Enbridge gets OK to rebuild Line 3 pipeline through Minnesota

ST. PAUL, MINN. A Minnesota regulator approved a certificate of need for Enbridge Inc to rebuild its Line 3 oil pipeline on Thursday, angering environmentalists but offering hope to Canadian oil producers that have struggled to move crude to refiners.

The Minnesota Public Utilities Commission’s decision clears the final hurdle, pending possible appeals, in Enbridge’s three-year effort to rebuild its aging, corroded 1,660-kilometre pipeline that runs from Alberta to Wisconsin.

The commission has not yet decided on the route for Line 3 through Minnesota. The certificate has conditions, including that Enbridge make a financial guarantee to clean up any environmental damage and that it removes at landowners’ request pipeline that is no longer in use.

Pipeline bottlenecks have steepened a price discount for Western Canadian heavy crude this year. Refiners in Minnesota and surrounding states say Line 3 is necessary to increase crude supplies.

Shouts from Native Americans and environmental activists interrupted the meeting. “Shame on you, you cowards!” one woman shouted before breaking into tears.

Environmental groups and some Indigenous communities oppose the project over concerns about spills and impact on tribal wild rice harvesting areas.

Business and labour groups say the Us$7-billion project, of which US$2.5 billion would be spent in Minnesota, will create jobs and tax revenue. “It’s going to give everybody a real boost,” said Bob Schoneberger, who runs a piping contractor business in Duluth, Minn.

Line 3, which began service in 1968, operates at half its capacity. Its replacement would allow it to return to approved capacity of 760,000 barrels per day.

Several commissioners voiced doubts that demand for crude oil and refined products such as gasoline would grow enough to warrant the pipeline. But Enbridge’s rationing of demand from oil shippers for space on Line 3 was more convincing of a need to rebuild, said chairwoman Nancy Lange.

Approving a certificate of need is positive for Enbridge, but a subsequent decision on the pipeline route is also pivotal, said RBC analyst Robert Kwan, in a note.

Enbridge has proposed a route that follows the existing pipeline corridor partway through Minnesota, before veering south to avoid the Leech Lake reservation that the pipeline currently bisects. Reuters