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Canada Issues Warning To U.S. Over Oil Pipeline Shutdown Order

The federal Canadian government has warned Washington of Michigan's plan to shut down a pipeline transporting Canadian crude to U.S. refineries risks worsening bilateral relations.

In a legal filing, Ottawa said the shutting down of the Line 5 pipeline will harm relations between Canada and the United States, have a negative impact on jobs and gasoline prices, and violate a treaty from 1977, the Financial Post said.                   

Earlier this month, Canada's Natural Resources Minister Seamus O'Regan told Bloomberg that keeping Line 5 open is "nonnegotiable."

"Line 5 is very different from Keystone XL and we fully support it, and we will defend it," O'Regan said.

Michigan Governor Gretchen Whitmer and the director of the state's Department of Natural Resources revoked Enbridge's easement for the operation of the twin Line 5 pipeline last November, citing repeated violations of the easement and the need to protect the Great Lakes.

Michigan's notice required Enbridge to cease operations of the pipelines in the Straits of Mackinac by May of 2021. Ten days after the state's notice, Enbridge filed a federal complaint at a U.S. district court seeking an injunction to stop Michigan's order for closure of the Line 5 pipeline, arguing that the state's shutdown order violates U.S. federal law and the Constitution.

Today is the last day for Enbridge to stop operating the pipeline, with Governor Whitmer threatening to seize the company's profits from Line 5 if it doesn't shut it down. Enbridge, for its part, has said it would only shut down the pipeline if a court or an energy regulator order it to do so.

As per the Canadian government's statement, "This case raises concerns regarding the efficacy of the historic framework upon which the U.S.-Canada relationship has been successfully managed for generations," Reuters reports. The move by the Michigan Governor "threatens to undermine important aspects of that cooperative international relationship", the statement also said.

By Irina Slav for Oilprice.com

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