BY BENJAMIN J. GOHS, NEWS EDITOR & CHRIS FAULKNOR, PUBLISHER
A day after Enbridge and nearly a dozen governmental agencies performed emergency oil spill training on the Mackinac Straits, its CEO spoke at Boyne Mountain.
Enbridge CEO Al Monaco, who was appointed as president of the Canada-based energy delivery giant in October 2012, was the featured speaker of a Northern Michigan Chamber Alliance breakfast on Friday Sept. 25.
“This is one of those places that really struck me as different than most places I visit,” said Monaco, a 30-year veteran of the energy industry who has been with Enbridge since 1995. “I really wasn’t prepared when I was standing on the front porch of the Grand Hotel on Mackinac Island looking out at the bridge at what was a spectacular September evening.”
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Monaco said much of his job consists of traveling to areas wherein Enbridge does business in order to better work with local communities.
“It’s our job to understand how communities see things,” he said… “To do that, we need to stand in their place.”
Monaco added, “This was all crystallized for me in the past week … talking to the residents, hearing from people from both sides of the bridge about their communities and the Great Lakes and what it means to them.”
Focusing on safety
Monaco said a big part of his job is leading his company on its number one priority of safety and environmental protection. He said he begins his meetings at Enbridge with a focus on safety.
“The purpose of these moments is to give a feel for how proactive we want our people to be around safety,” he said… “It relates to the importance of speaking up and having an atmosphere within our businesses that allows people to talk freely and raise concerns.”
Monaco discussed the 1986 Challenger space shuttle disaster and how it was a failure of the management team to listen to those working on the project about the O-ring issue that ultimately caused the shuttle to explode.
“They were so concerned about getting the shuttle launched that they missed an opportunity to listen to people who were saying to them there is an issue with the O-rings,” he said. “So, the point is that we want to provide an environment for our people at Enbridge—and I know you feel the same way about your businesses—where people feel free to raise issues that they have a concern over, and that we as management allow them to do that.”
Connecting with communities
Monaco said the need to be well-connected to the communities in which Enbridge operates is critical.
“My hope is that we can continue to earn your trust as a company that operates here,” he said. “All of that’s to say we don’t look at ourselves, necessarily, just as pipeline operators—people who build and operate projects like this—we’re proud of what we do. We’re proud of the role that we play within our economy and being part of the fabric of this state.”
Monaco added, “Engaging communities, having the opportunity to hear first-hand what’s important to you is critical to me and our company.”
Monaco said he knows there are some who have concerns with, and some who outright oppose, Enbridge.
“We’re human at our company and it’s tough to hear that criticism sometimes but what we say to our people is it’s important that we listen, that we take the time to understand what’s behind people’s concerns and then take the time to respond,” he said. “It’s why we’re sharing, frankly, a lot more information and it’s why you’re seeing a lot more of our team in your community.”
Enbridge delivers approximately 2.3 million barrels of oil across the American-Canadian border each day.
“We move over half of all Canadian exports into the United States,” said Monaco. “And, by the way, Canada is the largest source of oil imported into the United States … it’s not Saudi Arabia.”
Enbridge is also Canada’s largest natural gas distributor with over 2 million customers. Their natural gas pipes extend all the way from Canada to the Gulf Coast.
“It may come as a surprise but we are one of the largest providers of renewable energy—solar and wind energy—and we’ve invested about $4 billion,” Monaco said. “I think we all recognize that we’ve got to move toward a lower carbon footprint in North America and certainly we’re well on our way to doing our part on that.”
Enbridge has been working in Northern Michigan since 1953 when it began installing oil and natural gas pipelines across the Mackinac Straits.
Monaco said the energy Enbridge moves heats homes, powers vehicles and helps keep industry running.
“Line 5 delivers 85 percent of the propane that is used to heat homes in the U.P. and in Northern Michigan,” he said. “And, it’s an important source of energy for Marathon’s refinery in Detroit which, of course, produces gasoline that we use. It produces jet fuel that we use from time to time, and other products that are consumed here.”
A good neighbor
Monaco said the benefits of what Enbridge does are about more than just jobs but what he called the “multiplier effect.”
“It’s not just the purchases that we make in communities and all the other jobs and taxes and building that stems from that,” he said. “The taxes we pay, of course, make a contribution to the social well-being in the community, whether that’s schools, hospitals or other social programs.”
Monaco said the values of the company are focused on the safety of the community and the environment.
