With a decision on its proposed new pipeline that would cross northern Minnesota just weeks away, Enbridge announced on Friday two significant moves aimed at allaying opposition to the controversial project.
Al Monaco, the company’s CEO, said in an interview Friday that if Enbridge receives regulatory approval to replace its Line 3, it would remove portions of the old Line 3 if landowners request it for their property.
“That’s a big commitment,” he said.
Monaco also said it is encouraging contractors to spend at least $100 million of the more than $2 billion it will cost to build the U.S. portion of the new pipeline for American Indian subcontractors or employees.
A new Line 3 would follow a new route, and Enbridge plans to drain and seal the old pipeline and continue to monitor it. The company has adamantly opposed removing the entire old line and said it would cost an extra $1 billion to do so.
However, some landowners have concerns about negative environmental effects of the old pipeline and want it removed.
Although Enbridge does not have a cost estimate yet, Monaco said the company believes working with individual landowners will cost much less because “we actually think landowners will prefer to leave it in” instead of dealing with another construction project on their land.
“But where landowners prefer to remove the pipeline from the ground, we will do that,” Monaco said.
Doug Learmont, a mining industry consultant who also has done work in the oil and gas industry, has the current Line 3 and five other Enbridge pipelines crossing his land near Warba.
If a new Line 3 is built, he would ask for the unused pipeline to be removed and calls Enbridge’s Friday offer “a good step.”
“The easement contracts we have with [Enbridge] do not say the pipe stays in the ground forever,” he said. “It doesn’t grant rights to use the land as a dumping ground.”
He said he’s concerned that if the old Line 3 is abandoned and Enbridge one day “walks,” landowners could get stuck with the liability of undetected pollution issues and ensuing cleanup costs.
Enbridge has said it will monitor and take care of issues with the old pipeline.
The three-year regulatory process for Line 3 in Minnesota is winding down, with the state Public Utilities Commission (PUC) expected to make a decision by the end of June.
“We are on the 20-yard line here and have to work to get to the end zone,” Monaco said.
The new pipeline would begin in northern Alberta. Most of the U.S. portion would be in Minnesota, with the pipeline ending in Superior, Wis.
Calgary, Alberta-based Enbridge already has programs in place with First Nations in Canada similar to the pledge to hire American Indian subcontractors and employees in Minnesota.
“We would strongly encourage this to happen with our contractors,” he said.
Enbridge said a new Line 3 is needed because the old pipeline is aging and corroding. The existing Line 3 is now running at 51 percent of capacity due to safety issues; the replacement would bring flow back up to 100 percent.
The new Line 3 would veer from the current route at Clearbrook, then jut south to Park Rapids before heading east to Superior. It would not cross reservations in northern Minnesota but would traverse land that the tribes claim treaty rights to hunt, gather and fish.
Minnesota’s major Ojibwe tribes oppose the new Line 3, as do environmental groups, fearing that it would open up a new region of wild rice waters, rivers and streams to degradation from possible oil spills.
Frank Bibeau, attorney for Honor the Earth, an American Indian environmental group opposing Line 3, wonders why Enbridge waited so long to make an economic and jobs commitment to the tribes.
“Why is this coming so late? How do we set this up in time if that is really their inclination,” Bibeau said.
If the PUC approves Line 3 on Enbridge’s preferred route, Monaco said he expects construction to begin in the fourth quarter of 2018.
Bibeau said he believes Enbridge’s Friday announcement is a reaction to the recent ruling by state Administrative Law Judge Ann O’Reilly. Her ruling recommends that the PUC reject Enbridge’s preferred route and instead extract the existing pipeline and replace it along the same route, a billion-dollar-plus job.
“The way I read her order,” Bibeau said, is that Enbridge was angering the Indian tribes, “and they had to solve the problem.”
Monaco also Friday addressed Enbridge’s recent victory in a Minnesota Tax Court, which ruled in favor of the company in its suit against the state Department of Revenue. Enbridge claims the state changed the way it assessed an existing pipeline, forcing the company to overpay tens of millions in taxes over several years.
While the state is likely to appeal the tax court’s decision, as it stands now, counties that host Enbridge pipelines will be on the hook for the refund since they receive the tax proceeds. The liabilities are huge for some counties with small tax bases.
“We will work with each of the counties to minimize the impact,” Monaco said. Asked if Enbridge would forgive any of the refunds it’s owed, he said that’s “to be determined.”