Eighteen Criticisms of the PUC’s Approval of the Enbridge Line 3 Tar Sands Pipeline

The Minnesota Public Utilities Commission (PUC) failed Minnesota citizens and Native nations by approving the Enbridge Line 3 tar sands crude oil pipeline through northern Minnesota. The PUC seemed to bend over backwards to favor international corporate interests over Minnesota’s interests. At the same time, it seem to cave into Enbridge’s thinly veiled threat to keep running the old and dangerous Line 3 if the new Line 3 wasn’t approved.

Here are 18 flaws in the PUC’s decision and its process.

1. 

   The current Line 3 is blue, the proposed reroute is in red. Light green shaded area reflects the “ceded lands” where bands retain rights to hunt, fish and gather.

   Systemic Problem I: Representation. The PUC suffered from a lack of diversity. It’s an obvious statement but it needs to be said: All five PUC commissioners are white. Several commissioners  admitted during final deliberations that they didn’t understand the indigenous experience. They wouldn’t have acknowledged it if they didn’t think it was important. In a letter to the PUC, the Minnesota Pollution Control Agency (MPCA) said all proposed Line 3 routes would harm poor people. According to its letter: all routes, “will have disproportionate and adverse impacts on environmental justice communities, including low-income and minority populations. … [Enbridge’s preferred route] crosses 155 miles of areas of concern for environmental justice, or 46 percent of the route, affecting 24,909 low-income people.” This permitting process is a trial of sorts with major consequences to indigenous people and poor people. It’s reasonable for them to expect it to be heard by a jury of their peers. The PUC needed more diversity — indigenous people and/or people of color — people who have a broader understanding and perspective for what this project means to impacted citizens.

2. Systematic Problem II: With pipeline construction imminent, treaty rights — the supreme law of the land — still haven’t been addressed: Native nations repeatedly said the new Enbridge Line 3 would violate their treaty rights to hunt, fish and gather on lands the new pipeline would cross. The PUC isn’t the correct venue to litigate treaty rights, but the PUC should not have ignored them, either. The system has put treaty rights at the end of the line. At a minimum, Commissioners should have made Line 3’s final approval conditional on resolving treaty rights issues. It did not.
3. The PUC downplayed the pipeline’s impacts on indigenous culture, sacred sites: The PUC approved Line 3 without a completed Tribal Cultural Survey, which would identify sacred sites and burial grounds and avoid them. The PUC treated this survey as an afterthought rather than core part of the process to choose the best route. This should have been an integral part of the process and completed before a final vote on Line 3’s route.
4. Climate Change Problem I: The PUC seemed to ignore Line 3’s climate change impacts. The environmental impact statement (EIS) estimated the “social costs of carbon” from this project at $287 billion over 30 years. The Administrative Law Judge’s report confirmed that number. The MPCA sent a letter to the PUC citing the $287 billion figure. No Commissioner made the case that Line 3’s benefits would offset that $287 billion cost. Akilah Sanders-Reed, one of the 13 Youth Climate Intervenors, told Commissioners before the vote: “If you approve Line 3, you will be accepting not only the climate damages from this project, but a fundamental world view that says climate action was only ever lip service and never going to be a reality.” The PUC gave climate change lip service.

5. 

   Commissioner Matt Schuerger

   Climate Change Problem II: At least one Commissioner seemed to wrongly conclude he couldn’t factor climate change into the Line 3 decision:  The Administrative Law Judge concluded that approving the new Line 3 “does not further the renewable energy goals of this state and should be viewed as a negative in the application.” Commissioner Matthew Schuerger agreed — then voted for the project anyway. The state gave the PUC specific directions about reducing carbon emissions for electric utilities, he said, but the PUC’s “statutory authority regarding pipelines is specific and it’s limited.” He seemed to argue that issues of greenhouse gas emissions were off the table for discussion because it was not specifically stated in law. None of the other commissioners challenged his analysis. They got it wrong. The PUC’s balancing test rules say the Commission’s analysis needs to include Line 3’s impact on “the natural and socioeconomic environments.” This rule provides the latitude needed to consider climate change. The PUC needlessly chose to handcuff itself.

6. 

   Commissioner Dan Lipschultz

   The PUC caved into a safety threat that was not its responsibility to solve. Throughout the process, Enbridge took what seemed to be contradictory positions, both that the old Line 3 needed to be replaced because it wasn’t safe, and that it would continue to operate the old Line 3 if the PUC didn’t approve the new pipeline and could do so safely. Two of the five commissioners said they voted to approve the new Line 3’s Certificate of Need out of fear the old Line 3 would rupture and they would feel responsible. Commissioner Dan Lipschultz called it a “gun to the head.” Chair Nancy Lange said her worry over the old Line 3 spilling was the deciding “pebble on the scale.” The PUC linked two decisions that should have stood separately:  The PUC is not responsible for what happens to the old Line 3. That is the responsibility of the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration. If the PUC thought the old Line 3 was dangerously unsafe, it should have taken its concern to the proper authorities and shut it down. It should have voted on the new Line 3 on its merits. Instead, it used this “Spill Fear” as a pretext to approve the new Line 3.

