In response to Jacob Herbers’ piece in the July 29 Business Forum that argued fossil-fuel projects are bad for Minnesota’s environment and taxpayers, let’s be clear: Enbridge is replacing an important piece of energy infrastructure that delivers affordable, reliable energy Minnesotans need today — and will continue to need well into the future.
For Minnesotans this includes gasoline that powers vehicles, diesel for farm equipment and trucks, jet fuel for the Minneapolis-St. Paul airport, and fuels for boats, ATVs and snowmobiles.
Minnesotans consume more than 12.8 million gallons of petroleum products every day, relying on imports to meet these energy needs. Minnesota’s two refineries produce more than two-thirds of the state’s petroleum products, and 80% of these are refined from Canadian crude oil. All of the pipeline-delivered Canadian crude supplied to Minnesota comes from Enbridge’s system, of which Line 3 is a critical piece. Demand for crude oil is expected to grow even under the most conservative forecasts that factor in widespread use of electric vehicles.
Enbridge shares the belief that we need to materially reduce global greenhouse gas (GHG) emissions to address climate change. A sustainability study by the International Energy Agency (IEA) suggests that in 2040, 48% of global energy demand will continue to be met by oil and gas, while meeting reduced GHG emissions in line with the Paris Agreement. If the experts at the IEA are even remotely correct, then we need to work together to ensure we have the right infrastructure to reduce GHG emissions across the entire energy system.
Enbridge is committed to cleaner oil and gas. According to IHS Markit, GHG emissions from the Alberta oil sands have fallen by 21% since 2009 with significant improvement to come — some new oil sands production is already lower than the average barrel refined in North America. (IHS, 2018). Producers are committed to reducing the GHG intensity of their operations even further and continue to invest significantly in technology and innovation. Of note, electricity needed to power the Line 3 Replacement Project will be supplied by renewable energy sources (as per the Minnesota Public Utilities Commission compliance requirement), thereby reducing the overall carbon footprint of our pipeline operation.
Research tells us replacing Line 3 will have little, if any, impact on upstream Western Canadian oil sands production. Shippers already have access to other markets and other transportation modes such as rail and therefore unaffected production means no change in upstream GHG emissions. However, shipping oil by pipeline is a safer, more energy-efficient and less carbon-intensive mode of transportation than rail, and as mentioned above, steps are being taken to reduce the carbon footprint even further. Not replacing Line 3 means more expensive products for consumers with higher GHG emissions.
The replacement of Line 3 is a $2.6 billion-dollar private investment by Enbridge in Minnesota’s critical energy infrastructure. During construction, the project will create 8,600 jobs in Minnesota. In terms of economic impact that is about $334 million in payroll to workers, plus a $162 million construction-related gain for local economies through purchase of local products/materials and use of local hotels, restaurants and services. Also, Enbridge has committed to spending $100 million with indigenous and tribally owned businesses on the Line 3 project.
Looking long term, each county crossed by the project will receive additional property tax revenue. Enbridge already pays more than $30 million in Minnesota property taxes annually; this will increase incrementally by $35 million beginning the first full year of service.
At Enbridge we take the safe operation of our pipelines very seriously. A recent study of the Mississippi River by the Minnesota Pollution Control Agency found the upper part of the river to be very healthy, in the area where our pipelines have operated for nearly 70 years. Also, it is simply incorrect to say that taxpayers would be left footing the bill in the unlikely case of a pipeline incident on the Enbridge system. Enbridge has the proven financial strength and necessary insurance to cover any incident.
Again, replacing an aging pipeline with new, thicker pipe protected by fusion-bonded epoxy coating, using the most advanced welding and construction technology, just makes sense. Replacing Line 3 at Enbridge’s expense will ensure a safe, reliable, efficient source of energy and will protect Minnesota’s environment and our communities for years to come — and that’s a great deal for Minnesotans.
Brad Shamla is vice president of Enbridge U.S. operations.
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