A judge on Thursday backed a proposed upgrade of the Alberta Clipper crude oil pipeline across the state, saying it's needed to supply petroleum refineries serving Minnesota and neighboring states.
State Administrative Law Judge Eric Lipman concluded that the planned $160 million expansion project proposed by Enbridge Energy will benefit consumers.
"If the proposed project is approved, Minnesota consumers will likely pay less for petroleum products than they otherwise would without the added pipeline capacity," Lipman wrote in a 37-page order following three days of testimony and a public hearing in April.
The judge's ruling, which now goes to the state Public Utilities Commission (PUC) for a final decision, is a defeat for the climate change group MN350, which opposes development of Canadian oil sands and argued that the pipeline expansion isn't needed. The project also needs federal approval.
It was a victory for Calgary-based Enbridge, which won a separate regulatory battle Thursday when the PUC rejected another environmental group's request to delay one of the company's other Minnesota projects — the proposed $2.6 billion Sandpiper pipeline to carry North Dakota crude oil.
The Alberta Clipper pipeline, completed in 2010 and also known as Line 67, runs 1,000 miles from Hardisty, Alberta, to Superior, Wis., including 285 miles across northern Minnesota. It feeds Twin Cities refineries and others across the Midwest. The 36-inch-diameter line was designed to be expanded by adding pumping stations, and a Phase 1 capacity boost already is underway.
No new pipe planned
The next phase, which was the subject of the ruling, would add four new pumping stations and expand three existing ones in Minnesota, boosting the line's capacity by 40 percent to 800,000 barrels per day. No new pipe would be laid.
"This ruling paves the way for good jobs and long-term economic benefits for northern Minnesota, as well as greater energy security for the Midwest and the U.S.," Enbridge spokeswoman Lorraine Little said in an e-mail. "Through this process, we were able to show decisively that there is a significant need for greater access to North American energy resources and demonstrate that Minnesota will benefit greatly with the expansion of Line 67 to its full design capacity."
The Minnesota Commerce Department, which supported the upgrade, estimated that an additional 1.4 million barrels per day of Canadian heavy crude will be extracted from the northern Alberta oil sands region by 2020.
Lipman said that amount would exceed the capacity of current and planned pipelines, including TransCanada's proposed Keystone XL pipeline through Nebraska and other Western states.
Opposition: Fight isn't over
The Sierra Club and MN350, a group loosely affiliated with opponents of Keystone XL, had sought to block the Minnesota pipeline upgrade to halt that new flow of oil and thereby reduce greenhouse gases. Activists held protests in St. Paul and retained an attorney and experts to make their case before Lipman.
"It shows that right now in Minnesota we appear to be considering the oil industry's economic need over the need to preserve this place we love," Andy Pearson, tar sands coordinator for MN350, said of Lipman's ruling.
Lipman, who six months ago issued a ruling favoring solar energy over natural gas for electricity generation, rejected the groups' argument that disapproval of the pipeline upgrade would curb development of the Canadian oil sands.
If Canadian oil producers don't get additional pipeline capacity, that would raise the price of their oil but not enough to dissuade them from extracting it, he wrote.
Pearson said the fight against the project isn't over. Activists also plan to challenge the project before the PUC and during a separate federal environmental review, he said.
Like the controversial Keystone XL project, the Alberta Clipper upgrade needs a presidential permit to increase the flow of oil across the Canadian-U.S. border.
Potomac Hudson Engineering Inc. of Gaithersburg, Md., has been retained by the State Department to conduct an environmental review related to the federal permit. Neither the State Department nor Potomac Hudson responded to requests for details about that process.
Second Enbridge victory
In a separate action Thursday, the PUC voted 3-0 to reject a request by Honor the Earth, an environmental group, to revise its process for reviewing Enbridge's proposed Sandpiper pipeline across northern Minnesota.
Enbridge had opposed the change because it would have required additional public hearings and cause delays.
"There is this notion that government is slow and ponderous and takes too long and nothing can get done," PUC Chairwoman Beverly Jones Heydinger said. "So we are always trying to balance the need for transparency and thoroughness with the desire to move projects in a way that we can get to a decision in a timely way."