Minnesota utility regulators give final stamp of approval to $2.6 billion Enbridge pipeline project

Minnesota utility regulators Tuesday officially bowed out of the yearslong approval process for Enbridge's controversial new oil pipeline, but not before taking a shot at the state's Commerce Department.

The Minnesota Public Utilities Commission (PUC) voted 4-0 not to reconsider its earlier approval of modifications to Enbridge's construction permit for the $2.6 billion new Line 3. The decision was expected, and essentially sets in motion a process for pipeline opponents to appeal Enbridge's permit for a replacement for its current Line 3.

Several environmental groups, at least two Ojibwe bands and the Department of Commerce are expected to file challenges with the Minnesota Court of Appeals. The Commerce Department represents the public interest in cases before the PUC, an independent agency whose members are appointed by the governor to staggered six-year terms.

Enbridge in 2014 proposed replacing its 1960s-vintage Line 3, one of six pipelines that ferry Canadian oil across Minnesota to the company's terminal in Superior, Wis. The corroding Line 3 operates at only 51 percent capacity, and Enbridge said it wants to improve safety and restore the full flow of oil.

Opponents of a new Line 3 said it would exacerbate climate change and open a new region of lakes, rivers and wild-rice waters to degradation from oil spills. (New Line 3 would follow a new route.)

Last month, Gov. Tim Walz said the Commerce Department would continue an appeal of Line 3 begun by former Gov. Mark Dayton's administration. Before any appeals can be made, though, the PUC had to go through the motions of reconsidering its earlier decision.

Normally, PUC commissioners don't even comment on reconsiderations. "This warrants a departure from that norm because the Department of Commerce has taken an unusual position," Commissioner Katie Sieben said Tuesday at the PUC meeting in St. Paul.

The PUC voted unanimously in favor of a "certificate of need" for new Line 3 in late June. But the commission didn't finalize that permit until January, after several modifications were added. The modifications dealt with such issues as insurance provisions for the project and removal of the old Line 3 once the new pipeline is in place.

The modifications in most cases were offered by the Department of Commerce, and Sieben said they were critical in helping her "reach the conclusion that the overall project was in the state's interest."

"It's better to replace a more than 50-year-old pipeline with one that's safer," she said. "For the department to argue that the commission should ignore the current condition of the very infrastructure to be replaced is nonsensical."

After Sieben spoke, PUC Commissioner Dan Lipschultz said: "I would echo your remarks, which were really well stated."

The Department of Commerce later said in a statement: "Our petition for reconsideration and anticipated appeal does not involve questions related to the current condition of the existing Line 3 pipeline. … In this case, the department's position is that Enbridge did not provide a legally sufficient long-range demand forecast as required. That narrow issue was the only issue raised in our petition."

Enbridge has defended the adequacy of its forecasts.

Lipschultz noted that Tuesday's hearing "was the end of the [PUC's] process for Line 3, but not the end of the process."

Court appeals of the PUC's Line 3 approval aren't likely to be decided until later this year at the earliest. A decision on a separate appeal — this one regarding the environmental impact statement (EIS) for Line 3 — is expected within the next 90 days.

The EIS was done by the Department of Commerce and approved by the PUC in March 2018. Environmental groups and some Indian bands claim that the EIS was flawed, and that regulators refused to adequately consider alternatives to the proposed pipeline. The Minnesota Court of Appeals heard oral arguments on the EIS last week.

Enbridge must still receive permits from Minnesota pollution-control and natural-resources regulators, as well as from the U.S. Army Corps of Engineers. The company had hoped to have those by permits by now and finish construction of its pipeline by the end of 2019.

However, Enbridge announced earlier this month that because the permitting process now isn't expected to be done until November, the pipeline wouldn't open until the second half of 2020.