As inflation – especially in higher energy and food bills – climbs and COVID-19 endures, Americans increasingly are realizing how their everyday lives have changed. This new reality also appears to be shifting attitudes within the Biden administration and elsewhere about the need to rely on traditional energy sources for years to come and to subdue the drive to ban oil and gas exploration and oppose energy infrastructure projects.

The catalyst for changing energy attitudes is the new reality of everyday life. The pandemic has triggered significant changes in it, just as earlier seismic events like the Great Depression and the more recent Great Recession did. The deaths of over 930,000 Americans from COVID-19 by mid-February underscores the changes.

Surveys tell the story. Half of Americans now are in or near poverty, living paycheck to paycheck. The American job is in transition, spawning the Great Resignation. How we spend our time has amended as our routine was upended. Indeed, nearly 9 out of 10 of us cite at least one negative change in our lives, a Pew Center study reveals (while a smaller share an unexpected upside).

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Among the wide-ranging difficulties: Americans feel more negative about their personal relationships; their and others’ physical and mental health; their jobs and personal financial situation; and society, politics and safety precautions. More feel isolated, with one Pew study respondent admitting, “Even for an introvert, there’s such a thing as too much isolation,” and another confessing, “Mentally, I am exhausted, depressed and suffer from insomnia.”

But lately, it’s inflation that’s become increasingly worrisome, especially for those whose finances are already precarious or who live on fixed incomes whose real take-home pay has decreased. In December 2021, our country experienced its highest rate of inflation in 40 years. Our financial regulators are now admitting that this is no longer a “transitory” occurrence but will be a weight on the economy and regular people throughout 2022. Anything priced in dollars, including commodities like oil and natural gas, during periods of high inflation face an upward price trajectory.

Many older adults remember how the Great Inflation of the 1970s impaired their lives. A major report on that period described the inflationary impacts on Americans this way: It affected “nearly all aspects of everyday life — from the type of breakfast cereal they buy to how low they set their thermostats in the winter. The changes involve how they travel to work and how they rear their children, where they go on vacation, and a thousand other things.” This brings us to today’s inflationary concerns – especially over higher energy prices to heat or cool Americans’ homes or fill up their vehicles at the gas tank. Fueling these worries is the expectation from the U.S. Energy Information Administration that households could see their heating bills jump as much as 54% compared to last winter. And average retail gas prices have climbed more than 50% in the past year, averaging $3.53 a gallon for regular the week of Feb. 21 and a record $4.75 a gallon in California. Prices we’ve not seen since July of 2008 during the Great Recession.

Inflation, of course, is an added tax and households already are spending close to $175 each because of it, raising fears of protracted economic stagflation. No wonder, the latest report on consumer confidence showed, by one respected measure, a decline for the fifth month in a row in November, sliding 6.2% from October, as higher energy prices, especially worried consumers.

Indeed, they are so worried that they are less committed to combatting climate change than they have been. While 71% of Americans surveyed in late September said they are either somewhat or very concerned about climate change, 39% said they wouldn’t spend one dollar more than they already spend annually on gas or electricity to mitigate climate change’s effects. Fifty-six percent said they were unlikely to spend extra money to buy an electric vehicle to replace their gas-powered car.

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Perhaps it’s how higher energy prices change Americans’ attitudes toward climate change that is shifting the momentum in the administration and beyond by subduing talk of moving swiftly to abandon natural gas and oil as essential energy sources and to oppose energy infrastructure projects, either new or for existing pipelines.

After President Biden initially took a strong stance against fossil fuels, canceled the Keystone XL pipeline project, and delayed leasing on federal lands, the administration hasn’t opposed other key projects, such as the Line 3 replacement pipeline from Canada into the Upper Midwest as well as the Line 5 in Michigan with our current price environment. Administration officials say the president is taking a more balanced approach because our country needs oil and gas as it transitions toward renewable energy sources such as solar and power.

Life, of course, often reroutes our realities – and it’s usually a welcome relief when people see the light more brightly and change their shortsighted attitudes. Too bad, though, that is has taken the pandemic and inflation for anti-oil and-gas activists to realize how essential adequate fossil fuel supplies are for the foreseeable future.

Everywhere around us, improving technologies are changing the way we live and work. It’s also changing how we communicate with friends, family, and neighbors. Many people automatically think that the rapid pace of new technological innovation only happens with electronics like computers and cell phones. However, technology is rapidly changing the energy industry in the United States and across the world as well. Everything from sensors and monitoring equipment to concrete and steel.

