The PUC Fog Machine: Commission Selectively Uses Line 3’s Environmental Analysis, Favoring Enbridge

The Minnesota Public Utilities Commission (PUC) selectively used environmental information to approve the Enbridge Line 3 crude oil pipeline through northern Minnesota. The Commission’s analysis undermines its credibility, making it nearly impossible to view it as an impartial and fair decision maker.

Line 3’s final environmental impact statement (FEIS) estimates the pipeline would create $287 billion in climate change costs over the next 30 years, or nearly $10 billion annually. That number alone should have put the brakes on the project. The PUC’s Sept 5 order swept aside these huge costs with the thinnest of justifications. The PUC cherry-picked information from the environmental impact statement to undermine the report’s climate science, referred to as the “social cost of carbon.”

What the PUC failed to tell the public is that the federal government finds the “social cost of carbon” analysis “a useful measure.” Further, the $287 billion figure likely underestimates the true climate change costs from Line 3, according to information in the environmental impact statement.

To put things bluntly, the PUC selectively used facts to approve a project that would allow Enbridge to make short-term profits by shifting the pipeline’s long-term climate change costs onto the rest of the world, costs such as lost agricultural production and flood damage.

The PUC consistently has made decisions that favor Enbridge.

Minnesota’s Native nations opposed Line 3 because they said it violated their treaty rights. The PUC simply ignored the treaty rights issue, allowing the project to proceed. The administrative law judge (ALJ) reviewing the project recommended against Enbridge’s preferred route. The PUC approved it anyway, rejecting those part of the ALJ’s report that conflicted with its decision. The Minnesota Department of Commerce argued the PUC should reject Line 3 because Enbridge’s application didn’t include the future oil demand forecasts to justify the project — information required by law. The PUC put the burden of proof on pipeline opponents to show the demand for oil didn’t exist. You get the picture

The PUC’s dismissal of climate change arguments is particularly informative. It shows the extent to which the PUC is willing to skew information to help Enbridge.

First, start with the source documents. The $287 billion “social cost of carbon” estimate is included in Chapter 5 of the Line 3 final environmental impact statement (FEIS) — a document the PUC voted to approve. (See table 5.2.7.12 on page 5-466.) The Administrative Law Judge’s Line 3 Final Report affirms the $287 billion estimate (see finding of fact 676, page 196).

Hurricane Frances, 2004. (Photo by NASA.)

The PUC apparently thought so little of these experts and climate change concerns it dismissed them on footnote 147 of its order (starting on page 28 and continuing on page 29). In this footnote, the PUC quotes from the environmental impact statement about the “social cost of carbon” calculation:

“Note that there are assumptions and data limitations in the characterization of life-cycle [greenhouse gas] emissions that vary between studies [on the social cost of carbon]. As a result, the [greenhouse gas] emissions can differ substantially from one study to the next. Since the studies reviewed do not consistently disclose the details of their analysis, and often rely on proprietary models and data, a thorough assessment of the reasons for this variability is not possible.” (FEIS, page 5-466)

The PUC’s selective use of this paragraph makes it sound like the “social cost of carbon” science is hopelessly flawed. Based on that one paragraph — and without further justification — the PUC rejects the $287 billion estimate of Line 3’s climate costs.

Look five pages earlier in the same Chapter 5 and you will find a paragraph the PUC conveniently omits from its order:

EPA [Environmental Protection Agency] and other federal agencies use the SCC [social cost of carbon] to estimate the climate benefits of rulemakings. The SCC is the total cost to society arising from man-made emissions of CO2 and other GHGs [green house gases]. It is typically measured in U.S. dollars per metric ton of CO2 or CO2e. The SCC is meant to be a comprehensive estimate of climate change damages. It includes changes in net agricultural productivity; human health; property damages from increased flood risk; and changes in energy system costs, such as reduced costs for heating and increased costs for air conditioning. Given current modeling and data limitations, however, it does not include all important damages. [Emphasis added.] Nonetheless, EPA (2016h) reports that the SCC is a useful measure to assess the benefits of CO2 reductions. (page 5-461)

Two takeaways:

  • The EPA and other federal agencies find the social cost of carbon analysis “a useful measure.”
  • Given “current modeling and data limitations,” the “social cost of carbon” analysis doesn’t include all important damages. So the problem is that the analysis underestimates the costs of climate change. That means the FEIS’s $287 billion estimate most likely is low.

One inference:

  • If the experts who wrote the environmental impact statement didn’t think science justified the $287 billion figure, they wouldn’t have included it in the report. It’s stunning that the PUC so casually dismissed that expertise.

A question:

  • The PUC had access to both statements in the environmental impact statement. One cautioned that the “social cost of carbon” analysis had “assumptions and data limitations.” The other acknowledged that the federal government found it to be “a useful measure.” Why did the PUC use the statement that favored Enbridge and omit the one that favored the public interest?

Comment: The public should be concerned about the PUC’s selective use of information. The PUC seems to be looking for facts to justify its decision rather than using facts to arrive at its decision.

PUC Blames Climate Impacts on Consumers, Not Line 3

The PUC also tries the “pipelines-don’t-cause-climate-change, people-cause-climate-change” argument.

The PUC argued that if it denied the Line 3 permit, the oil would get to market anyway. Therefore, denying Line 3 won’t help the environment. Here’s how the PUC explained it :

[The analysis of Line 3’s environmental costs] include emissions from ultimate consumption of the oil transported over the Project. These costs do not result directly from the [Line 3] Project, but instead result from the continued demand for crude oil to produce refined products used by consumers.

The record evidence does not support a conclusion that denial of the certificate of need will significantly reduce demand for crude oil. Instead, the evidence establishes that the most likely result of denial will instead be increased transport of crude oil via more dangerous means such as rail, and continued use of the deteriorating Existing Line 3. (Page 29 of the PUC order)

Comment: Using this logic, the PUC could never say “no” to a pipeline on environmental grounds. All pipeline supporters would have to say is that the oil would get to market anyway so ignore the climate impacts.

This argument fogs the real issue of accountability. It might be true that another government or company will decide to increase oil transportation by some other method. That’s on them. The PUC is not responsible for those decisions. The PUC needs to use its power over the things it can control — and that’s the Line 3 permit.

The PUC needs to stand firm against climate change, reconsider its vote, and reject Line 3.

2 thoughts on “The PUC Fog Machine: Commission Selectively Uses Line 3’s Environmental Analysis, Favoring Enbridge

  1. Excellent work you are doing to report this issue! We’ll be sharing these articles with people in our social circles, including macalester plymouth united church.

    Roberta

    Like

  2. […] Here’s where the PUC comes in. It just approved the Enbridge Line 3 pipeline, and did so by rejecting climate science and any responsibility for the fact that the fuel the pipeline carries will eventually get burned. (See our earlier blog: The PUC Fog Machine: Commission Selectively Uses Line 3’s Environmental Analysis, Favoring Enbrid….) […]

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