Providing coverage of Alaska and northern Canada's oil and gas industry
January 2019

Vol. 24, No 1 Week of January 06, 2019

Enbridge plan to replace Line 3 faces multi-pronged US opposition

Gary Park

for Petroleum News

Enbridge has Canadian oil sands crude to get trapped in a growing regulatory, political and legal bog as it strives to gain final approval for the replacement of its aging Line 3 in Canada and the northern U.S.

And the struggle appears far from over as Minnesota prepares to inaugurate a new governor on Jan. 7 - from Mark Dayton to Tim Walz - while keeping the office in the hands of Democrats.

The 34-inch Line 3, which has shipped crude oil from Alberta to Superior, Wisconsin, for 50 years, is scheduled to be replaced by a 36-inch line in 2019.

The little-known system has gained increasing attention in more recent years as corrosion and cracking has caused a series of spills, forcing Enbridge to lower capacity by half to 375,000 barrels per day.

Replacement planned

Enbridge refused to heed urgings from politicians, environmentalists and Indian tribes that it phase out the line, opting instead to replace most of the 1,000-mile link at a cost of C$5.3 billion in Canada and US$2.9 billion in the United States to regain capacity of 760,000 bpd and add another 40,000 bpd.

Armed with final regulatory approvals in Saskatchewan, North Dakota and Wisconsin, Enbridge started construction work in those jurisdictions 15 months ago, while watching its hopes of achieving an in-service target of early 2019 extend to late 2019 as opposition in Minnesota has gathered momentum.

The latest setback for the project occurred after mid-November when the independent Minnesota Public Utilities Commission rejected demands that it order a fresh round of hearings, prompting the state’s Department of Commerce to launch an immediate appeal, arguing that the PUC, in granting a certificate of need and approving the pipeline route, failed in its job because Enbridge did not introduce and the PUC panel did not properly evaluate the kind of long-term oil demand forecast required by state law.

Outgoing governor endorsed appeal

Dayton said he strongly endorsed the appeal, arguing that crude oil on Line 3 would flow through his state and supply other states and countries, while providing on limited benefits to Minnesota refineries.

Enbridge said Dayton’s stance was “very disappointing and erroneous” and insisted the Commerce Department’s claims were “not supported by evidence or Minnesota law.”

The company said Enbridge provided multiple, detailed forecasts showing there would be a demand for restoring Line 3’s capacity for years to come.

It is not yet clear where Walz will stand on the issue, although he has endorsed the current path to construction, but he has pledged to work on reducing greenhouse gas emissions and wants tribal concerns about Line 3 to be heard and addressed.

Minnesota EIS

A Minnesota environmental impact statement has estimated that Line 3 would generate US$287 billion in climate damage over its projected operating life.

It said the pipeline would contribute to deforestation and increase the risk of pollution in Minnesota’s water ecosystems and wild rice beds.

As well, opponents have noted that Line 3, despite estimates that it has safely transported 99.999 percent of its crude, was responsible for the largest inland oil spill in the United States when 40,000 barrels of oil escaped from a rupture near Grand Rapids in 1991.

On a separate Enbridge pipeline, 20,000 barrels of diluted bitumen spilled into the Kalamazoo River in Michigan in 2010 - a spill that is still being cleaned up, despite expenditures of more than US$1 billion.

Adam Scott, a senior adviser at Oil Change International, told The Narwhal, which reports on energy and environmental issues, that the notion of spill cleanups “is always overstated. It’s not technically possible in a lot of cases. You’ll end up with toxic bitumen getting into aquifers and sediment. The impacts can be generational.”

Enbridge countered that independent engineering research and analysis has determined that deactivated pipelines “with adequate cover will have a very long life as load-bearing structures, even after decades of deactivation.”

It pledged that the conversion of Line 3 will “protect water resources to ensure that the deactivated pipeline will not drain any fields, lakes, rivers, streams or other wetland areas.”


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