STATE OF MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY LANSING. August 4, 2017

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1 RICK SNYDER GOVERNOR STATE OF MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY LANSING C. HEIDI GRETHER DIRECTOR VIA ELECTRONIC SUBMITTAL Dynamic Risk 1110, Avenue SW Calgary, Alberta T2R 1L9 CANADA Dear Sir or Madam: Thank you for your efforts in conducting the independent Alternatives Analysis for the Straits Pipeline and presenting the draft final report to the State of Michigan. The Michigan Department of Environmental Quality (MDEQ) submits the following comments regarding the contents of the draft final report: Executive Summary: 1. Page 1-20 of the report states: In all evaluations of risk presented in this report, care has been taken to represent true risk, rather than upper-bound estimates. In this respect, a deliberate attempt has been made to avoid the compounding of layers of worst-case assumptions in making estimates of spill probability and spill consequence to ensure that results are as realistic as possible. The alternative to adopting this approach would result in unquantifiable levels of risk amplification, leading to results that are inconsistent with expected outcomes. This statement should be further elaborated or detailed by Dynamic Risk Assessment Systems, Inc. (DRAS). For example, if the failure of leak detection mechanisms is not expected and, therefore, is considered a compounding layer to the evaluation of risk, then it should be further explained. Identifying and explaining other examples of compounding layers may help to further clarify the risk evaluation methodology. This statement would also benefit from further explanation regarding the likelihood of a compounded impact. For instance, the Line 6b spill was both a mechanical and a human failure, a compounded risk that increased the spill consequence greatly. If compounding risks are excluded, then the report should provide some analysis of past spills or physical circumstances of Line 5 to show compounding causes are the exception and not the rule, and why an exception would not be the worst-case scenario. CONSTITUTION HALL 525 WEST ALLEGAN STREET P.O. BOX LANSING, MICHIGAN (800)

2 Page 2 2. Page 1-21 details the difficulty of evaluating environmental risk and that such quantitative measures needed to do so do not exist because of the variability of environmental consequences that differ greatly from one individual to another. However, DRAS explains environmental risk can be estimated on the monetization of damages based on certain impacts. One such impact identified by DRAS is the Natural Resource Damage Assessment (NRDA). However, they footnote their approach is appropriate for hypothetical future events, whereas NRDA is an approach used for actual spills. DRAS should consider further detailing this footnote by conducting a hypothetical comparison of their approach vs. NRDA. This would help to clarify how the approaches are different and possibly explain discrepancies in monetization of damages. Alternative 5: Analysis of Existing Pipeline 1. On pages 2-37 and 2-38, there are 24 bullets outlining the various initiatives and improvements implemented by Enbridge as a result of the 2010 Line 6b Marshall incident. Although these bullets identify the overall lessons learned by Enbridge, they also indicate areas that potentially lead to the 2010 incident. If DRAS is going to identify these 24 bullets as items that will prevent an operational error in the future, they should detail the reason why Enbridge needed to implement these various initiatives in the first place. 2. Page 2-62 discussed the buoy data used for the Monte Carlo simulation and that it is unlikely current velocities will hold constant at extreme levels for extended periods of time, but rather they fluctuate. This needs to be further evaluated. For example, what if current velocities did hold at an extreme level for an extended period of time? What impact would that have on the analysis? Could constant extreme velocities be simulated to demonstrate the threat of such currents? 3. Page 2-72, Oil Spill Simulation, states the model used a production period of July 1, 2014 to June 30, This time frame is of concern based on yearly temperature averages experienced in the Great Lakes region. Specifically, this time range omits the winter of 2014 in which the Great Lakes experienced a near 100 percent ice coverage. The time frame for the production period of the model should either be extended to contain extreme weather conditions or several different production periods should be used. 4. Starting on page 2-73, DRAS presents the oil spill modeling. The modeling has come under criticism because of the perceived lack of lakeshore oiling compared to other models conducted by the University of Michigan. DRAS should provide additional detail in the final report as to why their model results could be drastically different than other models, such as simulation time frames, consideration of oil degradation and oil weathering assumptions, and how these have impacts on oil spill consequences. DRAS does provide an Overview of

