Pipeline changes will send more Canadian oil into Minnesota

More Canadian crude oil soon will be flowing into Minnesota in an expanded pipeline that is still undergoing environmental review.

Enbridge Energy is spending $200 million in Minnesota to add pumps and boost the capacity of its 1,000-mile Alberta Clipper pipeline. But the company says a yearlong delay in a U.S. State Department environment review has held up a presidential permit to ship more oil across the U.S. border.

In a move that surprised and angered climate activists who oppose the project, the Calgary-based pipeline company has found a way to legally circumvent the permit. Enbridge says it will temporarily switch the flow of two parallel pipelines on a 17.5-mile segment across the Canadian-United States border, maximizing the flows under existing permits.

"Ultimately this is about meeting shipper requirements for capacity," Enbridge spokeswoman Lorraine Little said Wednesday in an interview. "We are utilizing this optimization in order to meet that. We do see it as a short-term solution until the full Department of State review is completed."

By the end of September, Enbridge will increase shipments of crude oil on the Alberta Clipper across Minnesota by 27 percent to 570,000 barrels per day, Little said. The flow potentially could increase to 800,000 barrels per day in 2015 under a second expansion.

The crude oil from Canada's oil sands region would enter the Alberta Clipper line in Hardisty, but it would switch into another pipeline at the U.S. border strictly for regulatory compliance.

At 1.5 miles north of the U.S. border, Enbridge says it is building an interconnection to divert the Alberta Clipper oil onto an older, adjacent pipeline, known as Line 3. Little said workers recently replaced the 17.5-mile section of Line 3 at the border crossing so it can safely handle the new flow.

Once across the U.S. border, the flows of the two pipelines will be diverted back into their original lines. To accomplish this, Enbridge says it is building a second interconnection 16 miles south of the border in North Dakota. From there, both pipelines continue on a parallel track across Minnesota to an oil terminal in Superior, Wis.

MN350, a climate change group that has opposed Enbridge's pipeline expansion, criticized the cross-border switch, noting that an environmental review of the Alberta Clipper expansion isn't finished.

"Clearly Enbridge officials are searching for loopholes that would avoid environmental analysis," said Kate Jacobson, a lead coordinator for MN350.

Enbridge offered of the plan in a June letter to the U.S. State Department, which released the letter this week along with a request for public comments on how it affects the environmental review of the Alberta Clipper expansion.

In a statement Wednesday, the State Department said Enbridge's plan is "not inconsistent" with an existing cross-border permit, "and therefore Enbridge did not require authorization from the Department to proceed." The State Department told Enbridge the same thing in a July letter.

For the expansion of the 36-inch-diameter Alberta Clipper line, Enbridge is adding new pumping stations, but no new pipe. The Minnesota Public Utilities Commission last year approved the need for the first phase of expansion, which is nearly finished. A state administrative judge in June backed the second phase. The commission is set to vote Aug. 28 on whether the second phase is a needed energy project.