Line 3 to the rescue; Enbridge upgrades pipeline to Wisconsin

Gary Park

for Petroleum News

Canada is within months of achieving a rare objective - starting shipments of Alberta oil sands crude to U.S. customers.

Enbridge, North America’s largest crude pipeline company, has astonished Canadian producers with a bold prediction that the upgrading of its aged Line 3 through the U.S. Midwest will - despite ongoing legal, regulatory and protest activities - be “full in service” in this year’s final quarter.

If accurate, the forecast will see shipments of heavy crude from the Alberta oil sands grow to 760,000 barrels per day from 370,000 bpd, which Chief Executive Officer Al Monaco told shareholders will launch a “critical integrity project that will improve safety and further reduce environmental risks, while driving significant incremental (earnings) growth.”

The Calgary-based company, which expects to carry a record total averaging 2.8 million bpd in Canada and the U.S. this year, said it filed procedural regulatory documents with the Canada Energy Regulator and the U.S. Federal Energy Regulatory Commission in mid-August to allow for tolling surcharges on Line 3 within as little as 30 days.

Sept. 15 effective date

The major delays have occurred in Minnesota, where Enbridge has faced and mostly overcome its sternest opposition that continued on Aug. 19 when an estimated 300 protesters shut down Duluth’s Aerial Lift Bridge for about 30 minutes while they hung a “Stop Line 3” banner across the span.

The protesters dispersed when asked by police and no arrests or injuries were reported.

In contrast to its scuttling of TC Energy’s Keystone XL pipeline and refusal to endorse Enbridge’s Line 5 upgrading in Michigan, the administration of President Joe Biden has supported permits for Line 3 in the face of relentless opposition.

Jake Sullivan, Biden’s national security adviser, lashed out earlier in August at the refusal by OPEC and allies to boost their oil output to tackle rising U.S. gasoline prices which he said that “if left unchecked, risks harming the ongoing global economic recovery.”

Kenney joins chorus

“The same U.S. administration that retroactively cancelled Keystone XL is now pleading with OPEC and Russia to produce and ship more crude oil (to the U.S.). This comes just as Vladimir Putin’s Russia has become the second largest exporter of oil to the U.S. (trailing only Canada),” he said.

Line 3 is critical for Alberta, where crude output has surpassed existing pipeline capacity in recent years, resulting in sharp discounts for Alberta’s heavy crude against U.S. blends and the loss of billions of dollars in government royalties.

Alberta Energy Minister Sonya Savage said her government was “excited” by the prospect of Line 3 coming into service.

“Every credible forecast of future world energy consumption sees strong oil and gas demand continuing for several decades and pipelines will be critical to enabling Alberta to help meet the world’s energy needs,” she said.

U.S. Congressman from Texas, Dan Crenshaw, said Biden’s move to give greater priority to OPEC oil than U.S. oil was “reaching a whole new level of stupid … not just stupid but anti-American.”

Savage made no attempt to pull her punches, suggesting Biden’s initiative contained “irony and hypocrisy all over the place,” first by cancelling Keystone XL, then six months later asking OPEC to replace the 830,000 bpd lost by burying KXL then by talking about “rapidly transitioning off fossil fuels in the U.S. by 2035, including any electricity generated by fossil fuels and phasing out the international combustion engine.”

Other critics suggested Biden should be celebrating high oil and gas prices because that should reduce consumption, thus lowering greenhouse gas emissions.

Instead, they observe, Biden is on his hands and knees begging the OPEC dictatorships who fund terrorism against the West and Western interests.

- GARY PARK