Fond du Lac agrees to let Enbridge's new pipeline cross its reservation

The Fond du Lac Band of Lake Superior Chippewa has agreed to let Enbridge build part of a controversial new oil pipeline on tribal land, a deal that includes extending Enbridge's presence on the reservation by 10 years.

Neither Fond du Lac nor Enbridge released financial details of the agreement, though if recent history is any guide, the tribe could be getting millions of dollars in compensation.

Also, the Fond du Lac band will no longer oppose Enbridge's overall project to replace its Line 3, which crosses the reservation, a spokesman for the band wrote in an e-mail. The tribe also has dropped its appeal of state regulators' approval of an environmental-impact statement for the new Line 3, though it says it reserves the right to intervene in that case.

The agreement announced Friday is essentially a renegotiation of a right- of-way deal for all six Enbridge pipelines that cross 13 miles of the Fond du Lac reservation. Under the new agreement, Enbridge's rights of way will be extended by 10 years to 2039 from their current expiration dates in 2029.

"The benefits to the band far exceed the potential alternatives, and the agreement was the result of months of extensive consideration and strong advocacy on behalf of the band," Kevin Dupuis, Fond du Lac's chairman, said in a statement.

Calgary, Alberta-based Enbridge now operates the six pipelines in a single corridor, ferrying Canadian oil across northern Minnesota to the company's terminal in Superior, Wis.

The Fond du Lac band and several other Minnesota Ojibwe groups have fought fiercely against Enbridge's new Line 3. Tribal and environmental groups argued that the project, which partly follows a new route beyond Enbridge's existing pipeline corridor, would open new regions of pristine waters to environmental degradation from oil spills.

But the Minnesota Public Utilities Commission (PUC) in late June voted to approve the $2.6 billion pipeline, essentially agreeing with Enbridge that the existing aging and corroding Line 3 is too much of a safety hazard. Line 3 is operating at only 51 percent capacity due to safety reasons; the new pipeline will restore full capacity.

In June, the PUC also adopted Enbridge's proposed pipeline route, except for a small portion near McGregor, Minn.

The PUC opted to move the route farther from Big Sandy Lake, which has particular cultural significance to the Ojibwe. The alteration involves either running a stretch of new Line 3 much closer to the Fond du Lac reservation or using Line 3's existing corridor through the tribe's land.

Fond du Lac chose the latter for several reasons it outlined in a statement, including: The old Line 3 will be removed; band members will have — due to pipeline changes — access to portions of the reservation that have been inaccessible; and the band will be compensated for the "costs of having the pipelines located through the reservation."

The band would not comment further on the compensation. But Indian tribes — after long getting only a pittance for pipeline rights of way — have been increasingly driving a hard bargain.

In 2009, both Fond du Lac and the Leech Lake Band of Ojibwe negotiated new 20-year rights-of-way deals with Enbridge. Leech Lake, which also hosts all six of Enbridge's pipelines, received around $10 million. Fond du Lac's settlement was believed to be around $17 million. In comparison, Enbridge paid Fond du Lac $1,537.50 under a long-term easement approved in 1974, the band has said in PUC filings.

Last fall, the Lac Courte Oreilles Band of Lake Superior Chippewa agreed to a new 25-year easement for two Enbridge pipelines that run through its reservation in northwestern Wisconsin. Annual payments over the agreement's terms amount to around $60 million.

Fond du Lac is one of four Ojibwe bands that — along with two environmental groups — have not only fought consistently against a new Line 3, but have appealed the PUC's approval earlier this year of an environmental-impact statement for the project.

The Leech Lake band made it clear during final Line 3 hearings that it would rather have a new pipeline than the continued use of the old one. The new Line 3 would not cross the Leech Lake reservation, and the old Line 3 is slated to be removed.

Mike Hughlett • 612-673-7003