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Enbridge says current oil market freefall doesn't alter need for Minnesota pipeline

Mike Hughlett, Star Tribune (Minneapolis) on

Published in Business News

COVID-19's battering of the oil market is a "short-term" disruption that doesn't alter the need for Enbridge's Line 3 pipeline across northern Minnesota, the company told utility regulators in a filing Monday.

Pipeline opponents last month called on regulators to reverse their approval of the $2.6 billion Line 3, saying it was even more unnecessary now that the Canadian oil industry had imploded and crude demand had collapsed worldwide.

Enbridge, in its filing, acknowledged "the pandemic has disrupted lives and economies across the globe. However, the "new information" provided by these longtime Project opponents as to energy demand or consumption fails to support any claim that the Project is not now needed."

Enbridge's new pipeline would replace its aging Line 3, transporting crude from Alberta to Superior, Wis.

The Minnesota Public Utilities Commission (PUC) reapproved new Line 3 in February, a do-over vote needed because an appeals court shot down the PUC's blessing of the project's environmental impact statement, or EIS. The PUC later approved a retooled EIS.

Environmental groups -- Friends of the Headwaters, the Sierra Club, Honor the Earth and Youth Climate Intervenors -- filed last month for a Line 3 "reconsideration," as did the Red Lake and White Earth bands of Ojibwe and the Minnesota Department of Commerce.

It's uncommon for the PUC to reverse its decisions after receiving reconsideration petitions. However, the petitions often serve as a precursor to challenging a PUC decision before the Minnesota Court of Appeals.

The Commerce Department, which also opposed the PUC's first Line 3 approval in June 2018, said the commission failed to adequately determine the accuracy of Enbridge's long-term oil demand forecasts.

In its filing Monday, Enbridge said the "PUC has considered and rejected the core claim of "lack of a forecast" multiple times before and should do so again."

 

The environmental groups and tribes also made claims about faulty forecasts, but brought in new arguments based on the oil downturn caused in part by the coronavirus pandemic.

While the oil industry has been troubled around the world, Canada's relatively high-cost oil sands have been hit particularly hard.

Enbridge has said the pipeline is a critical safety enhancement. The current Line 3 is corroding and therefore running at only half capacity. The new pipeline would restore full oil flow.

Environmental groups and some Indian bands have said the pipeline -- which follows a new route -- would open a new region of pristine waters to the prospect of oil spills, as well as abetting increased greenhouse gas emissions.

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