Top propane gallon seller feels pressure from state

How ironic that the state selling the most propane gallons in 2019 has arguably the greatest threat against its propane supply and distribution source.

Michigan’s No. 1 ranking for gallon sales doesn’t come as a surprise – not with its cold winters and top 10 ranking for both population and total energy consumption, per the U.S. Energy Information Administration. The state, one of five featured in this month’s Propane Fuels America series, also holds the top spot in the nation for the most residential propane consumption.

But its ongoing feud with Enbridge over the Canadian company’s Line 5 pipeline, which extends from Superior, Wisconsin, to Sarnia, Ontario, Canada – passing under Michigan’s Straits of Mackinac – has cast some doubt about the pipeline’s future. And a future without the pipeline would create serious supply uncertainty for not only Michigan but other states in the region.

According to Enbridge, Line 5 supplies 65 percent of propane demand in the Upper Peninsula and 55 percent of Michigan’s statewide propane needs. Overall, Line 5 transports up to 540,000 barrels per day of light crude oil, light synthetic crude and natural gas liquids, which are refined into propane.

The dispute dates back several years but has intensified since Michigan Gov. Gretchen Whitmer took office in 2019. Fearful of an oil spill in the Great Lakes, Whitmer has pushed to close the pipeline, and even gave Enbridge an ultimatum to stop operations by May 2021. That didn’t happen.

Enbridge has defended its safety record, even opening a federal court case against the state and proceeding with design and permit applications for the Great Lakes Tunnel, which would encase a replacement section of Line 5 below the lake bed. 

Meanwhile, Michigan’s propane industry is preparing for any outcome.

“Some members actually are reinvesting in rail spurs and other things just to have backup options in case the worst does happen and Line 5 does go offline,” says Derek Dalling, executive director of the Michigan and Ohio propane gas associations.

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