CALGARY, Alberta - Enbridge Inc (ENB.TO) may be set for a bruising legal battle in Wisconsin after a Native American tribe voted against renewing land use agreements on a major crude oil pipeline, potentially shutting down a conduit that has been in operation since the 1950s, legal experts said.
The vote last week has ratcheted up tension on Enbridge, which already faces questions about the safety of the line elsewhere in the U.S. Midwest.
The decision also opened a new avenue of opposition to North American energy infrastructure, as it was a notable use of tribal authority to move against an existing pipeline. Activists have mostly concentrated on halting new pipeline construction across the United States and Canada, most notably the Standing Rock Sioux's fight against the Dakota Access line in North Dakota.
The Bad River Band decided that Enbridge should no longer be allowed to operate the Line 5 pipeline across its reservation, and is calling for the 64-year-old conduit to be removed because of concerns about potential oil spills.
Line 5 is a vital part of Enbridge's Mainline system, which transports the bulk of Canadian crude exports to the United States. The line originates in Superior, Wisconsin, and ends in Sarnia, Ontario.
The 540,000 barrel-per-day pipeline is still flowing. Spokesman Michael Barnes said Calgary-based Enbridge is reaching out to the band to restart negotiations while also evaluating its long-term strategy.
But legal experts said that if negotiations fail, Enbridge is unlikely to be able to have state or federal authorities force the band to allow Line 5 to operate, a process known as condemnation, if it is on tribal lands.
"There's not much you can do because tribes are sovereign; you cannot exercise the power to condemn," said James Freeman, a partner with law firm Zabel Freeman in Houston.
Pipeline companies and public utilities can usually take advantage of eminent domain laws that grant them the right to build projects on land that is not theirs for the greater public good. They also reach easement agreements, allowing the pipeline company the legal right to use property owned by another party for a special purpose.
Much may depend on whether the tracts in question are on tribal land or on land allotted to individual tribe members, in which case condemnation might be viable, said Jim Bowe, a partner with King & Spalding law firm in Washington, D.C.
"Enbridge has got a real challenge here," Bowe added. "If it's out of easements, the pipeline is a trespasser."
Bowe said the Bad River Band could file a lawsuit to try to have Line 5 removed or seek an injunction to force the pipeline to stop operating.
Dylan Jennings, a Bad River tribal council member, said the tribe was developing a plan of action with its legal staff and would go to court if necessary.
"We are not convinced that a 64-year-old pipeline is structurally sound enough to last even another few years and we are not prepared to leave that behind for another generation," Jennings said. "No amount of compensation or negotiation will change our minds."
The line has not leaked since it was built in 1953, according to Enbridge's website. But the tribe's concerns about the age of Line 5 echoed worries in Michigan, where in 2015 Governor Rick Snyder established a pipeline safety advisory board to address concerns that Line 5's underwater crossing in the Straits of Mackinac, connecting Lake Michigan and Lake Huron, could leak.
That followed a 2010 leak of 20,000 barrels of crude into the Kalamazoo River in Michigan from Enbridge's Line 6B, the largest onshore oil spill in U.S. history.
Michigan has ordered two independent reports, which Enbridge is contributing to the cost of, to examine the reliability of Line 5 and alternatives to the pipeline. Those reports are expected to be finished by June.
A 2015 report produced by the Michigan Petroleum Pipeline task force criticized Enbridge for lack of disclosure related to its inspections of the pipeline.