Enbridge's timeline to build new $2.6 billion pipeline still in limbo

Time is getting tight for Enbridge to break ground on its controversial $2.6 billion crude oil pipeline across northern Minnesota if the company sticks to its current schedule.

The company has told shareholders it expects the replacement for its current Line 3 to be shipping oil by Nov. 1, yet Enbridge is still waiting for key federal and state permits. And the Minnesota Public Utilities Commission (PUC) has yet to formally finish its approval process.

All those machinations aren't likely to be completed until at least April.

The company last summer had hoped to start construction of the 330-mile pipeline during the final three months of 2018. Then, the start time was moved up to 2019's first quarter. This week, Enbridge said in a statement it is "working toward mobilizing for construction in Q1 of 2019." That includes moving construction equipment and material into place.

"We are actively working with the new [state] administration and agencies to develop a clear sense of the schedule for permitting activities moving toward construction of the Line 3 project and are doing everything we can to meet our project construction milestones," Enbridge said. The company declined to make someone available for an interview.

The PUC, the state's primary pipeline regulator, verbally approved the new Line 3 in late June. But Enbridge must still get permits from the Minnesota Pollution Control Agency and the state's Department of Natural Resources. Also, it must secure critical construction permits from the U.S. Army Corps of Engineers.

"It's really hard to say how long the process will take," said Scott Strand, an attorney for Friends of the Headwaters, one of four environmental groups challenging the PUC's decision to the Minnesota Court of Appeals. "We think there is a lot of work to be done."

The new Line 3 would ferry oil from northern Alberta across northern Minnesota to Enbridge's terminal in Superior, Wis. The Canadian portion of the new pipeline is on track for completion in July; 90 percent of the pipe has been laid in the ground, according to Enbridge.

The current Line 3 is aging, corroding and operating at only 51 percent of capacity due to safety concerns. Calgary, Alberta-based Enbridge says safety would be greatly enhanced with a new Line 3, which would also restore the full flow of oil — 760,000 barrels per day — and boost Enbridge's profits.

At Enbridge's annual investor conference on Dec. 11, Chief Financial Officer John Whelen said the company "still assumes" the new Line 3 will be in service by Nov. 1.

Enbridge can still finish Line 3 by November even if the company doesn't get going until spring, said Kevin Pranis, Minnesota and North Dakota marketing manager for the Laborers union whose members would be working on the pipeline.

The outdoor construction season in Minnesota does not fully kick in before May, and Enbridge can use multiple work crews simultaneously on different parts of the route, Pranis said. "You can get the bulk of the work done in one [construction] season," he said.

The PUC on June 28 unanimously approved a "certificate of need" for the new pipeline. However, the PUC asked Enbridge to meet several conditions, including posting a full corporate guarantee to cover any oil spill damage.

At a meeting in November, the PUC ruled Enbridge had met its conditions. Still, the commission's written order was issued only Wednesday. Pipeline opponents now get 20 days to ask the PUC to reconsider its order, and the PUC then gets up to 60 days to respond. The PUC estimates the process will be finished by April.

"If the PUC sticks with this schedule, then Enbridge could not begin construction until April at the earliest," said Paul Blackburn, an attorney for Honor the Earth, an indigenous environmental group that is appealing the PUC's approval.

"But Enbridge also needs water-related permits from the U.S. Army Corps of Engineers and the Minnesota Pollution Control Agency, and the timing of these processes is uncertain."

The corps has jurisdiction over the nation's navigable waterways and their tributaries and wetlands — and there are a lot of them in northern Minnesota.

The corps recently extended the public-comment period for Enbridge's permit application by a month, from Jan. 21 to Feb. 21 after receiving several requests for the extension. The corps has already received "thousands" of comments, Konickson said, and "it's going to take some time" to sift through them.

Many commenters have also asked the corps to conduct a public hearing on Line 3. After the comment period, the corps must evaluate the permit, a process that by law includes consulting Indian tribes on historic preservation issues.

Several tribes have participated in a tribal cultural survey that could be the largest of its kind in the United States. Coordinated by the Fond du Lac Band of Chippewa and funded by Enbridge, Indians physically surveyed the pipeline route, looking for evidence of culturally historic places.

The initial survey is done. Fond du Lac said in a statement that a report is being prepared with consulting tribes and the corps and a draft should be completed by the end of February. Enbridge has agreed to work around any cultural resources that were discovered as part of the survey, the statement said.