Enbridge faces US hurdle

Gary Park

Petroleum News

Doubts now hang over market plans for another 760,000 barrels per day of Alberta oil sands crude on top of the 590,000 bpd of additional shipments planned for Trans Mountain.

The latest setback occurred when a Minnesota administrative law judge rejected Enbridge’s preferred route for its Line 3 replacement covering 1,097 miles from Alberta to Superior, Wisconsin, leaving the Minnesota Public Utilities Commission to make a final decision in June.

Judge Ann O’Reilly agreed there was a need for the largest project Enbridge has ever undertaken, but also cited shifting energy demands and concerns over the company’s plan to leave its existing line in the ground. Enbridge had previously said any suggestion of replacing the old line was impractical and cost prohibitive.

O’Reilly said that approval of the new routing across northern Minnesota and Wisconsin would leave open the possibility of two lines being abandoned when they were no longer economically useful.

She said the argument against new oil pipelines is valid “in a carbon-conscious world moving away from fossil fuels, a move that Minnesota aspires to follow.”

Enbridge spent US$5.3 million last year on lobbying efforts in Minnesota, “largely due to the intensity of the regulatory process” that included participating in 22 Department of Commerce public meetings and three weeks of evidentiary hearings, and countering arguments by two Ojibwa reservations, Greenpeace, the Sierra Club and Honor the Earth, some of whom have threatened to repeat the protests in North Dakota against the Dakota Access pipeline.

The Minnesota Department of Commerce has argued that the existing Enbridge line should be shut down entirely, while the Sierra Club said the pipeline “runs contrary to the interests” of Minnesotans by increasing capacity for “tar sands oil, the most carbon-intensive and polluting form of oil.”

Jobs for Minnesotans, an umbrella group representing business and labor interests, endorsed the construction of the “much safer” Line 3 that would have a direct economic impact on 6,500 jobs and C$20 million in annual tax revenue for municipalities.

Nancy Norr, co-founder of the group, said that even though Minnesota is moving forward with renewable energy, it must “ensure we still have reliable supplies of both electricity and transportation fuel.”

The Canadian government approved Line 3 in late 2016 and work has already started on the Canadian side of the border.

- GARY PARK