Dakota.
Dakota Access has been transporting crude near the Standing Rock Sioux Tribe reservation since 2017, when Trump allowed construction to go forward without the environmental review. The Sioux protest has inspired political activism, and possibly a new era in the climate battle. Rep. Alexandria Ocasio-Cortez (D-N.Y.), co-author of the Green New Deal, has said it was on a visit to the tribe’s North Dakota encampment in 2016 that she decided to set out on the path that landed her in Congress two years later.
“The battles over pipelines have become these kind of touchstone climate policy debates,” said Raimi. “They have a lot of symbolic value.”
What they symbolize, however, is also the central challenge facing the Biden administration: the nation’s dependence on oil for 91 percent of its transportation fuel.
“We’re consuming more natural gas than we ever have, and we’re consuming almost as much oil as we ever have,” said Raimi. “And that’s kind of a reality that our climate policy has to deal with, even as aggressively as we want to phase out our emissions.”