7. The PUC approved a deeply flawed Environmental Impact Statement (EIS): Thanks to Friends of the Headwaters, the PUC was forced to complete an EIS on Line 3, a first for a Minnesota pipeline project. While the EIS was a good start it was flawed. Line 3 opponents challenged it on many grounds, including its inadequate analysis of route alternatives and the lack of information on spills at specific sites. Multiple organizations filed objections to the final EIS, including Honor the Earth, the Mille Lacs Band of Ojibwe and the Fond du Lac Band of Lake Superior Chippewa, Friends of the Headwaters, and the Youth Climate Intervenors.

8. 

   A Block (Line 3) Party in front of the PUC offices showed strong opposition to the project.

   The PUC ignored the overwhelming public opposition to this project: Public Testimony on Line 3 overwhelmingly opposed it: Of the roughly 72,000 comments, 68,000 or 94 percent were thumbs down. While it isn’t definitive in the decision, it should mean something. In Chair Lange’s terms, this level of public engagement should be at least “a pebble on the scale” to reject the project. This level of public participation didn’t seem to make any difference, not a pebble.

9. The PUC staff issued its own last-minute recommendations and the public had no chance to respond. The public engaged for months with Administrative Law Judge Ann O’Reilly, who handled the pubic testimony and the contested case hearing. She was the public face of the debate. In her report, she recommended against Enbridge’s preferred route and all other route options except rebuilding in the same trench. Otherwise, the costs outweighed the benefits. The intervening parties had the opportunity to respond to O’Reilly’s report, and they did. The PUC staff, which has worked behind the scenes for this process, released its own recommendations at the 11th hour, recommendations that ran counter the Administrative Law Judge’s recommendations. Significantly, the PUC staff took a unique approach to the climate change issue. It said that failing to build a new Line 3 would create more environmental damage than not building it — because oil would still get to market by other, more polluting means. By this logic, it seems impossible to ever say “No” to a pipeline project. The logic is: Pipelines are more efficient than other forms of transportation so all pipelines are good. The PUC staff made an overly broad analysis. It’s arguing that the PUC is responsible for every decision made in the crude oil transportation world. It is not. The PUC was responsible for approving or rejecting Line 3 and it made the wrong choice.
10. The PUC mostly ignored the Administrative Law Judge’s Report, apparently based on the PUC staff recommendations: Neither the public nor the intervening parties had an opportunity for a formal response to the PUC staff’s recommendations. From the outside, it looks like the PUC staff is running the show, not the Commission. This undermines public trust in the system and the belief that public participation matters.
11. The PUC staff showed bias against Line 3 opponents: PUC staff had police evict two staff and a volunteer from organizations opposed to the pipeline, threatening arrest for trespass. At issue was distribution of tickets to get into packed hearing rooms. The PUC staff had not been clear on its rules, and didn’t give staff from the Sierra Club or MN 350 any warning about consequences. Using police was a gross overreaction and gives the impression of bias, and probably reflects a real antipathy to those opposing the pipeline. More here: Eroding Public Trust, PUC Staff Has Police Evict Sierra Club, MN 350 Staff from Line 3 Hearing without Justification.

12. 

    Minnesota sales of refined petroleum products has been on the decline.

    The PUC ignored the Minnesota Department of Commerce’s analysis that Enbridge had failed to prove the pipeline was needed. Commerce was clear that Enbridge had failed to prove need. During final deliberations, Commissioners Lipschultz and Schuerger agreed that Enbridge’s data lacked transparency and didn’t address the core question of need. Lipschultz said the rules needed to be improved. The PUC hung its decision to approve the Certificate of Need on the issue of “apportionment,” an industry term referring to the fact that crude oil buyers did not get all the oil they requested, so their requests were “apportioned” (meaning they got some percentage of their total request.) The problem is real but inflated. Oil buyers knew they will not get everything they need, so they ask for more than they need. The Administrative Law Judge also disputed key parts of Enbridge’s expert testimony on the demand for crude oil — the essential facts the company needs to justify building a new pipeline. The PUC overlooked these criticisms. (Note: the United States is importing more crude oil than it needs. We are now exporting refined petroleum, and much of the Line 3 oil is effectively destined for foreign markets.)

13. The PUC glossed over Minnesota Department of Natural Resources (DNR) concerns. The DNR said it had reviewed Enbridge’s Environmental Protection plan “and determined that it is too general to be relied upon …” (See: DNR filed comments with the PUC on the Administrative Law Judge’s report.) The DNR also raised concerns around wetland protection. It said Enbridge intends to seek a federal “utility line exemption” from the state’s Wetland Conservation Act (WCA). Enbridge can get that exemption from the U.S. Army Corps of Engineers. According to the DNR: “Presumably the Corps will only address wetlands that are waters of the United States, thus potentially leaving WCA wetlands that are not determined to be waters of the US unregulated.”

