A look at Enbridge’s Line 3 Replacement project

A crew works in a 10-foot hole along Enbridge's Line 3 oil pipeline near Bemidji last September. The pipeline had external corrosion and was being repaired with a "sleeve."

DULUTH — The Minnesota Department of Commerce has come out against the Enbridge Line 3 replacement, raising the stakes in an already contentious battle over the oil pipeline’s fate.

“In light of the serious risks and effects on the natural and socioeconomic environments of the existing Line 3 and the limited benefit that the existing Line 3 provides to Minnesota refineries, it is reasonable to conclude that Minnesota would be better off if Enbridge proposed to cease operations of the existing Line 3, without any new pipeline being built,” the agency wrote in testimony submitted to the Public Utilities Commission on Monday, Sept. 11.

The testimony, written by Kate O’Connell, manager of the Energy Regulation and Planning Unit of the Department of Commerce, comes ahead of evidentiary hearings on the oil pipeline replacement that will see the project debated in a trial-like setting in November. A new round of public hearings across the state will kick off at the end of the month.

Separately, the adequacy of the pipeline’s final environmental impact statement is under review. Comments are being accepted on that issue through Oct. 2.

Enbridge wants to lay 340 miles of new pipe across Minnesota on its route from Alberta to the company’s terminal in Superior. The pipeline would carry 760,000 barrels of oil per day and take a new route across much of the state compared to the company’s other lines. The existing Line 3, which is about 50 years old and operating at half its original capacity, would be cleaned out and largely left in the ground.

Intervenors in the state’s permitting process — with some for and many standing against Line 3 — had to turn in initial testimony on Monday. Environmentalists and Native American tribes are fighting to stop the pipeline from going forward while Enbridge and its allies assert safety will be improved by replacing Line 3.

Commerce spokesman Ross Corson said that “unlike the environmental impact statement, which was an impartial fact-finding document,” the department and other stakeholders are now taking sides and making cases for or against the pipeline’s approval, which ultimately rests in the hands of the Public Utilities Commission.

An economic analysis by London Economics International included in Commerce’s testimony said that regional refineries “have been operating at high levels of utilization, which indicates both they are not short of physical supplies of crude oil, and that they have little room to increase total crude runs.”

The department also found the expansion of Line 67 from 500,000 to 800,000 barrels per day would meet the need claimed by Enbridge for Line 3.

Chris Joseph wrote in testimony on behalf of Friends of the Headwaters that “the evidence provided by Enbridge itself as well as industry authorities indicates that the project is not needed. Further, Enbridge has not provided nor demonstrated that the costs of the project are outweighed by the actual, incremental benefits of the project.”

For Shippers for Secure, Reliable and Economical Petroleum Transportation, Paul Kahler of Cenovus Energy wrote: “Failure to construct the project at full capacity would result in shippers continuing to be unable to ship volumes nominated to meet market demands. … Shippers would have to seek alternative transportation arrangements, including other pipelines and rail, to move their oil supply to markets.”

The $6.5 billion Line 3 replacement project is already under construction in Canada and Superior. Enbridge wants the pipeline online by 2019, though a recommendation from the PUC is not expected until next spring.

Gov. Mark Dayton said in a statement Monday he will wait for the process to play out “before expressing my personal views.”

“I note that, under statute, the PUC is completely independent of my administration,” he added. “I am confident that it will make its decisions based upon all the evidence and its judgment about the best interests of all of Minnesota.”

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