By Nia Williams and Rod Nickel
CALGARY, Alberta (Reuters) - The U.S. state of Michigan has filed a lawsuit asking for an Enbridge Inc oil pipeline that runs under the Straits of Mackinac in the Great Lakes to be decommissioned, Michigan's attorney general said on Thursday.
The Line 5 oil pipeline ships 540,000 barrels per day of light crude oil and propane and is a critical part of Enbridge's Mainline network, which delivers the bulk of Canadian crude exports to the United States.
Potential disruption to Line 5 adds to the Canadian oil sector's worries about transporting crude, with fierce opposition and long delays plaguing proposed expansions of other pipelines by Enbridge, TC Energy Corp and the Canadian government.
The underwater portion of Line 5 has long been a bone of contention between Enbridge and the state of Michigan, which says a leak from the twin 66-year-old pipelines would cause catastrophic environmental damage to the Great Lakes.
In the lawsuit filed in the Ingham County Circuit Court, Michigan Attorney General Dana Nessel asked the court to find that Enbridge's continued operation of the Straits pipelines under an easement granted in 1953 violates the public trust doctrine.
The lawsuit said the pipeline is a common law public nuisance and violates the Michigan Environmental Protection Act because it is likely to pollute water and hurt other natural resources. It identified an anchor strike as the most significant risk to Line 5, which runs through the straits where Lakes Huron and Michigan meet.
"The location of the pipelines...combines great ecological sensitivity with exceptional vulnerability to anchor strikes," said Nessel in a statement.
"This situation with Line 5 differs from other bodies of water where pipelines exist because the currents in the Straits of Mackinac are complex, variable, and remarkably fast and strong."
The lawsuit seeks a court order to shut down and decommission the Straits pipelines as soon as possible after a reasonable notice period.
Nessel also filed a motion to dismiss an Enbridge lawsuit from earlier this month, that sought to enforce an agreement made with the previous governor of Michigan. That agreement would have allowed Enbridge to build a tunnel to house the underwater pipelines and continue to operate Line 5.
Calgary, Alberta-based Enbridge said it was disappointed that Michigan had not accepted its offer to advance talks on the Straits tunnel, and would need time to fully evaluate the attorney general's filing.
"We believe the Straits tunnel is the best way to protect the community and the Great Lakes while safely meeting Michigan's energy needs," Enbridge spokesman Ryan Duffy said in a statement.
In its long period of service, there have been no known oil spills from the Straits portion of Line 5, but there was a near miss in 2018 when an anchor struck the pipeline, damaging but not rupturing it.
"We really dodged a bullet there," said Liz Kirkwood, executive director of FLOW For Love of Water, a group that aims to protect the Great Lakes, adding that powerful currents and heavy ship traffic create high risk.
"It's the worst of all possible places for an oil spill in the Great Lakes."
It is unclear if Line 5 could operate without the Straits segment. But the potential for disruption is likely to cap Enbridge's share price in the near term, said RBC analyst Robert Kwan, in a note.
The company's stock was up 0.9%.
The pipeline delivers crude to refineries including Marathon Petroleum Corp's Detroit refinery and Suncor Energy's Sarnia, Ontario facility.
(Reporting by Nia Williams in Calgary and Rod Nickel in Winnipeg; Editing by James Dalgleish and David Gregorio)