In the latest twist to the saga of the Line 3 oil replacement project, the Walz administration is challenging the proposed pipeline in court.
The Minnesota Department of Commerce announced late Tuesday it intends to challenge the state’s approval of the pipeline at the Minnesota Court of Appeals, arguing that Enbridge Energy failed to prove that there’s adequate demand for the oil that the proposed line would carry.
Enbridge is proposing to replace its existing Line 3 — which, at nearly 60 years in operation, is deteriorating and can only transport about half the oil it was designed for — with a new, larger line along a different route across northern Minnesota.
The Minnesota Public Utilities Commission, which regulates state utilities and pipelines, gave the Line 3 project its stamp of approval for the second time earlier this year. The PUC originally granted a required certificate of need and route permit for the project in 2018, but had to vote again on the proposal after a court ordered that the project’s environmental review needed to be revised.
Gov. Tim Walz was under pressure from pipeline opponents — who urged him to continue the state’s appeal of the pipeline, first launched under former Gov. Mark Dayton — and from the project’s supporters, who argued the line has already been thoroughly vetted, approved twice, and deserves to move forward.
Here are four things to know about this point in the project.
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1) This is the Commerce Department’s third appeal of Line 3.
The Minnesota Department of Commerce — which acts as the public interest advocate in matters before the Public Utilities Commission — argues in its challenge that Enbridge Energy has failed to prove there is sufficient demand for the oil that a new Line 3 pipeline would carry.
That’s an argument the agency has made for several years, dating back to the administration of former Gov. Mark Dayton.
Enbridge has relied on a supply forecast in its pitches to state regulators about the demand the new Line 3 would be built to fill. A supply forecast is the amount of oil that Canadian producers predict they will want to ship through the pipeline. Enbridge points out that the PUC has accepted that forecast multiple times.
But the Commerce Department has argued that state statute requires the company to submit a long-term demand forecast of how much oil that refineries in the Midwest and Gulf Coast say they’ll need from Line 3, which the agency says would be a more accurate prediction of demand.
2) The state has already approved Line 3 — twice. But the regulatory process continues.
In 2018, the Minnesota Public Utilities Commission voted to approve a Certificate of Need — which affirms that the project will fill a need in Minnesota — and a route permit for Line 3.
Commissioners determined that the safety benefits of building a new pipeline to replace the old, 1960s-era Line 3 that currently crosses the state outweighed the project’s climate change impacts — and the opposition of many tribes and environmental groups.
Following that approval, many groups, tribes and the state Department of Commerce challenged that approval in court. Several groups also challenged the adequacy of the project’s environmental review, known as an Environmental Impact Statement.
In ruling on those challenges, the Minnesota Court of Appeals upheld most of that environmental review, but ruled that it failed to adequately consider the impacts of a potential spill into the Lake Superior basin. That ruling essentially invalidated the PUC’s first approval. The court ordered the Commerce Department, which had conducted the original environmental review, to revise it.
Earlier this year, after accepting the Commerce Department’s revised environmental review, the PUC again approved Line 3.
Now, groups like Friends of the Headwaters, Honor the Earth and the Sierra Club, the White Earth Band of Ojibwe, the Red Lake Nation and the Minnesota Department of Commerce —ating in its role as public interest advocate in matters before the PUC — are re-filing their challenges to the pipeline at the Minnesota Court of Appeals.
Meanwhile, Enbridge still needs additional permits from the Minnesota Pollution Control Agency, the Minnesota Department of Natural Resources and the U.S. Army Corps of Engineers before it can begin construction on the pipeline.
A state administrative law judge will hold a contested case hearing next week on the MPCA permit — a water quality certification — which focuses on how Enbridge plans to safely construct the pipeline across lakes and streams in northern Minnesota.
The MPCA must make its permit decision by Nov. 15, which would then trigger a decision from the U.S. Army Corps of Engineers on its own permit.
Enbridge officials say they hope to begin construction before the end of 2020. The company says construction would take 6 to 9 months.
3) The Line 3 project has generated a complicated cast of supporters and opponents.
Honor the Earth and White Earth Nation attorney Frank Bibeau said Line 3, arguably, “has become the most important pipeline fight in the country.”
It’s the latest in a string of controversial pipeline proposals that have garnered national attention — including the Keystone XL and Dakota Access pipelines. The latter led to the massive protests at Standing Rock.
The Line 3 project has united a diverse group of opponents, including activists fighting global climate change; tribal governments and Native activists concerned about the pipeline’s proposed route through land where tribal members maintain treaty rights to hunt, fish and gather wild rice; and northern Minnesota groups concerned about the potential for oil spills into lakes and rivers.
PUC Commissioner Matt Schuerger initially supported Line 3 when the commission first voted in 2018. But he opposed it in February, arguing the science of climate change had become much clearer during the year and a half between his votes.
“It no longer makes sense to invest and build new infrastructure such as this project,” Schuerger said, which would lock in the transportation and burning of additional fossil fuels for decades.
But the decision isn’t simply about climate, argued fellow commissioner Katie Sieben.
"This is about the reality of the situation that is in northern Minnesota right now — that there is a deteriorating, decrepit old pipe," she said. She argued that building a new pipeline is preferable to continuing to operate the 1960s-era pipeline, which is corroding and requires extensive maintenance.
The proposal has also divided tribal governments in Minnesota. The Leech Lake Band of Ojibwe has long supported replacing the existing Line 3, because the current pipeline cuts through the Leech Lake Indian Reservation. The new pipeline would follow a different route around the reservation, and would remove the old pipe from beneath tribal lands.
The Fond du Lac Band of Lake Superior Chippewa initially opposed the project, but after the project won PUC approval, the band reached an agreement with Enbridge to allow the new pipeline to be built on reservation land, rather than through an environmentally and culturally sensitive off-reservation area.
The Red Lake Nation and the White Earth and Mille Lacs bands of Ojibwe have steadfastly opposed Line 3, as have Native groups like Honor the Earth.
Meanwhile, business and labor groups have aggressively lobbied on behalf of the nearly $3 billion project, citing the thousands of construction jobs it is projected to create, and the millions of dollars in property tax revenue it’s expected to generate for the counties through which the pipeline would cross.
At the state Legislature, Republican lawmakers have also pushed strongly for the project. But the issue has divided Democrats. A handful of northern Minnesota Democrats support Line 3, but more than 30 DFL lawmakers signed a letter recently asking the MPCA to deny construction permits for the pipeline.
4) The Commerce Department appeal might cost its commissioner his job.
The Walz administration’s decision to continue fighting Line 3 could lead to the ouster of Commerce Commissioner Steve Kelley.
Republican Senate Majority Leader Paul Gazelka said he was surprised and disappointed by Kelley’s latest appeal of the project.
The commissioner was already under scrutiny by Senate Republicans. Kelley is scheduled to appear before two Senate committees Friday for a confirmation hearing. Gazelka said the hearing on Kelly is important. But he would not say whether a full-Senate vote is coming to oust the commissioner.
“I want to look at every situation objectively,” Gazelka said. “But this was a very big deal, a bipartisan big deal that we actually thought was going to be done that is now going the opposite direction. The jobs aren’t there, the promises weren’t kept and so now we’re going to reevaluate.”
Last week, Senate Republicans voted to oust Department of Labor and Industry Commissioner Nancy Leppink. They also have a hearing this month to discuss pollution control agency commissioner Laura Bishop.
MPR News reporter Tim Pugmire contributed to this report.