Enbridge argues Line 3 oil pipeline needed for Minnesota, region
Enbridge Energy is arguing its proposed $2 billion Line 3 oil pipeline is critical to serve oil refineries in Minnesota and throughout the region.
The company's Wednesday filing with the state Public Utilities Commission delivered a sharp rebuke to previous testimony from the Minnesota Department of Commerce.
In September, the department surprised both supporters and opponents of the project when it argued that neither the current Line 3, nor the proposed expanded line, were necessary to meet the state's demand for oil, which has remained flat for the past decade.
Enbridge called the state's analysis "flawed" and said it "fails to take into account the immediate negative economic and supply consequences to Minnesota were Line 3 to be shut down."
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Line 3 is part of an existing network of Enbridge pipelines that together transport nearly 3 million barrels of oil a day from Canada across northern Minnesota. Some of that oil is transferred to another pipeline system that serves Minnesota's two refineries. The rest is shipped to other refineries in the Midwest and beyond.
The existing line, which is about 50 years old, is corroding and requires increasing maintenance to keep it safe. Enbridge has proposed replacing it with a new line, along a different route, that would be able to carry nearly twice as much oil.
"This is an essential project for Minnesotans that will ensure environmental protection, and safe transportation of crude oil," said Guy Jarvis, Enbridge president of liquids pipelines.
But the project has generated intense opposition from Indian tribes, citizen groups and environmental organizations, that fear potential spills into wild rice waters, lakes and streams — including the headwaters of the Mississippi River — and argue it would exacerbate climate change.
Many of those groups, and the state Department of Commerce, have recently highlighted another argument: There's no pressing need for the pipeline, they say, and refineries in the Midwest and Minnesota already receive all the oil they need.
Some analysts have predicted that much of the increased oil shipped on Line 3, if the replacement project is approved, would instead serve refineries in the Gulf Coast region.
Enbridge disputes that claim, saying it doesn't have the pipeline capacity to transport 370,000 barrels of additional oil to the Gulf Coast.
Rather, Enbridge argues in its testimony that the pipeline would help reduce the rationing that currently takes place on its pipeline system, where oil shipper demand currently exceeds the capacity of the lines to transport oil.
"My analysis indicates that this situation will get worse as we move through time, and that the Minnesota refiners will experience more difficulty over time getting the crude oil via Enbridge, unless Line 3 is replaced," said energy consultant Neil Earnest, president of Muse, Stencil & Company, which filed testimony on behalf of Enbridge.
Minnesota is also part of a broader oil market, Enbridge argues, in which refined products from Minnesota's refineries are exported to neighboring states, and products from other states are imported.
Therefore, Enbridge argues, Minnesota should approve the pipeline not only to benefit in-state refineries, but also the regional oil market.
"Minnesota relies on the success of refineries in the state and in the adjacent states," Jarvis said. "So when we say, 'Yes, that regional benefits are part of the reason that Minnesota should approve this,' is because the benefits those refineries are going to receive in adjacent regions are going to flow to Minnesota."
Public hearings on the proposed pipeline continue across northern Minnesota for the rest of the month. The Public Utilities Commission is expected to make a final decision on the line next April.