As a result of these technological innovations, the way people use and interact with energy is changing. We now have traditional fuels like oil and natural gas helping power alternative and renewable energy sources like solar, wind, and hydropower. Not to mention the exciting prospects of battery storage, renewable natural gas, CO₂ capture and utilization, and hydrogen that are attracting substantial investment due to the ability to reduce emissions now and set the foundation for large-scale commercialization.

With all of these changes taking place, many people wonder what the future holds for traditional energy like oil and natural gas, and the critical energy infrastructure that produces, refines, and delivers this energy for end-users across the country.

Through the Looking Glass

Many groups and agencies from the U.S. Energy Information Administration (EIA) and the International Energy Agency (IEA) to the Organization of the Petroleum Exporting Countries (OPEC) have analyzed what future energy consumption trends look like. All of them agree that the world will require more oil and natural gas than what is produced today – and the investment in production and infrastructure that goes along with it – to meet the ever-growing demand.

For example, OPEC anticipates $11.8 trillion of investment in oil and natural gas infrastructure will be necessary. With 80% of that investment in North America as demand increases by 17.6 million barrels a day between 2020 and 2045. Meanwhile, the EIA estimates U.S. oil and natural gas production will grow to meet domestic and worldwide demand as well. By 2050, they estimate U.S natural gas production will increase to 43.0 trillion cubic feet while oil production will grow to 14 million barrels per day.

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You might be wondering where all of this oil and natural gas will be used if companies like GM, Ford, and Chrysler have pledged to become rivals of Tesla, removing internal combustion engines and replacing them with electric motors by 2035? Or maybe you’re thinking of all of the electrification mandate bills removing traditional fuels that are popping up across the country – perhaps even one in your city.

Let’s start with the transition of the automotive sector from gasoline and diesel-powered cars to battery electric vehicles. Today, there are over 250 million registered cars and trucks on America’s roads. Less than one percent of these vehicles are electric. Through innovation, internal combustion engine vehicles have longer average lifespans than vehicles made just a decade ago. Because of this and other consumer behaviors, people are keeping their vehicles for an average of 11.9 years. As a result, families and businesses keep vehicles longer, and the turnover of the nation’s vehicle fleet proceeds at a slower pace. Specifically, for businesses, that means it would take an estimated 15 years to turn over the existing fleet. Assuming all vehicles sold by 2035 are electric, vehicles with internal combustion engines will remain on the road until at least 2050. This does not take into account consumer actions and rising vehicle costs. According to a recent Kelley Blue Book report, the average price of a new car reached $46,000 – an all-time high.

Let’s look more closely at your standard electric or hybrid vehicle for a minute. Plastics, which are made out of petrochemicals, make up close to 50 percent of a vehicle’s volume, but only 10 percent of its weight. Automobile makers utilize polymers to enhance structure, performance and safety, which comes from reducing the weight of the vehicle allowing for better mileage. In fact, the current market for plastics in electric vehicles is valued at $966 million and is projected to grow to $4 billion by 2027 – almost a decade before the Big Three plan to manufacture only electric vehicles.

That generally covers the dynamics of the vehicle market, but it is important to remember that only a fraction of traditional fuel is used to power vehicles. So, what is the rest of it used for as it concerns emissions?

Electricity and heat. Currently, fossil fuels represent 60.6% of utility-scale electricity generation – or roughly 2,427 billion kilowatt-hours. That excludes the 58% of homes that utilize natural gas and 8% of homes that required petroleum-based fuels like heating oil, kerosene and liquefied petroleum gas that most people use in the form of propane. If you run the percentages compared to the number of homes in the U.S., you’ll understand how that reliance will continue – especially with the average duration of individual homeownership at roughly 13.3 years and the long-life span and efficiency of well-engineered boilers and HVAC systems.

Transportation, electricity and heat are the top focus of policymakers and anti-energy groups for new mandates and legislation, but oil and natural gas touch everything from power generation to being key components in almost every product we use throughout our day. From the plywood and paint that turns houses into homes to the LCD screens on our electronics and plastics in our cars that provide us our quality of life.

But What About Energy Infrastructure Like Pipelines?

Since oil and natural gas demand will continue to increase, pipelines and related infrastructure like compressors or pumping stations will be needed to meet our demand for transporting energy. And, the 2.6 million miles of pipelines deliver 99.999 percent of their products in the safest, most environmentally responsible way possible.

And, throughout the past few decades, we have seen pipelines across the country being converted from carrying liquids to gas and vice versa to ensure families and businesses have access to the right energy where and when it is needed. However, in the coming decades, as research progresses in alternative fuels like hydrogen, CO₂, renewable natural gas, renewable diesel, and other biofuels our energy infrastructure can be used to transport new fuels or feedstock’s for the industry.

