Michigan Governor Gretchen Whitmer—How Dare You!

Back in mid-November 2020 Michigan Governor, Gretchen Whitmer announced her plan to shut down Line 5 by revoking and ending a 1953 easement that allows Enbridge Energy to run a dual pipeline through the Straits of Mackinac.  Revoking that easement would mean thousands of job losses in Michigan, Ohio and Ontario and raise the price of gasoline, jet fuel and propane for citizens in those locations and elsewhere. In the case of propane many rural areas in those three locations as well as Quebec are dependent on it as a source of heat during the winter.

The fightback from Ohio, various companies and unions and of course Enbridge has been significant however from the perspective of Canada’s Justin Trudeau’s government it has been “wimpy”! Pushback from Ontario has been what most would perceive as benign! Minister of Energy, Northern Development and Mines, Greg Rickford simply claimed he was “profoundly disappointed”! 

What Minister Rickford should have done is to tell Governor Whitmer he would use his responsibility for the Ontario electricity sector to push back and advise Governor Whitmer that he would order IESO to shutdown the intertie line with Michigan.  That action would cut them off from receiving our emission free, and very cheap electricity which they enjoy buying at subsidized prices.

Thanks to my friend Scott Luft, one is able to look back to 2008 on his data (extracted from IESO) and see how much cheap surplus power we have exported and what we received in payment for it.

It should first be understood Ontario’s gas plants (and coal plants when they operated) are only called on to generate power when demand cannot be met by our cadre of nuclear, hydro and renewables (wind and solar) so surplus energy is almost always caused because demand is low but the wind is blowing and/or the sun is shining. What that infers is most of Ontario’s exported and surplus power is considered almost emissions free! Alerted to the above; if one reviews Scott Luft’s chart it is easy to calculate information Minister Rickford could use in a chat with Governor Witmer or our Prime Minister. 

He would note Ontario exported 186.6 TWh over the ten years from 2011 to 2020 and further examination would allow him to determine Michigan received approximately 50% and New York (approximately 35%).  Adding the revenue generated he would note total revenue on those sales was $4.8 billion indicating Ontario sold each kWh for 2.57 cents. Going further he would see during the same timeframe IWT generated 93.7 TWh, solar 25.8 TWh and additionally Ontarian’s were obliged to pay the cost of curtailed wind, spilled hydro and steamed-off nuclear which totaled 49.4 TWh meaning ratepayers picked up the costs.  If one adds the three together, they come to 168.9 TWh which is more than we would consume in a year (in 2020 we consumed 132.2 TWh) and is very close to what we exported to our neighbours with Michigan getting about 93 TWh at a cost to them of just under $2.3 billion whereas those same 93 TWh cost Ontarians approximately $15.5 billion.

What the foregoing implies is Ontario ratepayers subsidized our electricity exports to Michigan to the tune of $12.2 billion in contravention of the USMCA Trade Agreement which clearly states:

To not use export subsidies or World Trade Organization (WTO) special agricultural safeguards for products exported to each other’s market.”

For some reason I suspect the State of Michigan will not raise this issue with the Biden Administration as they are quite happy to take our clean subsidized electricity and avoid having to fire up their numerous coal plants to obtain what amounts to approximately 10% of their annual consumption.

In the event Minister Rickford doesn’t want to shut down the “intertie” lines (recently upgraded) that delivers cheap power to Michigan he should at the very least demand Michigan issue Ontario “carbon credits” that are salable or can be applied to offset other emissions in the province!

Hopefully Minister Rickford will recognize the costs of our electricity exports to Michigan and how they negatively affect Ontario’s ratepayers and taxpayers and will run with the foregoing suggestions to ensure Line 5 is not cancelled by Governor Whitmer!

Author: parkergallantenergyperspectivesblog

Retired international banker.

9 thoughts on “Michigan Governor Gretchen Whitmer—How Dare You!”

  1. The supply of power to Michagan needs to be on the table. We need to be prepared to play hardball and play the climate card. These global warmers are brain-dead and have no concept of reality. Secondly, we need to look at building an all Canadian pipeline, although the cost could be enormous.

    Liked by 1 person

  2. I agree that Michigan receives an inordinate benefits from the “dumped” power from Ontario, and it would give me great pleasure to see Ontario take action to retaliate against Michigan for the threatened withdrawal of theLine 5 permit. The problem, however, is that the surplus generation capacity in Ontario, and especially the unneeded wind and solar generation, is a self-inflicted wound, and the exports of power at a loss is simply a symptom of that wound. If Ontario shut down the intertie, it would still be left with the need to pay the generators for curtailment of their supply when the surpluses arise, which might be even more costly. Recall that the intertie is also important in the context of inter-regional transmission in the event of a major supply disruption, so closing the intertie might place Ontario in contravention of its obligations for reliability cooperation under NERC. I offer a different solution that lies in the hands of the federal government. In 1977, Canada and the United States signed the Transit Pipeline Treaty, which assures each country that the operation of pipelines transiting the territory of the other will not be hindered or be the subject of discriminatory regulation or taxation. The threatened action by Michigan, in my view, contravenes that treaty. The treaty recognizes the right of each party to exercise normal environmental regulation, but the action of Michigan goes far beyond normal environmental regulation. Why has the Trudeau government not defended Canada’s interests in this case?

    Liked by 3 people

    1. I didn’t know anything about the Transit Pipeline Treaty which I have now checked out. It’s amazing to me that I’d hear about it from Bob on this website rather than from our Prime Minister or one of his Ministers.

      Both aspects of the first half of Bob’s comments on the implications of taking the interconnection out of service (the need to cope with Ontario’s surpluses and either provide or obtain assistance during supply disruptions) are exactly correct. But there is another aspect to this – interconnections provide huge benefits in terms of overall system reliability and stability on an ongoing, minute-by-minute basis, not just during “major supply disruptions.”

      I have just one nit to pick with Bob – disconnecting the transmission line to take it out of service would be referred to as “opening,” not “closing.”

      Liked by 1 person

      1. I was serving in the Canadian Embassy in Washington at the time the treaty was negotiated. It was the Americans who wanted it, as they were then considering the possibility of approving a major natural gas pipeline that would connect Alaska with the lower 48 states. So, they thought they needed a treaty to protect them against hostile or discriminatory actions by Canada. As we have subsequently seen, the real threat is from unfair discrimination by American governments egged on by radical environmentalists. I am sure that Global Affairs would have considered invoking the treaty, but they know that the Trudeau government both shares the perspective of those who would restrict access to oil supplies (“to save the planet” and is completely unwilling to confront the Biden Administration for fear of sounding to “Trump-like”. So, Canadian security of energy supply interests will just be sacrificed.

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    1. No we won’t need to shut down nuclear as we have other intertie lines and could sell our surplus to other states or provinces. We could also reduce our rates which would encourage Ontario ratepayers to consume more. We could also tax wind generators for producing unneeded power in the middle of the night to the equivalent of what we pay them now to curtail. just a few of our options!

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