Line 3’s almost done, but the promised Decommissioning Trust Fund still isn’t in place

In 2018, Enbridge proposed, and the PUC accepted, the creation of a Line 3 Decommissioning Trust Fund to pay for the removal and clean up of the new Line when its taken out of service.

It’s been three years, and that agreement’s still in limbo. The Minnesota Department of Commerce has contested Enbridge’s language and it’s yet to be resolved.

Close-up of the corrosion on a section of exposed Enbridge pipeline. (Photo by John Ratzloff)

Back in 2018, Line 3 opponents pressed the PUC to require Enbridge to remove the current and failing Line 3 as part of its permit. (They cited the Kindergarten Rule: “Clean up your old mess before you make a new one.”)

The PUC declined. And while Enbridge proposed a Decommissioning Trust Fund for the new Line 3, it’s important to remember that it never got public scrutiny.

Enbridge pitched the Decommissioning Trust Fund along with other deal sweeteners as a last-minute effort to woo PUC support for Line 3. It made its proposals after the public record closed. Line 3 opponents had no chance to review or comment on the plan.

If Enbridge had been serious about making a good-faith offer to create a Decommissioning Trust Fund, it would have done so at the beginning of the process, not the end.

The Sierra Club and other organizations filed a Complaint in 2018, saying Enbridge should not have been allowed to change its proposals after the public record closed. The complaint read in part:

After the development of one of the most extensive evidentiary records before the Commission and at the eleventh hour before a final Commission decision, Enbridge seeks to strengthen its application … by introducing into the record new commitments it promises to adopt — although they still remain to be developed in sufficient detail for the Commission and the parties to review. At this point, however, it remains totally unclear how that can be done — not just as a practical matter, but as a legal matter. The findings of an Administrative Law Judge (“ALJ”) were that, based on the evidentiary record, the environmental and socio-economic impacts and risks of Enbridge’s proposed project for a new Line 3 pipeline (“Project”) outweigh its very limited benefits.

As in just about every other instance in the Line 3 case, the PUC sided with Enbridge.

The state needs to examine closely Enbridge’s cost estimates to decommission Line 3.

Enbridge estimated it would have cost $1.28 billion to decommission the existing old and failing Line 3, according to the state’s Line 3 environmental impact statement (Chapter 8, page 17).

In contrast, Enbridge estimated it would only cost $983 million to decommission the new Line 3 when the time comes, according to its Oct. 16, 2018 PUC compliance filing.

The old Line 3 is 282 miles long. The new Line 3 is 330 miles long, or 48 miles longer. Yet Enbridge estimated it would cost roughly $300 million more to remove the shorter pipeline.

My theory, Enbridge lowballed the cost for decommissioning the new Line 3 so it wouldn’t have to put as much money into the Trust Fund.

(Enbridge has the money. It just paid $3 billion in cash to acquire the largest crude export terminal in North America, Reuters reported this week.)

Lastly, the PUC gave up bargaining leverage by not requiring a signed Decommissioning Trust Fund agreement before Enbridge could start Line 3 operations. Neither Minnesota statutes or rules “require a decommissioning plan or escrow account before beginning construction or operation of a pipeline,” PUC Executive Secretary Will Seuffert said in an email.

Still, it seems the PUC could have added that condition to the permit. Why give up leverage?

It has been clear throughout the process that the laws and rules are weak and created to favor corporations over the public interest.

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