PUC Opens Final Line 3 Debate: State Remains Firm that Pipeline Isn’t Needed; Enbridge Adds More Concessions

People began lining up two hours before the start of the Minnesota Public Utilities Commission Line 3 hearing in order to get a ticket.

The Minnesota Public Utilities Commission (PUC) today began the first day of the final hearings on the Enbridge Line 3 tar sands crude oil pipeline, with a vote expected later this month. Day One went as well as could be expected for pipeline opponents.

The Minnesota Department of Commerce opened with a strong statement — reiterating its position that the state doesn’t need this pipeline. Meanwhile, Enbridge offered a new list of concessions — possibly an indication executives know their proposal is in trouble.

The PUC has scheduled additional hearings for Tuesday, and next week on Tuesday and Wednesday. A final vote could happen on any of those days, or the hearings could be extended. The PUC will vote on both a Certificate of Need and a Route Permit.

Enbridge Stock Prices Fall Following Line 3 Recommendations; Judge Calls For Something Closer to a True “Replacement Project”

Honor the Earth map of Enbridge Line 3.

Enbridge’s stock price were down 4.7 percent this morning, following the release Monday of an Administrative Law Judge’s recommendations on the Enbridge Line 3 tar sands pipeline through northern Minnesota.

Judge Ann O’Reilly released her  370-page report on Monday, rejecting Enbridge’s preferred new route, but allowing the pipeline to move forward under certain conditions. Her report apparently worried financial markets about the project’s viability. According to the Reuters story: Enbridge shares fall on Minnesota pipeline route ruling.

… the project has run into opposition in Minnesota from the state, along with Native American tribes and environmental activists who have questioned whether the replacement is needed.

Truth be told, Line 3’s supporters and opponents are still scratching their heads to figure out the impact of O’Reilly’s recommendations. One thing is clear, O’Reilly was listening when Line 3 opponents criticized Enbridge’s tactics of calling its new Line 3 proposal a “replacement project” when it’s anything but a replacement project.

Enbridge’s current Line 3 is old and failing. Enbridge’s “replacement project” sought to abandon the old Line 3 in the ground and to build a new and larger Line 3 along a new route.

O’Reilly’s recommendations make Enbridge live up to the term “replacement,” at least in part. They say the only way the project would meet a cost-benefit analysis — and justify a Certificate of Need — would be if the company removed the old Line 3 from its existing trench and used the same trench for the new Line 3.

That is — to actually do something closer to a replacement project. Still, O’Reilly’s recommendations fall short of making this a true replacement project; they allow Enbridge to replace the old Line 3 with a larger pipeline.

So why are the financial markets acting sketchy? It could be because O’Reillys recommended option would cost Enbridge an additional $1.3 billion (the cost of removing the old pipeline). It would also put Enbridge in legal conflict with Ojibwe bands. The new pipeline, like the old pipeline, would cross their lands. Leech Lake has made it clear any efforts to build a new pipeline across their lands would lead to “conflict.”

For more on O’Reilly’s recommendations, see yesterday’s blog: Line 3 Recommendations Puts Burden to Stop Line 3 Squarely on the Ojibwe. O’Reilly’s recommendations now go to the Minnesota Public Utilities Commission (PUC), which is expected to cast final votes in June on Line 3’s Route Permit and its Certificate of Need.

Line 3 Recommendations Puts Burden to Stop Line 3 Squarely on the Ojibwe

People packed public hearings on Enbridge Line 3, like this 2017 hearing in Bemidji.

Administrative Law Judge Ann O’Reilly’s long-awaited report on Enbridge’s Line 3’s crude oil pipeline through northern Minnesota came out late Monday with recommendations that are sure to disappoint the pipeline’s indigenous and environmental opponents as well as Enbridge itself.

The recommendations do not offer a thumbs-up or thumbs-down on the proposed 337 mile pipeline from Kitson County to Superior, Wisc. Instead, O’Reilly recommends giving Line 3 tentative approval, hinging on numerous conditions — but conditions that Enbridge surely will oppose.

[Note: I have not read the full report, which was released in the late afternoon. The following analysis relies on initial reads from MN 350, the Youth Climate Intervenors, and the Sierra Club, a group with which I volunteer.]

Significantly, O’Reilly’s 370-page report rejects Enbridge’s preferred route. The recommendations says the only way the project would meet a cost-benefit analysis — and justify a Certificate of Need — would be if the company removed the old Line 3 from its existing trench and used the same trench for the new Line 3.

O’Reilly’s recommendations would both add significant costs to Enbridge and create an unwinable legal conflict with Ojibwe bands.

