Enbridge puts on hold proposed Sandpiper oil pipeline across northern Minnesota

610 miles of pipe waiting
Fifty miles of pipe meant to create the Sandpiper is stacked in a hay field on Highway 200 east of Lake George, Minn., in November 2014.
John Enger | MPR News

Enbridge Energy Partners announced Thursday it will delay its controversial proposed Sandpiper oil pipeline through northern Minnesota.

In a filing Thursday with the Minnesota Public Utilities Commission, Enbridge said "it will no longer pursue the regulatory approvals necessary to construct Sandpiper in Minnesota."

The news was expected, after the Calgary-based company's investment last month in North Dakota's Bakken pipeline system, which put the future of the Sandpiper into doubt.

But Enbridge didn't go so far as to say the project was completely dead. President Mark Maki said the company could again propose the Sandpiper when oil production in North Dakota increases.

"Bakken, we think, will grow as you see prices improve," he said. "When that happens, the solution may look different, but there's going to be a need for additional pipeline capacity out of that basin."

Because that's unlikely to occur within the company's five-year planning horizon, Maki said Enbridge decided to withdraw its application.

Enbridge first proposed the Sandpiper in 2013 to transport 225,00 barrels of crude oil per day from the Bakken region of North Dakota to the company's hub in Clearbrook, Minn. From there it would have carried 375,000 barrels per day to Superior, Wis.

Sandpiper pipeline
A map of the proposed Sandpiper pipeline.
Courtesy of Enbridge | File 2015

It was originally forecast to go into service this year.

But the proposal ran into stiff resistance from environmental groups and Native American tribes, who objected to the proposed route across a swath of northern Minnesota rich in sensitive lakes and rivers, including the headwaters of the Mississippi River, where they argued a potential spill could be catastrophic.

Opponents proposed several alternate routes, and the Minnesota Court of Appeals ruled last year that an environmental impact statement had to be completed on the project before it could proceed.

Richard Smith, president of Friends of the Headwaters, said he was thrilled with Enbridge's decision.

"We always thought it was a bad idea for them to put a Bakken oil pipeline through Minnesota's headwaters lake country," he said. "And they finally acknowledged that."

Enbridge's Sandpiper project director Paul Eberth said the company, along with Marathon Petroleum, which was to be the project's main oil shipper, invested $800 million in the development.

Opponents protest the Sandpiper pipeline.
About 30 opponents of the proposed Sandpiper oil pipeline rallied in downtown Duluth in January 2015 before a Public Utilities Commission public hearing on the project.
Dan Kraker | MPR News

Now, Enbridge says it no longer needs Sandpiper, after a $1.5 billion investment in the Bakken Pipeline system was finalized.

That project includes two pipelines running from North Dakota to Illinois and Gulf Coast refineries, bypassing Minnesota. One of them is the Dakota Access Pipeline, which has been the subject of protests by Indian tribes concerned about the line's crossing of the Missouri River.

Enbridge officials said they expect the Dakota Access Pipeline to go into service by the end of 2016.

Enbridge and Marathon Petroleum will each own 49 percent of the project.

Enbridge said its decision to drop Sandpiper does not affect its plan to replace its existing Line 3, which carries crude from the oil sands region of Alberta, Canada.

In this week's regulatory filing, the company said the termination notice "applies only to activities related to preparation of the Sandpiper EIS. Preparation of the EIS for Enbridge's Line 3 Replacement Project should proceed."

By replacing the aging pipeline, Enbridge plans to boost the line's capacity back up to 760,000 barrels per day.

The company's preferred route for Line 3 follows part of the same proposed path for Sandpiper, near lakes and rivers in northern Minnesota.

"It's a little bit surprising to us that, given they understand a Bakken oil pipeline through the lake country is not necessarily a good idea," said Friends of the Headwaters' Smith, "that they would think a tar sands pipeline would be a good idea to go through our lake country."

But Enbridge's Paul Eberth said he didn't expect delays. He predicted construction could begin in late 2017.

"We are optimistic that the regulatory process now as it's been recast following the legal action on Sandpiper, will be a good process," he said.