Monaco said Enbridge plants a tree for every tree it removes, and sets aside an acre of natural area for every acre it disturbs.
A look at Line 5
Monaco addressed the spotlight that has been on energy companies including Enbridge’s famous Line 5, which some critics would like to see shut down for what they fear could eventually cause an environmental catastrophe due to the pipeline’s age.
“We do need to acknowledge and be sensitive to people’s concerns but I want to be clear: we wouldn’t be operating this pipeline if we didn’t think it was safe,” said Monaco. “And, we are taking every measure to make sure that it’s going to stay that way.”
According to Monaco, Line 5 was built to the toughest design requirements because of the straits, and it was built by the same contractor who built the Mackinaw Bridge.
He said the pipe is the thickest pipe in Enbridge’s entire North American system.
The pipe is tested to 1,700 pounds per square inch of pressure but the line is operated between zero and 300 with last year’s average at 100.
“We monitor the system 24-7, and we can shut down a line on either side and isolate that section instantaneously,” said Monaco, who added that the pipe is inspected twice as much as required with divers and remote vehicles.
Enbridge has also recently signed an agreement with the State of Michigan to only ship light crude oil through Line 5.
Monaco said the problem with rerouting Line 5 is that it would disrupt numerous communities. He said Line 5 was built so oil would no longer be shipped by barges and tankers across the Great Lakes.
Monaco said there would be more trains, trucks and boats moving the oil in order to meet the demand if Line 5 did not exist.
“Unless we want to get off energy altogether, we need to have them,” he said. “The challenge we have is to make them as safe as we possibly can.”
Monaco also touched on the live training exercise of a mock big oil spill conducted on Thursday Sept. 24, up in the Mackinac Straits where the now famous Line 5 is located.
Line 6B oil spill
Monaco said the emphasis could be on the fact that North America could become energy self-sufficient in the near future but that he understands concerns considering Enbridge’s major oil spill several years ago.
“The other side of it is that there is public concern growing over energy development,” Monaco said. “And, I think the cause of that, if you look at the big picture, number one: people have legitimate concerns about climate change; number two: I think our industry hasn’t done itself any favors along the way.”
He added, “We’ve got some very high-profile incidents—we’ve had one of our own.”
Monaco was referring to Enbridge’s 2010 Line 6B pipeline oil spill near the town of Marshall, Michigan.
An estimated 1.1 million gallons of crude oil leaked into the Kalamazoo River and one of its tributaries.
Nearly 35 miles of the river had to be closed during the cleanup effort.
Monaco said the river is in very good shape now.
“It was difficult for the community, there’s no doubt, and it actually … shook our company as well to its roots,” he said. “Before Marshall, most people would have said we as Enbridge were one of the best, if not the best, in the liquids transportation business. People actually came to us for advice.”
He added, “But, obviously, when you have something like Marshall happen to you, you have to look really long and hard in the mirror. And, although we might have been good in the past, it was pretty clear that we weren’t good enough.”
Monaco said Enbridge has made changes to improve its operations since the incident.
Monaco said, in the past, some may have chalked such a failure up to the cost of doing business.
“We don’t accept that premise any more. We need to strive for zero incidents in our business,” he said. “Over the past four years, we have also executed the largest maintenance and integrity management program and inspection program that has ever been undertaken in the history of pipelines … globally.”
Monaco said Enbridge has enhanced its ability to monitor its systems while offering multiple layers of protection including prevention and emergency response.
The emergency response plan was practiced and studied during last week’s live pipeline spill training on the Mackinac Straits.
Developing a culture of safety-first is another goal of Enbridge’s.
Recently, that culture was put into practice when some oil was discovered near a pipeline in Missouri.
The pipelines nearby were immediately shut down and the area was inspected. The substance was found not to be oil and it was not spilled by Enbridge.
Monaco said, during the follow-up meetings, the question was asked what would have been done differently since it wasn’t really an oil spill. His answer was that nothing would be done differently because safety is the primary goal.
Improving the industry
Monaco said the energy industry as a whole needs to change its approach by improving sustainable development.
He said there are two parts to sustainable development: economic benefits and how the work is done.
“We need to balance those two,” Monaco said. “But, what we need to have is the right order. And, I think, in the past, we focused more on the economic benefits. But, what really we need to do is focus first on safety and environmental protection because, in my view from my experience, unless you convince people about that, they’re not going to listen to you about that economic benefits part of the equation.”
