Some advocates of permanently closing Line 5 are proposing the U.P. Energy Task Force examine substitute fuels, alternative methods of electricity generation or other methods of home heating. For example, the Michigan Statewide Energy Assessment recommended that the state carry out a “comprehensive alternatives analysis,” that included, among a list of other options, “the use of electric heat sources, including heat pumps … for residential propane customers.”[15]
The primary heating sources in the Upper Peninsula are natural gas, propane, electricity and wood. Natural gas is the lowest-cost source of fuel for home heating, but it requires expensive infrastructure, which the U.P. currently lacks. The Michigan Statewide Energy Assessment suggests extending natural gas infrastructure for home heating. But many of the homes that use propane are located in rural areas with low population density. The upfront costs associated with building natural gas infrastructure to these remote residences is cost prohibitive.
For example, homeguide.com — a website that connects homeowners with home repair contractors in their area — estimates that the cost to install a new gas line from the home to the street — in a location where existing natural gas infrastructure is already present — is $2,000 per household.[16] Homeguide.com also notes that installing a line within the home to serve a furnace and water heater costs on average about $1,500. It might cost then about $3,500 per household in infrastructure costs to expand the use of natural gas in the U.P. That adds up to over $80 million for the 23,000 households currently using propane in the U.P.
But those costs only account for an area where there is an existing gas supply for these homes. A recent BTU Analytics report analyzed the projected and actual costs of new gas pipeline construction in 12 locations. The costs ranged from $2.9 million to $13.1 million per mile.[17] For a back-of-the-envelope calculation, imagine that a single natural gas pipeline could be built across the Upper Peninsula at the lowest-cost estimate of $2.9 million per mile. Then also suppose that this pipeline could supply the entire population of propane-using households across the Upper Peninsula if it were laid along the 160 miles of highway between St. Ignace and Marquette. That single stretch of pipeline would add $464 million in additional costs on top of the $80 million in household costs noted above. Even using these unreasonably low-cost estimates, it would easily cost the U.P. over half a billion dollars to make natural gas the dominate heat source.
[15] Sally A. Talberg, Norman J. Saari and Daniel C. Scripps, “Michigan Statewide Energy Assessment: Initial Report” (Michigan Public Service Commission, July 1, 2019), https://perma.cc/8F8Z-TR7X.
[16] “How Much Does It Cost To Install Or Repair A Gas Line?” (HomeGuide), https://perma.cc/XL9H-LDYT.
[17] Andrew Bradford, “Gas Pipeline Costs Run Higher” (BTU Analytics, Sept. 7, 2018), https://perma.cc/3UJT-G2BR.