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Pipe dreams: With a new corridor secured, Enbridge has options for future projects

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DULUTH — When Minnesota regulators signed off on the Line 3 replacement pipeline this summer, they may have reshaped the future of oil transportation across the state.

By forging a new path for Line 3, Enbridge now has options for its other five pipelines that traverse Minnesota. While there are no plans to move or replace those pipelines, the new route sets a precedent future projects could follow.

"Establishing a new corridor for crude oil pipelines creates a higher probability of using the new corridor for other new or rerouted pipelines," Administrative Law Judge Ann C. O'Reilly wrote in her report on Line 3 this spring. "It is also reasonably foreseeable that (Enbridge) will seek to re-route its existing lines outside of the Leech Lake and Fond du Lac Reservations in the near future."

By 2029, the company will need to ink new agreements with the Leech Lake and Fond du Lac bands to continue crossing their reservations. But if the deals are scrapped, there is a workaround.

"It is understandable why (Enbridge) would want to create a new corridor where it can obtain perpetual easements from private landowners and avoid tribal lands altogether," O'Reilly wrote.

Enbridge says it is "focused on finishing Line 3," and the company will continue making smaller-scale improvements to its other pipelines.

"At this point, we're not looking at replacing the older lines," Enbridge spokesperson Jennifer Smith said.

Colleen Bernu, part of the group Minnesotans for Pipeline Cleanup, said that even if the company isn't thinking about the next big pipeline project, landowners like her are.

"Rust is rust. Infrastructure needs replacing. It is only a matter of time until we have to have this conversation again."

Precedent

Bernu, who lives along the Enbridge Mainline route that carries oil between Alberta and the company's terminal in Superior, Wis., says the future of those pipelines "makes me pause a little bit."

"Line 3 isn't the oldest line in the existing corridor," she said. "So what does that mean?"

Because of the way the 1950s-era Line 1 and Line 2B were built, it means continued maintenance rather than full-scale replacement, Enbridge officials said. Line 3, which came online in 1968, used a different coating that caused it to degrade faster.

"Age is not the defining factor for pipelines," said Laura Kennett, manager of Enbridge's Pipeline Integrity Execution Program. "It's really about how they were constructed — the methods that were used, the materials that were used and how the pipeline was treated over its life."

If pipeline health won't be cause for replacement in the foreseeable future, Enbridge's easement for the Line 3 replacement route "does include the rights for two pipelines," Smith said.

Judge O'Reilly pointed this out several times in her recommendation that Line 3 be approved but along its original route — advice the PUC ignored.

"(Enbridge) has laid the groundwork for either: (1) relocating its aging pipelines from the Mainline corridor in this new corridor; or (2) building a new, additional pipeline in the area," O'Reilly wrote.

Despite the precedent, the Public Utilities Commission considers each project on its own merits, Executive Secretary Dan Wolfe explained.

"If an application for a certificate of need and/or route permit for a pipeline is filed in the future, the commission would make its decisions based solely on the complete record and the law applicable to that filing," he said.

Even so, the new route appears to give Enbridge an advantage spelled out in state law: "In selecting a route for designation and issuance of a pipeline routing permit, the commission shall consider ... use of existing rights-of-way and right-of-way sharing or paralleling."

And Enbridge has a strong financial incentive to move a line if it comes time to completely replace it.

"An in-trench replacement would require shutting down the existing pipeline and having this gap in service to our customers," Smith said about the decision to reroute Line 3. "So that's a substantial impact to our customers."

Negotiations

The future of both corridors could depend on the renegotiations of easements through the Leech Lake and Fond du Lac reservations by the end of the next decade.

"If the tribes will not agree to new easements by 2029, then (Enbridge) will no longer be able to operate its six lines through the reservations after 2029," O'Reilly wrote.

That's where the new Line 3 corridor, which avoids the Leech Lake Reservation and might bypass the Fond du Lac Reservation, could come in handy, O'Reilly suggested.

A decision by the Fond du Lac Band of Lake Superior Chippewa on parts of the new Line 3 route is due by the end of the month.

"The band must now choose whether to allow Enbridge to expand Line 3 through the

reservation or to allow a brand-new expansion of pipeline capacity through the 1854 Ceded Territory in areas that have never had a pipeline before," band Chairman Kevin R. Dupuis Sr. said in a statement. "The Fond du Lac band currently has a right-of-way agreement for all six Enbridge lines that expiries in 2029 to consider as well."

In a filing with the PUC earlier this year, the band pointed out the "fundamental reason for this new route: This is the first pipeline in a new energy corridor, one that is designed to avoid the two reservations through which the Enbridge Mainline currently runs."

"If these tribes continue to oppose oil pipelines crossing their limited land base," lawyers for the band wrote, "the commission is likely to see Enbridge back again in under 10 years seeking to install new 'replacement' pipeline segments along this new corridor for each of the other five lines in its Mainline."

Meanwhile, the Leech Lake Band of Ojibwe has maintained it wants "pipeline operations (to) cease across the reservation as soon as possible," according to Grace Elliot, the band's legal director.

Enbridge was confident enough in its ability to secure future agreements for the Mainline corridor that it built two new pipelines across tribal land within the last decade. The Alberta Clipper and the north-flowing Southern Lights pipelines came online in 2010.

In a recent interview, Enbridge wouldn't speculate about potential outcomes, but stressed it has been successful in past negotiations.

"It is something that we're still able to do and have done in our normal course of business," Smith said. "Right now, we're focused on getting Line 3 replaced."

But O'Reilly characterized the renegotiations as more pressing: "(Enbridge) has a much larger issue to address with the tribes than just existing Line 3."

With room in its new corridor for two pipelines, the company seems to have taken a step in that direction.

Line 3 routing discussions continue

While the Minnesota Public Utilities Commission pushed the Line 3 replacement over its biggest hurdle in June, Enbridge has several more permits to secure before starting construction — and a decision from the Fond du Lac band on whether the pipeline will cross reservation land or ceded territory is due Aug. 31.

"There is no ideal outcome here, all options threaten the environment for all and the livelihood of the indigenous people of Minnesota," band Chairman Kevin R. Dupuis Sr. said in a statement. "A pipeline routed around the reservation in perpetuity will have devastating impacts on the Ceded Territory."

Earlier this month, the band said in a filing to the PUC that it was "willing to consider" permitting the pipeline through the reservation, but has since clarified that position, stressing "no decisions have been made."

Enbridge said only that talks are ongoing.

Brooks Johnson

Brooks is an investigative/enterprise reporter and business columnist at the Duluth News Tribune.

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