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Enbridge pushes back on need for Line 3 oil pipeline replacement

DULUTH, Minn. — In the tug-of-war over the proposed Line 3 oil pipeline replacement across northern Minnesota, Enbridge on Wednesday, Oct. 11, launched its latest pull.

The company fired back on the state Department of Commerce's assertion last month that the oil pipeline is not needed, filing rebuttal testimony and hosting a news conference to make its case.

"Denial of the Line 3 replacement program does not change the supply of crude oil in Canada or anywhere else ... or demand for crude oil in the Minnesota or in the U.S.," said Neil Earnest, president of energy market consultants Muse, Stancil & Co. "What it does do is shift it off pipelines and onto rail."

The demand for Canadian crude oil is there, officials reasoned, and supply is only growing.

"The (pipeline) system is full today and production is expected to grow even under the most conservative forecasts," said Guy Jarvis, Enbridge executive vice president.

The Line 3 replacement would carry 760,000 barrels per day between Alberta and the Enbridge Terminal in Superior, crossing Minnesota on a largely new route and restoring the line to its original capacity. The original, nearly 50-year-old Line 3 would be deactivated, cleaned out and left in the ground in most areas.

But in September the Department of Commerce filed testimony that said: "Minnesota would be better off if Enbridge proposed to cease operations of the existing Line 3, without any new pipeline being built."

That spurred on pipeline opponents, which include environmentalists, Native American tribes and landowners who say the pipeline is not worth the risk. The project's environmental review found tribes would be negatively affected no matter what alternative was selected, and protests have ensued in Wisconsin where construction on the pipeline has already begun.

But the process is far from complete in Minnesota. Following hearings this fall, the state Public Utilities Commission is expected to decide whether to approve the Line 3 project next spring.

One criteria for the pipeline's approval, according to state law, regards the "future adequacy, reliability or efficiency of energy supply to the applicant, to the applicant's customers or to the people of Minnesota and neighboring states."

Enbridge's comments played close to that requirement in making their case Wednesday.

"Minnesota is part of a broader regional refined product market. It relies on the success of refineries in this market and those in neighboring states," Jarvis said. "The benefits those refineries are going to achieve in adjacent regions are going to flow through to Minnesota."

The company touted improved safety and reliability with a replacement pipeline, plus the jobs and other economic benefits it would create. The alternative, they warned, would not serve refiners, residents or the region.

"Denial leaves Minnesota refiners with a couple of bad choices — use rail or buy at higher costs from competitors on the mainline," said Earnest, whose company wrote the rebuttal and original economic testimony for Enbridge. "There is no question that the Line 3 replacement is needed. Without it the impact on the state will be significant."

A hearing on the project will be held at the DECC on Oct. 18 from 1-4 p.m. and 6-9 p.m. Written comments will be accepted through Nov. 22.

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