Enbridge sees pipeline as fuel for energy independence, economic growth
Enbridge, the company behind the controversial Sandpiper pipeline that would move oil across northern Minnesota, says the project will bring construction jobs and property tax dollars to the state and be part of the goal of achieving energy independence.
The proposed $2.6 billion Sandpiper pipeline is aimed at transporting light crude oil from near Tioga in northwest North Dakota to an existing terminal in Superior, Wis.
Thursday was the final day for public comment to the Minnesota Public Utilities Commission on the project that has been met with some resistance in lakes country and still needs regulatory approval.
In the Upper Midwest, Enbridge’s work mainly involves transporting crude oil. In other areas it also transports natural gas and has invested $3 billion in renewable energy — wind, solar and geothermal.
Lorraine Little, Enbridge senior manager, said the company plans to invest $5 billion in Minnesota in the next few years in upgrading, replacing and building new lines such as Sandpiper.
Little said North American refineries want access to the supply of oil in North Dakota and Canada and that’s what is driving the expansion.
“It really supports the overall energy independence for North America,” said Lee Monthei, Enbridge vice president of major projects execution. Monthei said technology, which has allowed the exploration of the Bakken oil field in North Dakota and in Alberta Canada, has put the U.S. in a unique position to see energy independence but it requires an investment in infrastructure.
Monthei said they looked at every scenario with pros and cons for the route. Their preferred route avoids heavily populated areas that are likely to grow, which could be a conflict in the future, Monthei said.
In Carlton County, he said farmers had suggestions for the pipeline route to meander a bit to have less of an impact on organic farming and Monthei said they were able to accommodate that.
“We are listening very closely to all of the suggestions for alternative routing,” Monthei said.
Enbridge says its expansion plans will help the state’s economy grow.
In the Midwest, Enbridge states 4.36 million barrels of refined petroleum products are consumed every day. Enbridge reported its line will replace an estimated 4,354 trucks or 2,052 railcars and create 1,600 construction jobs considering both the Sandpiper project and Line 67.
Enbridge’s goal is to move the Bakken light crude to U.S. and eastern Canadian refineries producing fuel. Enbridge expects half of the 1,500 construction jobs to be local hires in Minnesota. There are expected to be 3,000 construction jobs overall.
Additionally, Enbridge points to long-term benefits from property taxes noting it paid $34 million in state property taxes in 2011. Enbridge expects to pay about $25 million annually in property taxes for Sandpiper after the first operational year.
Enbridge has been in Minnesota for 65 years. It has nearly 400 employees in the state and offices in Duluth, Minn.
Enbridge reports more than 75 percent of the the proposed Sandpiper route it prefers follows existing utility rights-of-way. Enbridge’s goal is to have the pipeline completed in 2016.
“Sandpiper will be a key, long-term link from North Dakota to a variety of markets,” Enbridge stated. “It will transport Bakken crude to Enbridge terminals in Clearbrook, Minn., and Superior. From these terminals, the crude oil can be shipped on Enbridge and other pipelines to Midwest and North American refineries.”
Enbridge reported in the last decade, “it has moved 13 million barrels of crude oil with a safe delivery record better than 99.999 percent.” The company has nearly 15,000 miles of pipeline in the U.S. and Canada and more than 2,000 in Minnesota.
But there have been spills.
In 2010, Enbridge reported a 30-inch pipeline rupture near Marshall, Mich., which released 843,000 gallons ultimately into the Kalamazoo River. The Environmental Protection Agency reported the spill was contained to about 80 river miles from Lake Michigan. Dredging activities continued this summer at Morrow Lake and the delta to remove oil-contaminated materials.
Monthei said any spill is unacceptable but the safety record for pipelines is good and the probability of a leak is low.
“It was absolutely a terrible day for Enbridge, as well as the residents,” Monthei said of the Marshall, Mich., spill. “And we’ve worked hard to see there is not going to be a repeat to that.”
New technology in coatings and quality control, including X-rays of weldings, and other inspection tools to find cracks or compression or stresses in the line are all combining to make it safer, Monthei said. The answer, he said, is to use the latest technology and monitor it but at no time is a leak, especially in Minnesota, acceptable. The primary focus is prevention and there is a spill response plan to clean things up as quickly as possible, Monthei said.
“We live in this area,” Monthei said. “Protecting the environment is extremely important. That is the No. 1 priority, that and safety of course.”
In the aftermath of Marshall, Mich., more effort went into training and since then new control systems were brought in and narrowed the work each technician is required to do. As a result, he said, pipelines are getting safer and will get better as technology continues to improve.
“We’ve learned lessons,” Monthie said. “We’ve invested heavily to make sure that type of situation doesn’t occur.”
Possible Line 67 expansion
Enbridge is proposing to expand its Line 67 to what it reports is the full design capacity of 800,000 barrels per day. Line 67 runs through Cass Lake and Deer River as it flows from North Dakota to Superior, Wis. By adding and modifying pump stations, Enbridge reports it can increase the capacity without constructing any pipeline. Planned in two phases, phase one increases Line 67 from 450,000 barrels per day to 570,000. Phase two brings the capacity up to 800,000 barrels per day annually for heavy crude oil. Phase one is under way. Phase two, which includes the pump stations in Cass Lake and Deer River, is expected in mid-2015.
Enbridge reports the Line 67 upgrade in phase two could bring as much as $2.253 million in additional annual property taxes to Minnesota, generate $360 million in economic impact during construction and represents a nearly $160 million investment in new energy infrastructure. Enbridge stated it worked with wildlife preservation groups to acquire 760 acres in Aitkin County for a wildlife management area with critical habitat.