Minnesota utility regulators have once again thrown their support behind Enbridge Energy’s Line 3 oil pipeline replacement project. On Thursday, the state Public Utilities Commission voted 4-1 to deny petitions for reconsideration filed by several Ojibwe bands, environmental groups and the state Department of Commerce.
The PUC — a five-member panel of state regulators that oversees pipelines and monopoly utilities — rejected arguments from project opponents that they should weigh new evidence that has emerged since they first approved the pipeline two years ago, including a significant drop in oil demand caused by the COVID-19 pandemic.
Instead, after about a half-hour of discussion, the PUC voted to uphold the project’s certificate of need and route permit, reasoning that the benefits of replacing an old, corroding pipeline with a new, modern one, outweighed the project’s implications for climate change and its potential impacts on the lakes, rivers and wild rice beds in the northern third of the state.
“A new pipeline with thicker and safer materials, constructed with up-to-date safety standards by skilled laborers operating under prevailing wage laws, is a better outcome than leaving an old pipeline,” said commission chair Katie Sieben.
It’s been more than five years since Enbridge Energy first proposed replacing Line 3, part of a network of five pipelines that together deliver nearly 3 million barrels of crude oil a day from the oil sands region of Alberta, across northern Minnesota, to Enbridge’s terminal in Superior, Wis.
The pipeline is corroding and has a history of spills, and requires substantial maintenance. Enbridge has already completed the new pipeline in Canada and Wisconsin. But the Minnesota portion of the project, which is now projected to cost nearly $3 billion, has been held up by regulatory and legal delays.
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Environmental groups and tribes have aggressively fought the project on several fronts, arguing that Minnesota doesn’t need the oil the pipeline would carry, that it would exacerbate the effects of climate change and that creating a new pipeline corridor across northern Minnesota threatens the lakes, rivers and forests where tribal members retain rights to hunt, fish and harvest wild rice.
Last year a state court ordered revisions to the project’s environmental review. After that was completed and approved, the PUC again approved a certificate of need and a route permit for Line 3 earlier this year.
The vote from the Public Utilities Commission Thursday upholding that decision could be commissioners’ last word on Line 3, after more than five years of review.
The White Earth and Red Lake Nations, and Mille Lacs Band of Ojibwe, along with Friends of the Headwaters, Honor the Earth, the Sierra Club, the Youth Climate Intervenors — and the Minnesota Department of Commerce — again asked the PUC to reconsider its approval of Line 3.
The groups argued that market forces have changed since Line 3 was first approved two years ago, and that there’s no longer sufficient demand for the oil that the pipeline would carry to justify the need to build it. They also argued that the COVID-19 pandemic has further depressed demand for oil.
Matt Schuerger was the lone commissioner to side with project opponents. He pushed for additional hearings to weigh new evidence on the demand for Canadian oil in light of the pandemic, climate change, the growth in electric vehicle usage and changes Enbridge has made in how it allocates oil shipped on its pipelines.
“In my view, the reliability of the evidence of demand has been reasonably called into question,” Schuerger said. “And I think that the commission should be fully informed about the extent and consequences of these developments before rendering a final decision on the certificate of need.”
Other commissioners did not dispute the short-term drop in oil demand. But they said the drop does not change the long-term need for the new pipeline.
The PUC’s decision to replace Line 3, said Commissioner John Tuma, is predicated on the “regional need for safe, reliable, long term petroleum transportation infrastructure as we continue to transition away from petroleum over the next several decades.”
Commissioners Sieben and Tuma both said they were swayed by testimony from the Leech Lake Band of Ojibwe. The tribe insisted it would not allow a new pipeline to be built across its reservation, and also favored a replacement project, since about 20 percent of the existing Line 3 pipeline currently crosses the reservation.
As a result, the commission ultimately approved a route that follows the existing pipeline corridor to a terminal in Clearbrook, in northwestern Minnesota, but then veers south toward Park Rapids before turning east toward Superior, Wis., bypassing Leech Lake land.
Paraphrasing past testimony from Leech Lake chair Faron Jackson, Tuma said in explaining his decision in support of the project, “we live in a world with pipelines and hard decisions.”
More permits still needed
Line 3 opponents blasted the PUC’s decision. Honor the Earth director Winona LaDuke called the PUC “an embarrassment to Minnesota’s regulatory system,” adding that “the tar sands oil energy sector is tanking during the pandemic,” while “climate change — and the electrification of the transportation sector — are both increasing dramatically.”
The pro-pipeline group Minnesotans For Line 3 said the PUC did the right thing by standing by their earlier decision to approve the project.
“Replacing an aging pipeline with something newer and better made sense five years ago when this process started,” the group said in a statement. “Today replacing Line 3 is even more important because of the jobs it will create at a time of such massive economic challenges.”
Enbridge called the decision “another important step forward for the project,” and said it would create 4,200 construction jobs.
Line 3 opponents are now expected to again challenge the PUC’s approval of the project at the Minnesota Court of Appeals. They were required to first ask the PUC to reconsider its decision before they could file lawsuits.
The Walz administration hasn’t yet said whether it plans to file suit to overturn the approval of Line 3. Since the pipeline replacement project was first approved, the Minnesota Department of Commerce has questioned the need for it, and has argued that Enbridge hasn’t proven there is adequate long-term demand for the oil the pipeline would carry.
Meanwhile, Enbridge still needs construction-related permits from the Minnesota Pollution Control Agency, Department of Natural Resources and the U.S. Army Corps of Engineers before it can begin building the new pipeline. The MPCA has announced its plans to hold additional hearings to gather more information on permits Enbridge needs to build the pipeline across northern Minnesota waterways.
That means that the bulk of Line 3 construction — assuming Enbridge obtains all the approvals it needs to proceed — wouldn’t take place until next year. And project opponents have long promised mass protests to try to block construction of the pipeline if it moves forward.