Enbridge proposed abandoning the old pipeline in the ground and installing the new pipeline along a new route. (That route would cross the Mississippi River twice, including the headwaters.) O’Reilly’s requirement to remove the old pipeline and use the existing trench would — by Enbridge’s estimate — add $1.28 billion in costs. (See page 8-13 in the final environmental impact statement.)

Further, the old Line 3 cross reservation lands. Reusing that same trench is a non starter. Tara Houska, National Campaigns Director of Honor the Earth, said it in a statement: “Tribal nations have been crystal clear that a new line is not acceptable; there is no economic need for Line 3 and the risk it poses to Minnesota.” So even if Enbridge was willing to fork out the extra $1 billion to remove the old pipeline, it’s highly unlikely it would ever get the needed permission from Native nations to build it.

Lastly, O’Reilly’s report is clear that Native nations have the right to say “no” to any new pipeline through their territory. On page 10 of her report, she writes:

Just like the Commission [PUC] cannot bind the federal government, the Commission does not have the authority to require the Indian Tribes to permit the replacement of Line 3 within the Reservations.

The recommendations now go to the Minnesota Public Utilities Commission (PUC), which is expected to cast final votes in June on Line 3’s Route Permit and its Certificate of Need. O’Reilly’s conditions seem to be deal killers, but unfortunately she doesn’t come out and say that. They leave the PUC some wiggle room. It’s still anyone’s guess how the PUC will vote.

Perhaps the only certainty is that there will be litigation regardless what happens.

Minnesota Dept. of Commerce: Enbridge Has Not Established Need for the Tar Sands Pipeline; Risks Outweigh Benefits

In a tremendous victory for Anishinaabe tribes and those concerned about the environment and clean water, the Minnesota Department of Commerce announced today that energy transportation company Enbridge has not established a need for its proposed tar sands pipeline through northern Minnesota. Further, it said the environmental risks to Minnesota outweigh the economic benefits.

The announcement doesn’t stop the project, but it sets a very high bar for it to receive approval. Here are a few key paragraphs from Commerce’s media release:

Oil market analysis indicates that Enbridge has not established a need for the proposed project; the pipeline would primarily benefit areas outside Minnesota; and serious environmental and socioeconomic risks and effects outweigh limited benefits. …

… the comprehensive 338-page testimony concludes that Enbridge has not established a need for the proposed project in Minnesota as required under state rules. …

The analysis also notes that Enbridge did not provide a sufficient analysis of future demand, and independently finds that “Minnesota demand for refined products appears unlikely to increase in the long term.” …

The testimony also reviews other existing and planned pipelines in Canada and the U.S. and finds that they might be reasonable alternatives to a new Line 3, if a need is demonstrated. …

The testimony also recommends that if a certificate of need is issued, regardless of its decision about removal of the existing Line 3 for its entire right-of-way, the PUC should (where it has regulatory authority) require Enbridge to remove all 223 segments (8,496 feet) of exposed pipeline in Minnesota.

In addition, the testimony analyzes what conditions the PUC [Minnesota Public Utilities Commission] should require if it does issue a certificate of need. These include a stronger emergency response plan; a more secure backup control center; thicker pipe throughout the length of the route; back-up power for shut-off valves; and insurance coverage and financial protections for clean-up of a major release and for decommissioning the pipeline at the end of its useful life.

Comment: The recommendation that Enbridge use a thicker pipe through the length of the route is very significant. Enbridge already has staged pipeline along the route, apparently assuming it would get approval. It appears that this pipeline would not meet standards. It would be very costly to Enbridge to scrap the current pipeline and order new pipe.

Next steps: The final PUC vote on the project is not expected until April 30. The PUC will continuing to hold public hearings around the state on Enbridge Line 3’s route permit and certificate of need. There are two back-to-back hearing in the metro area, both Thursday, Sept. 28, 1-4 p.m. and 6-9 p.m. at St. Paul Intercontinental Hotel, 11 E. Kellogg Blvd., St. Paul. Please attend and let your voice be heard. Today’s announcement from Commerce is very encouraging, but we still need to show up and speak out.

Multiple groups are organizing a march and rally in between the two St. Paul public hearings. The rally will start at 4 p.m. at the Minnesota State Capitol. Here is a Facebook Page for the event, sponsored by Stop Line 3, Youth Climate Intervenors, Young Peoples Action Coalition, Honor the Earth, Minnesota Interfaith Power & Light, MN350, Sierra Club (North Star Chapter), Climate Generation and Power Shift Network.

Commerce also is taking public comments on the adequacy of the EIS until 4:30 p.m. Oct. 2. To learn how to submit comments, click here. In November, the review process shifts to a more judicial format.

Keep reading for the full statement.