Minnesota regulators on Thursday approved a $125 million upgrade to a pipeline that delivers North Dakota and Canadian crude oil to the Twin Cities' two oil refineries.
Crude oil pipeline serving Twin Cities refineries to get $125M upgrade
July 31, 2015 at 2:27AM
Unlike other pipeline projects, this one provoked almost no controversy. The construction, to begin next year with 40 to 50 workers and finish in 2017, doesn't require laying new pipe, and won't significantly increase the overall flow of crude oil from a terminal in Clearbrook, Minn.
Minnesota Pipe Line Co., owner of four pipelines that are the sole source of the refineries' crude oil, plans to build six new pump stations and upgrade two others along the 305-mile route. The 24-inch-diameter pipe was installed in 2008, and sized so its capacity could be increased. Once known as MinnCan, it is now called simply Line 4.
While the extra pumps will more than double the line's capacity to 350,000 barrels per day, the company said the expansion is needed so that all the oil can be shifted to Line 4 when three older pipelines undergo maintenance. All of them are decades old, and require more maintenance.
New pumping stations will be built in the counties of Hubbard, Wadena, Morrison, Meeker, McLeod and Scott. Two pumping stations at Clearbrook and near Albany, Minn., will be upgraded.
The pipeline company is co-owned by Flint Hills Resources, owner of the Pine Bend refinery in Rosemount; Northern Tier Energy, owner of the St. Paul Park refinery; and a third investor. The pipelines are operated by Koch Pipeline Co., which like Flint Hills Resources is a unit of Koch Industries.
The Minnesota Public Utilities Commission voted 4-0 to grant the project a certificate of need, a key regulatory hurdle. The commission considered but dropped the idea of requiring the pipeline to have a carbon-neutral footprint if oil shipments increased substantially in the future.
Eric Swanson, an attorney for Minnesota Pipe Line Co., said that when Line 4 is used to relieve the other pipelines serving the refineries, it will operate more efficiently and draw less power. That means its footprint is carbon-neutral unless at some future date the overall oil flow increased.
Pipelines are major consumers of power, however. Enbridge Energy, which owns most of the other crude oil pipelines in Minnesota, has estimated that a single pump station on one of its larger lines consumes $11,200 worth of electricity per day.
In a recent upgrade to one of its pipelines, Enbridge offered to offset any additional power use with renewable energy — part of a broad corporate mission to remain carbon neutral. Enbridge, based in Calgary, also is in the renewable energy business, owning 14 wind farms and four large solar projects.
Commission members said they were reluctant to impose the same carbon-neutral condition on the unwilling Minnesota Pipe Line Co. without knowing what the potential future costs might be.
David Shaffer • 612-673-7090 Twitter: @ShafferStrib
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