Enbridge withdraws Sandpiper application, waits on Line 3
Enbridge Energy, a Canadian company specializing in transportation of petroleum, announced it is withdrawing its application for the construction of its Sandpiper oil pipeline through a controversial Minnesota route that crosses just north of Pin...
Enbridge Energy, a Canadian company specializing in transportation of petroleum, announced it is withdrawing its application for the construction of its Sandpiper oil pipeline through a controversial Minnesota route that crosses just north of Pine River and south of Backus. Enbridge's application to replace its Line 3 pipeline with a new pipeline in the proposed Sandpiper corridor has not been withdrawn.
Enbridge said the decision to withdraw came from a combination of cost versus gain and changing Minnesota policies.
"Market conditions are very different now than they were when we first proposed Sandpiper. In addition, regulatory delays and changes to the approval process in Minnesota caused us and our shipping customer to seek a solution to get their product shipped to market in a timely manner," said Mark Maki, president of Enbridge Energy Partners.
The alternative solution is the Dakota Access Pipeline, which is being opposed by some of the same groups that opposed the Sandpiper. Honor the Earth and Friends of the Headwaters are among the most publicized opposition in Minnesota, with the latter being credited with convincing a Minnesota court to require an environmental impact statement (EIS) during the approval process, which has resulted in a significant delay to the approval of both pipeline projects.
"Last fall, the Minnesota Court of Appeals ruled in favor of our contention that Minnesota law required an Environmental Impact Statement on Enbridge proposals for the Sandpiper and their so-called Line 3 'rebuild,'" Melodee Monicken of Friends of the Headwaters said in a news release. "In December of 2015, the Supreme Court refused to hear an Enbridge petition for review of the appellate ruling. This will be the first EIS ever done on an oil pipeline in Minnesota. If Friends of the Headwaters/MCEA hadn't won the EIS ruling, Enbridge might already have its construction permits. Friends of the Headwaters' win in the Court of Appeals made that impossible."
Opposition parties in Minnesota reacted to the withdrawal with cautious optimism.
"The part I'm enthusiastic about or the excitement for me, personally, is that people feel empowered that they can actually come together and raise an issue about the environment and actually prevail," said attorney Frank Bibeau with Honor the Earth. "It's only a partial prevail because we aren't sure what they will do with Line 3 yet."
Friends of the Headwaters said the withdrawal and Dakota Access agreement validates some of the doubts the group had regarding the Sandpiper proposed route in the beginning.
"We always questioned Enbridge, why they needed to go to Superior with this pipeline when we knew and basically everybody knew that the final destination of this oil coming out of North Dakota was not going to be Wisconsin," said Friends of the Headwaters President Richard Smith. "We won the court case. The PUC had to issue an order for the EIS. At the same time that was happening, the world's oil market was going downhill. That the company decided to put the Sandpiper on the backburner in the middle of August and buy into this pipeline project for the Dakota Access straight to a facility in Illinois ... essentially, Enbridge's whole argument that they need to go to Superior through Clearbrook, they essentially blew that argument up themselves by shutting down the Sandpiper and investing in the Dakota Access Pipeline project."
Smith said his group does not oppose oil pipelines, but only opposed the Sandpiper because of the specific route, which Smith said was not a good match for the lake country of Minnesota. He said the route is even worse for Line 3, which is proposed to carry diluted bitumen, which does not float on water and is hard to clean up in a water rich environment.
Though Bibeau credited Friends of the Headwaters with convincing the court to mandate an EIS for the Sandpiper application, he also gave particular credit to Winona LaDuke of Honor the Earth. LaDuke is in much the same mindset as Bibeau and Smith.
"I'm very pleased and grateful to the Enbridge company for withdrawing their application for the Sandpiper," LaDuke said. "It's economically wise for the company. In my case, I've spent three and a half to four years on it. But, the Line 3 application is set to continue, and we will continue to oppose this corridor."
The construction of the Sandpiper Pipeline was expected to start roughly two years ago, with a proposed completion in 2016.
Enbridge responded to the Sandpiper withdrawal to say that without the pipeline, Minnesota and workers in the state have lost money.
"The counties along the Sandpiper route will miss out on the economic benefits that the project would have provided, including taxes associated with the pipeline and related facilities during the life of the pipeline (an estimated $25 million the first year in Minnesota and $9 million the first year in North Dakota)," Senior Manager Lorraine Little of U.S. Public Affairs with Enbridge wrote in a news release. "Communities along the route will also not realize benefits associated with 3,000 high-paying construction jobs and other economic benefits associated with construction of the pipeline."
LaDuke said those same workers could be put to work replacing aging infrastructure in Minnesota, or extending water and sanitary utilities in reservations. She also asked why Enbridge doesn't direct more of its money toward its existing alternative energy transitional strategy.
Today, all parties concerned still wait on an EIS for the remaining Line 3 application, which is still in consideration.
"The Line 3 replacement project is a maintenance driven project that must move forward," Little said in a news release. "Additionally, as part of the recent consent decree by the U.S. Department of Justice related to our Line 6B incident in 2010 in Marshall, Mich., the government has instructed that Line 3 must be replaced as expeditiously as practicable once applicable regulatory permits are received. We are still planning to build the Line 3 replacement project on the preferred route."
LaDuke, Bibeau and Smith have all pointed out that opposition to Line 3 continues, especially in light of Department of Justice, Environmental Protection Agency and other regulatory groups demanding the replacement of Line 3 as part of a settlement in response to a spill in Michigan. There is concern that the added pressure in Michigan could overflow into Minnesota.
"The question is whether they will use that as a way to muscle their way through," Bibeau said.
"It doesn't matter if it is Bakken oil or tar sands oil, it shouldn't be in our corridor," LaDuke said. "The EPA has ordered them to replace Line 3. If it is going to be replaced, it should be replaced in place."
Enbridge has maintained throughout the application process that the company has taken into consideration all impacts on environment and population centers in choosing the proposed Sandpiper route.
Enbridge may submit a new application for the Sandpiper in the future, independently of the Line 3 decision.
"Enbridge Energy Partners announced that it has completed its review of the Sandpiper project and concluded that the project needs to be delayed until such time as crude oil production in North Dakota rebounds sufficiently to support additional pipeline capacity," Little said. "It is difficult to project exactly when the project may be required but it is likely outside Enbridge's current five-year planning horizon."
In the meantime, LaDuke and Bibeau said the Sandpiper withdrawal may just be the beginning. In North Dakota, the North Dakota Access Pipeline has seen similar opposition. In Canada, the Northern Gateway Pipeline, also an Enbridge project, has had its permit denied by the government due to tribal concerns. This marks several difficulties faced by the Enbridge company.