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Enbridge pushes back pipeline projects, Cost of Sandpiper, Line 3 likely to rise; company points to delay in permitting as cause

ST. PAUL -- Another delay on the time table of two oil pipeline projects in northern Minnesota has opponents of the projects declaring victory. Enbridge Energy, the company behind the proposed Sandpiper and Line 3 projects, announced this week bo...

ST. PAUL -- Another delay on the time table of two oil pipeline projects in northern Minnesota has opponents of the projects declaring victory.

Enbridge Energy, the company behind the proposed Sandpiper and Line 3 projects, announced this week both pipelines won’t be ready until early 2019.

December’s decision by the Minnesota Public Utilities Commission to require a fully completed environmental impact statement to be done by state agencies before either project gets approved is likely to drive the cost of both projects higher, according to an Enbridge press release. Spokeswoman Lorraine Little confirmed costs were likely to rise, although the release nor she were able to state exactly what the new price tags would be.

The Sandpiper project was originally scheduled to come online this spring. The 616-mile pipeline from the North Dakota Oil Patch to Superior, Wis., and was expected to cost $2.6 billion. The Line 3 replacement would run from northern Alberta to Superior. The 1,031-mile project was estimated to cost $7.5 billion, with the American portion costing $2.6 billion.

The reason behind years of delays for the projects -- Sandpiper was originally scheduled to be completed this year, with Line 3 re-opening in 2017 -- is solely on the unusually slow regulatory process the pipelines are receiving in Minnesota, Little said Wednesday.

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“It really has all to do with the written orders we’ve received” from the state’s Public Utilities Commission, she said. “We filed our petition for reconsideration… but we don’t have an exact schedule that says ‘these are the next steps.’”

What Enbridge is asking the commission to reconsider is its December decision to require a fully completed environmental impact statement to be done by the state before proceeding with approval of the projects. The commission has 60 days to consider Enbridge’s petition.

“We support (an EIS),” Little said. “It’s that they’re requiring it to be in its final form, and that’s not typical.”

In past applications, the PUC has normally allowed an EIS to be developed while other steps of the regulatory process have been worked on, Little said.

The requirement of the final EIS is a real victory, says Richard Smith, president of Friends of the Headwaters, which has stood in opposition of the projects’ routes through northern Minnesota’s lakes country. Enbridge has proposed Sandpiper and Line 3 follow a shared corridor from Clearbrook in northwest Minnesota to Superior.

“Our position from the beginning is that if projects of this magnitude is going to be done, a complete EIS needs to be done,” Smith said. “Had the company embraced that in the first place, it’s possible the company may have completed construction of their pipeline by now. It may not have been on the route they wanted, but it may have been over with.”

Minnesota Gov. Mark Dayton said Wednesday that if the PUC needs more staff to deal with the two Enbridge projects, he will ask the Legislature for more funds when he submits a revised budget to lawmakers next month.

He told reporters he can support adding staff if the commission needs it "in order to keep things moving along that project, or any project, on a timely basis." He said he already made that offer to the commission.

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"These are huge projects," Dayton said of the pipeline plans.

Attempts to reach PUC Executive Secretary Dan Wolf on Wednesday regarding Dayton’s offer were unsuccessful.

The governor had suggested ways to speed up the general permitting process, not just for the Enbridge projects, but lawmakers did not act on them two years ago.

Dayton said there is little more he can do to speed up pipeline construction. State law requires "hands off by the governor and the administration" in making pipeline permitting decisions. "I support that."

House Speaker Kurt Daudt, R-Crown, has blamed the Dayton administration for slowing progress on pipelines and northeastern Minnesota copper and nickel mines.
The delays are “A win for pipeline opponents, and a win for (regulatory) process,” said Andy Pearson of MN350, an environmental group which has staged regular protests across the state against oil extraction and transportation. He says the state could also benefit from the delays.

“The only thing you need to do is open up the newspaper or turn on the TV,” Pearson said. “What’s happening in the Bakken right now, with so many companies pulling out of production… demand for that oil is drying up. Enbridge has to be hearing this internally.

North Dakota oil production has been slipping, but remains above 1 million barrels per day; the number of drilling rigs operating in the state has gone from more than 170 to just over 40.

“If collectively, we avoid construction of a project that is risky, and ultimately not needed, that’s a win for the state and those who would have had to work on (constructing) a dangerous project.”

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Forum News Service reporter Don Davis contributed to this report.

Related Topics: LINE 3 REPLACEMENT PROJECT
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