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This is where the current conversation around pipeline infrastructure needs to evolve. While it is a top priority by anti-energy advocates to stop the continued development and use of fossil fuels, it also decreases our ability to adapt quickly to new fuel sources in the future that can help drive down emissions. That’s because before a pipeline can even be built, it can take years to design, map, site, permit, and construct. Now with lawsuits, protests, and rulemaking issues, it can take even longer. If we want to be prepared for these alternative sources, it will be imperative that we continue to build out and support the upgrades of this infrastructure.

As we saw earlier, technology continues to march on. And, although we will continue to rely on oil and natural gas for the foreseeable future, our substantial investments in existing pipeline infrastructure can help us continue our energy evolution.

Michigan Gov. Gretchen Whitmer claims she is “committed to ensuring small businesses can thrive” and “continue growing Michigan’s economy.” She relayed that assertion to a small-business owner in Flint whose firm makes eyewear from recycled plastic water bottles as a result of Flint’s water crisis.

So, tell us, governor, how you square that conflict while continuing your intense opposition to a critical pipeline replacement that will help protect the Straights of Mackinac, all while delivering cheap, safe, and reliable oil and propane to Michigan small businesses and farmers (who are small businesses), especially in the Upper Peninsula.

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Gov. Whitmer argues that the pipeline, which hasn’t leaked in its 68-year history, could lead to an oil spill that would put businesses at risk. But she has nothing to base that claim on. Especially since the new line would be in a tunnel under the Straits and out of the water. Every responsible regulator and judge who has reviewed and ruled on Enbridge’s Line 5 project, as well as the state legislature, simply don’t buy her argument.

What is clear from a significant and thorough review of the Line 5 project we commissioned by two respected energy and economic authorities, is that decommissioning Line 5 would severely hurt small businesses and farmers in Michigan by raising their energy bills and disrupting their fuel supplies – notably oil and propane – while hurting the economy.

It comes as Michigan’s small businesses struggle with workforce shortages, supply chain disruptions, and inflation. A new survey taken between January 10-17 by the Small Business Association of Michigan found that a majority of 600 respondents list workforce shortages, inflation, and supply chain difficulties as their biggest headaches. Eighty-seven percent are experiencing higher costs than before the pandemic, and 14% remain pessimistic about their long-term survival, which is just slightly down from 16% in September.

Our report calculates these specific and severe annual losses to Michigan from decommissioning Line 5: $3.06 billion in economic activity, $1.02 billion in the state’s gross state product, $365 million in labor income, 6,692 jobs, and $56.8 million in tax revenue.

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A shutdown also would reinforce Michigan’s “anti-business” reputation, the report maintains. The consequences would be a further exodus of people and jobs elsewhere. This also comes as another new report finds Michigan struggling to grow as fast or faster than other states. Business Leaders for Michigan, a Detroit business roundtable, benchmarked Michigan’s performance against the top 10 states. It found, among other things, that Michigan ranks 41^st in labor force participation and 44^th in its three-year growth rate. It ranks 36^th in GDP per capita and 35^th in median household income.

Gov. Whitmer should listen to Roundtable members. Roundtable President and CEO Jeff Donofrio contend that states have been investing for years to attract businesses, jobs, and talent “and many states that aren’t Top 10 are well ahead of Michigan when it comes to investing for future growth.” And, he adds: “Unless Michigan urgently addresses our economic challenges, we may fall so far behind that we will never catch up.”

Isn’t it evident, Gov. Whitmer that we can’t address those challenges – and their impact on our small businesses and farmers – and all of us – by terminating the Line 5 project.

Ohio, Indiana, and Pennsylvania were added to a recent report we commissioned at Consumer Energy Alliance, which found these states would see a combined $20.8 billion economic loss if Michigan Governor Gretchen Whitmer shut down the Line 5 pipeline for good. Ohio Governor, Mike DeWine, whose state would see some of the most significant losses, expressed dismay in a letter to Gov. Whitmer. He, of course, understands the implications of such an action, especially the economic fallout, jobs implications, and the decrease in fuel supply for transportation, home heating, and manufacturing – but do those against the pipeline, including Governor Whitmer, understand?

After Canada invoked a 1977 bilateral treaty – making it a federal and international relations matter – even the Biden Administration clarified its position during a White House briefing, saying that shutting down Line 5 “…is something that we’re not going to do.”

