How much is it worth to leave an old pipeline in the ground? State regulators reject call to clarify Line 3 removal program
More than 250 landowners who live along an oil pipeline corridor that cuts across northern Minnesota can expect to receive additional information in the mail in the next few weeks about removing those pipelines from their land.
In it, they will be reminded of their options to have the Line 3 pipeline removed from their land — or leave it underground — when Enbridge completes a replacement pipe that’s currently under construction.
But in a hearing Thursday, state utility regulators declined to clarify an order they issued in January 2019 approving a “landowner choice” program, which allows landowners to decide whether they want the pipeline removed or cleaned and kept in place. The Minnesota Public Utilities Commission (PUC) also declined to define what exactly it means for Enbridge to negotiate the terms of leaving the pipe in the ground.
In April, an attorney representing landowners along the pipeline’s current path filed a complaint with the PUC, alleging that Enbridge failed to give landowners required information to help them decide whether to have the pipeline removed from their land, or decommissioned in place.
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At issue is what happens to the old, corroding Line 3 oil pipeline that will be decommissioned when Enbridge completes its replacement for the pipeline. The current Line 3 stretches across 282 miles of Minnesota. Enbridge reports that construction on the new pipeline, which crosses the state along a different route, is about 60 percent complete.
When the PUC first approved the controversial project in 2018, one of the conditions commissioners imposed was to give each of the 998 landowners along the original Line 3 route a choice for how to handle the pipeline on their land: They could allow Enbridge to clean out the pipeline and pay the landowners to leave it in the ground, or they could request that Enbridge dig up and remove the old pipeline, at the company’s expense.
The PUC required the state commerce department to appoint an independent liaison to manage the decommissioning program, and required Enbridge to hire a third-party engineer that landowners could work with to help them make their decision. The PUC also required Enbridge to pay for mediation if agreements couldn’t be reached.
Attorney Evan Carlson, who filed the motion on behalf of the landowners, told the PUC the decommissioning program isn’t working as intended. He said that, aside from his clients, only one landowner has worked with the third-party engineer, a move that he argued “is critically important because it is capable of revealing the price to remove the pipeline, which reveals the landowners’ bargaining power.”
So far, 773 landowners have agreed to Enbridge’s offer to pay $10 per foot of pipeline to decommission the pipe on their land, but keep it in place. Enbridge said that price is based on what it paid landowners in Canada when it replaced sections of the Line 3 pipeline there.
But, Carlson said, according to information he received from the third-party engineer, “that appears to be just 1 percent of the removal costs, allowing Enbridge to save 99 percent, or approximately $1.5 billion.”
But the five-member commission unanimously rejected Carlson’s claims. Commissioner John Tuma, who was instrumental in creating the landowner choice program three years ago, said Enbridge clearly is negotiating with landowners.
“If they make an unreasonable offer, [landowners can tell them to] remove the pipe. It's not like they're walking up to the landowners with a gun and saying you must take 10 cents on the dollar. They're saying, ‘Here, this is what we offered people in Canada. What do you think?’”
Enbridge attorney Christina Brusven told the commission the program is “working as intended.” While most landowners have chosen to accept the offer of $10 per foot to leave the pipeline in place, 38 have requested it be removed. The remaining 223 are considered “in progress,” according to the company’s brief filed with the PUC.
“There are currently no disputes regarding those who have elected removal,” Brusven said. And “For all of those who have entered into agreements to deactivate the pipeline in place, they have represented and agree that they've received all of the information they needed to make that choice.”
The PUC voted unanimously to reject Carlson’s motion to clarify the program. But the commissioners did agree to send a new letter to the landowners who have not yet decided what to do, and to those who have selected removal, reminding them of the availability of a third-party engineer and mediation to resolve any disputes.
Meanwhile, Enbridge says it expects to have the new Line 3 pipeline completed and in service sometime in the last three months of this year.
Landowners have until July 1, 2024 to decide whether to have the old pipe removed.