Rejecting the Minnesota portion of an Enbridge Inc. proposed $5.8 billion pipeline would adversely affect the future adequacy and reliability of the state’s energy supply, the Minnesota Commerce Department said Aug. 17 .
An Enbridge proposal to replace its existing 1,100-mile oil pipeline with an entirely new pipeline capable of carrying more fuel needs state and federal approvals. If the state’s utility commission issues a certificate stating the project is needed, the Minnesota Commerce Department environmental impact statement concluded there is no “more reasonable and prudent alternative.”
The proposed pipeline will transport western Canadian crude oil to refinery markets in Canada as well as Chicago and the eastern U.S. The proposal, if completed, will be the largest infrastructure project in Enbridge’s history.
In Minnesota, the project would replace a 282-mile section of the pipeline with a higher-capacity 340-mile section that, unlike the existing pipeline, would cross a disputed section of the White Earth Indian Reservation that tribal members use for hunting and fishing.
Siting the replacement pipeline outside the existing pipeline corridor would require a new right-of-way corridor, “causing habitat fragmentation and expanding the total acreage of land and resources exposed to the risk of a potential accidental release from a pipeline,” the report said. The construction process also would cause adverse environmental impacts.
Continuing to use the existing pipeline, however, has its own drawbacks. Integrity issues have arisen as the pipeline, which has been in service for about 50 years, has aged and its exterior coating has deteriorated, resulting in frequent maintenance work, the report said.
In addition to the state and federal regulatory requirements, the pipeline faces a possible legal challenge.
“I think high-profile pipeline projects, depending on the dynamics and robustness of the permitting and regulatory process, I think these are often challenged and I wouldn’t be surprised if this was challenged,” Kirkland & Ellis LLP partner Paul Tanaka told Bloomberg BNA.
The fact that the project’s environmental impact statement has been issued means the project’s completion, if it receives final approvals, is “closer to the end than the beginning of the project,” Tanaka said.
Following a public comment period that will begin no earlier than Aug. 23, a state administrative law judge will prepare a report on the adequacy of the impact statement.
If the utility commission then decides whether the pipeline project is in the best interest of the state, it will issue a certificate of need.
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The Minnesota environmental impact statement is available at https://mn.gov/commerce/energyfacilities/resource.html?Id=34735
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