Pipeline Shutdown can Push Michigan Current Gas Prices Higher

The current gasoline prices in Michigan can keep rising for the summer’s remainder in the event the federal government pushes a pipeline firm to continue shutting down a primary supply line going to the Midwest until the company proves that it can be safely operated.

The Daily Fuel Gauge Report of the AAA shows that the problems in the pipeline together with the increasing per barrel crude prices and refinery breakdowns pushed Michigan’s current gasoline price average to $3.95, a rate that is higher by 39 cents compared to the national average. Metro Detroit’s average gas price gained 13 cents at $3.99. Some areas even have gas prices over $4 per gallon.

Enbridge is the owner and operator of a 467-mile pipeline that transports crude oil from Canada to Illinois for consumers in the Midwest. It has been closed since it spilled over 1,200 barrels near Wiconsin last July 27, said the Pipeline and Hazardous Materials Safety Administration of the US DOT.

The pipeline has not been opened, resulting to a reduced supply and increased gas prices since the federal government recently announced the additional requirement that Enbridge compile a detailed plan on its restart which must be audited from a third party.

In 2010, Enbridge also spilled crude oil amounting to 840,000 gallons (20,000 barrels) in a creek close to Marshall.

Accufacts’ President Richard Kuprewicz said that regulators’ current standards were very unusual for this industry. Accufacts is a consulting firm based in Washington that focus on important energy infrastructure like pipelines. Kuprewicz estimates that the pipeline will start to operate again after a week or two.

According to a currently posted update on the website of Enbridge, the company has already passed its restart plan and another report regarding the proposed improvements in their operations. Both submissions need PHMSA’s approval before the pipeline is allowed to operate again.

By: Chris Termeer