14. 

    PUC Chair Nancy Lange

    This vote will result in civil unrest, an issue the PUC acknowledged but gave little weight. PUC Chair Lange discussed the elephant in the room when she said: “What concerns me is permitting something that creates civic disruption.” She briefly asked Enbridge to consider another, longer route option to avoid protests, but she made more of a plea than demand. Her effort didn’t last long and lacked energy and conviction. The result was predictable. After the vote, Winona LaDuke, founder of Honor the Earth, said she and others had worked within the system for the past years and the system now appears broken, with the PUC rejecting the analysis of both the Administrative Law Judge and the state Department of Commerce. Now: “They have gotten their Standing Rock,” LaDuke said.

15. The PUC never did a quantitative cost-benefit analysis to justify its decision. The PUC is supposed to do a balancing test to see if the benefits of approving the project outweigh the cots. The PUC didn’t analyze the costs of marginal harm to efficiency and reliability in the crude oil system and compare it so such things as the $287 billion social costs of carbon pollution or the spill risks. Apparently the mere fact that there were some unquantified efficiency and reliability problems overrode all else.
16. The PUC allowed Enbridge to modify its proposal after it closed the record. After the contested case hearing closed, the record was supposed to be closed to new information. The PUC allowed Enbridge to add several deal sweeteners after the deadline. Enbridge promised it would buy renewable energy credits, create a trust fund to decommission old pipelines, and provide a corporate guarantee to clean up spills. This last-minute proposal skewed the debate in Enbridge’s favor. If Enbridge had been serious about these concessions, it would have offered them up front when they could have been scrutinized on the record. As it was, the PUC inappropriately allowed them into the record and devoted a significant part of its final deliberations to them. The Sierra Club has filed a complaint.

17. 

    Commissioner John Tuma thinks that giving law enforcement a little extra money will solve the sex and drug trafficking. It won’t.

    The PUC approved a construction project it knows will increase sex and drug trafficking. The project’s Environmental Impact Statement said (Chapter 11 page 20-21): “Concerns have been raised regarding the link between an influx of temporary workers and the potential for an associated increase in sex trafficking, which is well documented, particularly among Native populations. … The addition of a temporary, cash-rich workforce increases the likelihood that sex trafficking or sexual abuse will occur. Additionally, rural areas often do not have the resources necessary to detect and prevent these activities.” If the children of people in power were threatened with these realities, the vote likely would have turned out differently. Commissioner John Tuma acknowledged the problem, and proposed that Enbridge contribute to an independent fund to help local communities with “enforcement on the ground to address sex trafficking and drug trafficking.” This sounds good, but it doesn’t appear that Enbridge took this issue seriously. Brent Murcia of the Youth Climate Intervenors reminded told the PUC that Enbridge had previously testified that the company didn’t have a plan for how to deal with sex trafficking issues. Further, the company had committed to provide a plan for parties to review during Line 3 deliberations. “That has unfortunately not happened,” Murcia said. This appears to be more lip service.

18. 

    Clean up at Enbridge’s Kalamazoo spill (2010). (Photo: U.S. Environmental Protection Agency.)

    The PUC ignored Enbridge’s track record of spills, lax oversight: The Administrative Law Judge’s report identified several key areas where Enbridge’s flawed arguments undercut its credibility as an honest broker of information. For example, she found Enbridge’s environmental assessment neither credible nor persuasive. She said it ignored the culture impacts the project would have on the Anishinaabe people. Throughout the process, pipeline critics reminded the PUC about Enbridge’s track record of major spills in Grand Rapids, Minnesota and the Kalamazoo River in Michigan. This year, Enbridge was hit with a $1.8 million fine for its failure to meet pipeline inspection deadlines. (News story here.) Enbridge also withheld information from the state of Michigan about problems with Line 5, the portion which passes underwater in the Straits of Mackinack (between Lake Huron and Lake Michigan). (News story here: Enbridge says it knew about pipeline damage 3 years ago.) During the PUC debate, the PUC seemed to convince itself that Enbridge would not use the heavy-handed private security response Energy Transfer Partners used for the Dakota Access Pipeline. Then Winona LaDuke spoke to remind the PUC that Enbridge purchased 28 percent of the Dakota Access Pipeline and the violence continued at Standing Rock: “I called Enbridge,” she said. “I called their community relations officer and I asked them to call off the dogs. I asked them to demilitarize the situation knowing full well that Enbridge had in fact stabilized Energy Transfer Partners which was looking for money. … I got no response from Enbridge. We have no confidence in this. … We only have experience with Enbridge on the other end of a gun.”

The PUC is not expected to issue its final order for several weeks. Then the legal appeals start.