Enbridge Line 3 project pits company's safety concerns against renewed water activism

SUPERIOR, Wis. – The giant steel pipe is so fresh, workers haven't even fully buried it.

Enbridge, North America's largest pipeline operator, will complete a short but essential part of its controversial Line 3 replacement in Wisconsin this fall. Construction on the Canadian part of the line also is underway.

But the company's biggest challenge is yet to come: crossing northern Minnesota.

Enbridge's three-year quest to gain the state's permission to replace Line 3 is in its final phase, creating an intensifying clash between a company that sees it as a must-do safety project and environmentalists and Indian tribes who see it as another threat to the region's sources of fresh water.

Regulators' review of Line 3 is amping up this month, and the Minnesota Department of Commerce is expected next week to release its assessment of need for the pipeline.

For Enbridge, the answer is obvious. The line is deteriorating and running at about half its capacity to safeguard against leaks.

"The way we look at it is that if you oppose this project, you are opposing the enhancement of critical, safety-related infrastructure," said Al Monaco, CEO of Calgary-based Enbridge, whose six pipelines crossing Minnesota are the main artery for oil from Canada, the largest source of U.S. petroleum imports. "We are renewing this line with the most advanced technology in the business."

Opponents, though, object to the proposed 340-mile path through Minnesota, which would diverge from its current route, traveling near the Mississippi River headwaters and through areas known for pristine waters and wild rice lakes.

The intensity of antagonism to new pipeline projects has risen across the country in recent years. At least five major U.S. projects, from Louisiana to the Eastern Seaboard, are facing major opposition. Right now in Michigan, Enbridge is taking heat over the integrity of a 1950s-vintage oil pipeline that starts in Superior, Wis., and runs under the Straits of Mackinac — though the company attests to its safety.

Growing concern over climate change has sparked increased resistance to fossil fuel projects, and a string of high-profile pipeline ruptures since 2010 — including a massive Enbridge spill in Michigan — also has heightened suspicions.

Plus, protests last year over the Dakota Access crude oil pipeline in North Dakota, which centered on the Standing Rock Sioux band's water resources, galvanized long-standing tribal opposition to pipelines.

"All of these add up, and that's why you have so much concern about Line 3," said Scott Strand, an attorney representing Friends of the Headwaters, an environmental group opposing the pipeline.

Stocking up to build

Minnesota produces no oil but is nonetheless the nation's seventh largest state for oil transmission pipelines, covering 2,416 miles mostly courtesy of Enbridge.

The first was built from Edmonton to Superior back in 1949. Today, Enbridge's corridor across Minnesota includes six separate lines, which together move 2.9 million barrels a day. The oil supplies refineries in the Twin Cities and throughout the Great Lakes region.

For the Line 3 project, Enbridge has stocked pipe at depots in Minnesota along its proposed route.

One staging area in Carlton County, about 40 miles west of Duluth, appears to be the size of a few football fields, with thousands of pipes stacked high.

Staging the pipe before Line 3 is approved is a necessity, Monaco told the Star Tribune. Pipe is ordered from steelmakers for the whole project — not just pieces of it — and the mills need sufficient time, he said.

"We've got pretty good confidence in Minnesota approval," Monaco told stock analysts in a July 30 conference call.

What if the new Line 3 isn't approved? "You always have that risk on a pipeline project," Monaco said.

The pipeline's total cost is $8.2 billion, including $2.9 billion for the U.S. portion, most of which is in Minnesota. Construction is underway in Canada, and work started in July on the 13 miles of new Line 3 in Wisconsin.

On a recent morning, about 50 workers — pipe fitters, laborers, heavy equipment operators — swarmed around a trail of pipe lengths. Booms lowered an automated welding machine over each joint, sealing the pipeline before it's buried.

Work on the Wisconsin line has been temporarily shut down at least three times over the past three weeks by nonviolent protests. Six protesters were arrested during one demonstration after one locked himself to a piece of construction equipment. It could be a portent of things to come in Minnesota.

Sandpiper stalled

Enbridge has already seen one major project in Minnesota crumble following fierce opposition coupled with a major oil industry slump.

The $2.6 billion Sandpiper pipeline would have linked North Dakota's oil fields to Enbridge's Superior terminal. But Enbridge pulled the plug on Sandpiper a year ago after it bought a big stake in the Dakota Access pipeline, which bypasses Minnesota.

Sandpiper, which navigated Minnesota's regulatory process for almost three years, went hand in hand with a new Line 3. Both would have followed Enbridge's current Minnesota pipeline corridor to Clearbrook, then jogged south toward Park Rapids before heading east.

The new route would parallel another company's existing oil pipeline from Clearbrook to roughly Park Rapids, and then follow power line rights of way for 110 miles of its 230-mile path heading east.

"But power lines don't leak or spill," said Strand, the environmentalists' lawyer. Plus, in case of a spill, portions of the new Line 3 route would be in wilderness areas that are harder to reach than Enbridge's current pipeline corridor, he said.

Opponents worry that if Enbridge's proposed route for Line 3 is approved, plans for Sandpiper will return.

"If Line 3 is built, it is a certainty that Enbridge will want to put a new Sandpiper in the same place because it opens a new corridor for them," said Paul Stolen, an adviser to Friends of the Headwaters and a former scientist for the Minnesota Department of Natural Resources.

Monaco dismissed Sandpiper speculation, saying "that's just not in the plan in any way whatsoever."

Line 3 was built in the 1960s with pipe manufactured in a process later found to be susceptible to cracking. Pipe defects have contributed to four major oil leaks in Line 3's history, the last one a 252,000-gallon spill near Cohasset in 2002.

Compounding the problem, most of the coating on Line 3 — a polyethylene tape popular in the 1960s — later became notorious for peeling, an invitation to corrosion. Line 3 has 10 times as many corrosion anomalies per mile than any other pipeline in Enbridge's Minnesota corridor, and it often needs expensive repairs.

The company says building a new Line 3 would be more cost-effective than ongoing maintenance. The new pipeline would have a capacity of 844,000 barrels per day, though Enbridge says it plans to operate it at 760,000 barrels. That's the designed volume for current Line 3, which has run at considerably lower pressure since 2010.

$1 billion spill

In 2010, one of Enbridge's pipelines burst in a Michigan wetland, releasing 834,000 gallons of oil that ended up polluting a nearby creek and river. It was one of the largest U.S. onshore oil spills ever, and one of the most expensive: It cost over $1 billion to clean up.

The National Transportation Safety Board (NTSB) eventually concluded that Enbridge didn't adhere to its own safety procedures.

Borrowing a phrase from the post-mortem of the Space Shuttle Challenger disaster, the NTSB said a "culture of deviance" appeared to have taken root at Enbridge.

The words stung, but then so did the disaster itself, said Monaco, a longtime Enbridge executive who was named CEO in 2012.

"This was a very hard-hitting event in our company's history, probably the most significant one, and we concluded that we had to make changes. We needed to ensure our people and everybody else that safety and environmental protection was number one."

Enbridge hasn't had a headline-grabbing spill since the Michigan debacle. But for Line 3 opponents, it hasn't gone away. "Enbridge is going to have to live with that spill because it shows what can happen," Strand said.

Mike Hughlett • 612-673-7003