Monaco said Enbridge’s ability to do its job requires the public’s trust.
“Our goal is not just to meet the regulatory requirements … that’s not the goal,” he said. “The goal is to lead regulation, to exceed regulation and that essentially means being world-class… It means a relentless focus on safety.”
Boyne City Manager Michael Cain, who attended the meeting along with Boyne Area Chamber Of Commerce Executive Director Jim Baumann, Boyne City Commissioner Tom Neidhamer and Boyne City Commission Candidate Hugh Conklin, asked what the life expectancy of Line 5 is, and he also mentioned a Detroit Free Press article which states that Enbridge’s oil spills were responsible for 51 percent—$937 million worth—of the property damage in the United States between 2010 and 2014.
Monaco said he had not read the article but the cost of the Kalamazoo oil spill was nearly a billion dollars, so it was probably in the ballpark.
“With respect to age … in this case, what we look at is the fitness for purpose of the line,” Monaco said. “It’s not age-related, interestingly enough, because the steel is the steel and it really doesn’t change … if you maintain it properly. And, that’s why we’re so focused on making sure that we’re maintaining it well, we’re spending the capital, reviewing the status of the lines very frequently to see if we spot anything that gives us concern.”
Monaco said no other energy company provides the level of information to the public which Enbridge does.
Baumann asked what caused the Line 6B oil leak.
Monaco said it was due to a number of factors, the major issues being that the leak was misidentified as an air bubble in the line.
Operators shut the line down briefly but then increased pressure in the pipeline in an attempt to clear what they thought was an obstruction.
“They kept trying to start the system up again when they weren’t sure about whether or not there was a leak,” Monaco said, adding that he does not believe such an incident would happen again because Enbridge is much more safety-minded.
Monaco said there was also a mis-identification of an anomaly discovered during an inspection.
One audience member said she has been working with Enbridge and state and federal regulators and is working with a third-party trying to confirm the structural integrity and operational reliability of some of Enbridge’s pipeline.
She also said serves on a local emergency planning committee in Emmet County where she works with a lot of first responders.
She said she has consistently heard that there aren’t appropriate response capabilities to respond, particularly in Northern Michigan.
She asked Monaco if there is interest in enhancing and improving response capabilities both with equipment as well as with staffing and training.
Monaco said the issue of equipment has been on his mind.
“I think the contractors we have on our list to call on … have been developed further,” he said. “So, we’re pretty confident we can have that capability.”
Monaco also said the Sept. 24 training was more about testing the plan than actually deploying emergency assets.
“The key, to me, is that we have enough equipment but have it located in the right spot so that we can respond quickly,” he said. “But, at the end of the day, you’re not going to have everything you need everywhere so we have a plan that, if there’s an incident, we have a lot of contractors and we have our own equipment that we can draw in from other areas.”
One audience member said no one can guarantee another oil spill will not happen.
“I have to ask myself if a good neighbor could or would convince me to play Russian roulette by promising me that I need not worry when the bullet pierces my heart because emergency specialists will arrive … to stem the bleeding, remove the bullet, patch me up, have me good as new and back to normal as if nothing ever happened,” said Lynn Fraze, a wildlife photographer from Alanson.
She then asked if Enbridge had the courage to shut down Line 5.
Monaco said he could not guarantee there will never be another oil spill.
“The fact of life is there are no clear-cut guarantees,” he said. “I think your conclusion that there will be an event is something that I don’t agree with.”
Monaco added, “Just because there is a risk doesn’t mean that that will actually happen. And, our job, as providers of energy, is to make sure that we’re … doing everything we can to make sure that doesn’t happen.”
When reached for a follow-up comment after the meeting, the Boyne City Gazette asked Fraze if she felt her questions and concerns were answered.
“The two most dangerous words in the English language … are ‘trust me,’” she said. “And, I think his answer was ‘trust me.’”
The chamber alliance consists of Benzie, Cadillac, Traverse City, Charlevoix, Petoskey, Gaylord, Alpena, Marquette, Harbor Springs, Boyne, Elk Rapids, East Jordan and Manistee.
“We are a partnership collaboration of 13 communities, 13 chambers of commerce from across Northern Michigan,” said Kent Wood, Director of Government Relations with the Traverse City Area Chamber of Commerce. “That’s 13 communities from across Northern Michigan that have really banded together to work on issues especially business, economic issues.”