Outside of the more than $3 billion in lost economic activity, 6,692 lost jobs, and more than $56.8 million in lost state tax revenue, Michigan would also lose access to the 540,000 barrels per day of energy Line 5 delivers to the Rapid River and Detroit refineries, and eight other regional refineries. These refineries process the energy Line 5 delivers into gasoline, diesel, jet fuel, and natural gas liquids like propane for home heating and other feedstocks like ethane, butane, and isobutane used to produce other chemicals for manufacturing everyday consumer products for Michigan and the region.

Primarily, Line 5 carries roughly 80% crude oil and 20% natural gas liquids (NGL), and in winter, the line adjusts to bring more NGLs to accommodate home heating needs – especially for areas like the UP that are reliant on propane. Of that energy, 40-45% is shipped out of state, and 40-45% stays in the state. However, much of what is shipped out eventually flows back into Michigan. For example, what is delivered to the Toledo Refining Company in Ohio, is turned into jet fuel, diesel, gasoline, and distillates used in manufacturing. This refinery and other Northwest Ohio fuel manufacturers supply 42% of Southeastern Michigan’s gasoline and 14% of its non-jet diesel. They also provide the majority of the fuel to Detroit Metropolitan Airport, one of the busiest airports in the country.

The reality is Michigan, and the region utilizes this energy. Yes, markets can eventually adjust to find replacement supplies but how long will that take, and at what cost to people and the businesses that employ them? Pushing for a complete shutdown of Line 5 shows a lack of seriousness, understanding, and a proper grasp of how energy markets work. Fuel demand for most consumers and industries is inelastic – that means the demand is strong even when prices rise significantly.

Trucks, trains, and planes still have to operate in high price environments. Large volumes of fuel do not just arrive at their destination or at a gas station because we will it to be. That requires infrastructure, refining, and processing capabilities. If you shut down the source of fuel for local refineries, new ones do not sprout up to replace them at another more convenient location. Demand in other areas also doesn’t decrease to adjust for the lack of energy in Michigan. No new refinery has been built in the U.S. since the late 1970s either, largely because of their incredibly capital-intensive nature and the difficulty to get them permitted. Shutting down Line 5 is in essence tacit support for more expensive energy and additional imports from OPEC to meet domestic demand.

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Governor Whitmer created a “Blue-Ribbon Taskforce” to analyze the propane supply to the Upper Peninsula too, “formulate alternative solutions for meeting the U.P.’s energy needs.” Examining and studying new rail, truck, and spending more to weatherize homes due to the consumer hardships that the state’s actions would create were some of the top solutions. The problem is the steady decline in truck drivers since 2019. In 2021, the American Trucking Association projected a shortage of 80,000 drivers. Add in rail; what new rail spur is the state envisioning? Rail lines are privately owned and capacity is already subscribed for by other commodities and goods they carry (just ask Michigan farmers); and you must consider those rail cars have to be specially made to transport propane, which means they need to be much stronger and have the approval to move hazardous materials. Additionally, a typical LPG tank car holds 30,000 gallons. However, it should be noted that Michigan relies on more than 489 million gallons annually to fuel its farms, businesses, homes, and vehicles.

Some have even suggested a pipeline reversal. That means taking an existing pipeline and repurposing it from one type of crude for another. Depending on the crude, lines would need to be modified to adjust for the chemical characteristics. However, that is only if the lines have capacity. The energy infrastructure network is highly complex and interconnected. In some cases, much of the energy within these pipelines is already accounted for by other states and different countries. Unfortunately, an independent risk analysis stated, “The supply network generally runs near capacity, which creates challenges in making up for lost volumes.” It noted that increasing volumes to make up for the loss of Line 5 would be at the expense of other fuels across Illinois, Ohio, Michigan, and Canada. Not quite an easy fix.

Yet, Gov. Whitmer intentionally chooses to mislead Michigan families and consumers about Line 5 by portraying it as a cheap garden hose left carelessly on the lakebed, ready to spring a leak at any moment and the proposed Line 5 Tunnel Project.

It is not in her best interest to point out that the Line 5 Tunnel Project would remove the existing pipeline from the lakebed and encase a new section in a concrete tunnel, up to 100 feet below the lakebed in solid bedrock– essentially entombing it. The state-of-the-art tunnel will be built to carry any leakage away from the water in the highly unlikely event of a spill, a fact the governor’s anti-energy activist donors do not want the public to know.

Likely because the League of Conservation Voters, who gave $68,000 directly to her campaign and then spent almost another $2.5 million through their super PAC in support of her election, are vehemently against the pipeline and whose advocacy and lobbying efforts often give mistruths in an attempt to persuade the public. The only problem with their mistruths is that they are easily discoverable in public court documents that quickly dispel these fibs. The court isn’t the place to perjure oneself.