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Line 3 oil pipeline project faces prospect of more delays

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Tanks at the Enbridge Energy terminal in Superior, Wis.
Tanks at the Enbridge Energy terminal in Superior, Wis., is seen in June 2018. Two state agencies involved in Enbridge's proposed Line 3 oil pipeline replacement project said the permitting schedule for the pipeline needs to be revised.
Jim Mone | AP Photo 2018

Enbridge's proposed Line 3 oil pipeline replacement likely could see more delays, after two state agencies involved in the project said Tuesday that the permitting schedule for the pipeline needs to be revised.

Just how long those delays could last remains unclear. But in a joint statement from the Minnesota Pollution Control Agency and the Minnesota Department of Natural Resources, officials said that a recent state Court of Appeals ruling that the pipeline's environmental review was inadequate will have implications for their permitting process.

"Both the Minnesota DNR and the PCA have come to a conclusion that the current process is going to slow down a little bit," said MPCA spokesperson Darin Broton. "And while both agencies can continue to move forward with doing some technical work on its permits, there are a few pieces that we have to take a pause on."

State utility regulators signed off on the controversial $2.6 billion project across northern Minnesota nearly one year ago, when they conditionally approved a certificate of need and route permit for the pipeline.

But the project still needs several environmental permits from the DNR and MPCA, as well as from the U.S. Army Corps of Engineers, before construction can begin.

Nearly three weeks ago, the Minnesota Court of Appeals determined the project's environmental impact statement needed to be fixed, ruling that it didn't adequately address the potential impact of an oil spill in the Lake Superior watershed. The court sent the statememt back to the Minnesota Public Utilities Commission to address the issue.

Now, the Minnesota DNR and PCA say they may not take final action on the permit applications before them until the environmental review is revised and approved.

The Minnesota Public Utilities Commission has not yet scheduled a hearing on the matter, nor has it announced a schedule moving forward. The Minnesota Department of Commerce, which completed the initial environmental impact statement for the pipeline, would likely be called upon again to provide the new analysis. Attorneys involved in the case have estimated that process would likely take about six months.

A key state permit at issue is known as a 401 water quality certification. The MPCA now says it will not be able to release a draft permit on July 1 as previously scheduled. The agency also faces a federal deadline to issue a final permit by Oct. 30, one year after Enbridge first filed its application.

The water quality certification permit needs to be issued before the U.S. Army Corps of Engineers can issue a federal wetlands permit. 

"Right now, we're working with the company to figure out what is the best process for us to move forward," said Broton.

Enbridge declined to speculate on what the permitting delay could mean for its construction timeline. The company has previously said it expected to have state permits in hand by November, and that federal permits would take another month or two after that, which would have allowed Enbridge to begin construction early in 2020.

Last month Enbridge told industry analysts the total cost of building Line 3, which would stretch from Alberta, Canada, through Minnesota to Enbridge's pipeline hub in Superior, Wis., could exceed its previous estimate of $6.7 billion because of delays.

"The bureaucratic system has been frustrating," the pro-pipeline group Minnesotans for Line 3 said in a statement. "We are disappointed the recent Minnesota Court of Appeals decision that deemed the [environmental impact statement] inadequate on one narrow issue has caused yet another delay to this project."

Approximately 50 people come together to demonstrate against Line 3.
About 50 people come together to demonstrate against Enbridge's Line 3 in Bemidji, Minn., in August 2018.
Monika Lawrence for MPR News 2018

But Frank Bibeau, an attorney representing the Native American-led group Honor the Earth, one of several organizations and tribes that have appealed the pipeline's approval, said the announcement from the state agencies is a positive step.

"Because at a minimum it creates a delay in the process to have to go back and put in the parts that were missing," Bibeau said. "I think that the oil spill analysis for Lake Superior is probably one of the more integral parts of our concerns about water quality and what our fears are about."

Environmental groups and several northern Minnesota tribal governments have fought the pipeline, arguing it risks damage to sensitive lakes, rivers and wild rice beds, crosses treaty territory where Native Americans have rights to hunt, fish and gather, and would exacerbate the impacts of climate change by nearly doubling the amount of oil that the current Line 3 can safely transport.  

But supporters argue a new, modern pipeline would protect the environment by replacing a current pipeline that is aging and corroding and has a greater risk of leaking. They also say the massive project would provide a huge economic boost to counties along the route and to pipeline and construction workers.

Enbridge, as well as pipeline opponents, could choose to appeal the Minnesota Court of Appeals decision on the adequacy of the environmental review. The deadline to file an appeal is July 3.