3 Page 3 Potential Consequences, but offers no context about how it could differ from other models or simulations. 5. Over 120 simulations were conducted for the oil spill analysis. A single simulation would have a drastically different appearance compared to overlaying all 120 simulations in one map. For comparison purposes, DRAS should consider showing the impacts of a single simulation (or simulations showing bookends ) and discuss differing impacts. 6. Related to Item 5, above, the MDEQ recommends a breakdown of the 120 simulations into predetermined geographic distributions. For example, of the 120 simulations, how many impacted the southern shore of the Upper Peninsula or the northern shore of the Lower Peninsula east of the Mackinac Bridge? How many simulations impacted only Lake Huron, only Lake Michigan, or both? Following the systematic breakdown, the economic and environmental consequences for the predetermined geographic areas could be analyzed to demonstrate where in the Straits area has the highest potential for impact. Determining geographic areas of highest consequence could be used for future spill response planning and contingency purposes. 7. Page starts to detail the contingent environmental damage costs within the Straits. The MDEQ has issue with the results of the analysis detailed on page 2-103, but also in Appendix R. DRAS estimates economic consequences at a maximum of $128,160,000 and environmental consequences at a maximum of $76,900,000. Many comparisons have been made to the 2010 Line 6b incident that the MDEQ acknowledges may not be completely accurate due to a difference in environments, behavior, and characteristics of oils and the ability to use certain spill response techniques. Therefore, detailed below is a comparison of a separate incident, i.e., a barge that sunk in July 2012 in approximately 20 feet of water in Lake Huron. This incident is comparable to a release from Line 5 in that response actions occurred in a lake. Although the barge only released refined products, their behavior, once released into the environment, are more comparable to oil contained in Line 5 than in Line 6b. The sunken barge incident resulted in the recovery of approximately 625 gallons (approximately 15 barrels) of spilled product. The approximate total cost of incident response for the United States Coast Guard (USCG) for both direct and indirect costs was $300,000 (does not include responsible party expenses, only USCG) or $20,000 per barrel. Using $20,000/barrel as a benchmark, the discharge of 4,500 barrels, as proposed by DRAS in their oil simulations in the Straits, costs could exceed $90 million for only response and recovery. This single incident review provides real world comparison suggesting the environmental and economic consequence

4 Page 4 numbers need to be reevaluated. A review and comparison of other case studies and real world incidents should be conducted to either confirm the final values and/or be used as benchmarks. 8. Similar to Item 7, above, DRAS s environmental consequences consider environmental restoration. There are approximately 50,517 acres of coastal wetland in the Straits area (Cheboygan, Emmet, and Mackinac Counties). Dependent on cost per acre, restoration and mitigation of coastal wetlands alone could be a major percentage of environmental consequence values stated in the report. This further demonstrates the need for further evaluation of the environmental and economic consequence values. Alternative 4: 1. The section on Alternative 4 addressed the process and techniques used to install a new pipeline. However, there is no discussion of the environmental impacts these techniques would have. A trench-laid pipe could have a large impact on the bottomlands of the Great Lakes and, therefore, would likely require a permit from the MDEQ, whereas the tunnel option does not pose the same threats to the Great Lakes bottomlands, but still poses other considerable concerns. A table or additional narrative section explaining the potential environmental impacts of the actual installation activity of each new pipeline crossing is recommended. Alternative 1: 1. On page 6-21, there is good content regarding the crossing of sensitive aquatic environments by the proposed alternate southern route of Line 5. For comparison and evaluation purposes, the same information about stream crossings, acres of wetlands crossings, etc., should be evaluated for the entirety of exiting Line 5 and the proposed northern pipeline route. Non-Specific Comment: 1. In the public forum, there are considerable references and comparisons of a potential incident from Line 5 and that of the 2010 Line 6b incident. DRAS should consider adding a section to the report identifying and explaining the differences in Line 5 and former Line 6b and the 2010 incident. For example, a comparison and explanation of oil characteristics and their behavior once released in the environment from the two pipelines will help to clarify some perceived discrepancies in environmental impacts and consequences.

5 Page 5 The MDEQ looks forward to further engagement with you regarding the analysis. If you have any questions or need additional information, please contact Mr. Matthew Goddard at goddardm@michigan.gov or Sincerely, C. Heidi Grether Director cc: Mr. Keith Creagh, Director, Michigan Department of Natural Resources Ms. Valerie Brader, Executive Director, Michigan Agency for Energy Mr. Matthew Goddard, MDEQ