After three days of hearings, state utility regulators seemed no closer to a final decision on a controversial new pipeline proposed for northern Minnesota.
PUC making its way through the issues in the controversial Enbridge pipeline case
Commissioners are aware of the "magnitude" of their decision, chairwoman says.
June 27, 2018 at 12:57AM
The Minnesota Public Utilities Commission (PUC) on Tuesday juggled topics from financial guarantees for Enbridge's $2.6 billion proposal to replace its Line 3 pipeline, to oil demand and route alternatives for any new pipeline.
The five commissioners will go at it again Wednesday, aiming to end a three-year-plus regulatory saga by Friday.
"Each of the commissioners realizes the magnitude of the decisions they will make this week," said PUC Chairwoman Nancy Lange at the start of the meeting. That may explain the plodding pace of the day's proceedings.
Calgary, Alberta-based Enbridge said the new pipeline is a necessary safety measure. The 1960s-vintage Line 3 is corroding and can only operate at 51 percent of capacity due to safety concerns. A replacement pipeline would restore the full flow of oil to 760,000 barrels per day.
Environmental groups and several American Indian tribes oppose the project, saying a new Line 3 would exacerbate climate change and open a new region of Minnesota lakes, rivers and wild rice waters to degradation from possible oil spills.
Under Enbridge's proposal, the new pipeline would follow Line 3's current route to Clearbrook, Minn., then jut south toward Park Rapids before heading east to Enbridge's terminal in Superior, Wis. The stretch from Park Rapids to Superior currently hosts no pipelines.
Commissioners began talking Tuesday about possible route alternatives to Enbridge's preferred routes.
But tribal attorneys said the entire regulatory process has been so focused on Enbridge's proposed route that the "alternatives" have been treated as an afterthought. And all of them have problems of their own.
"How do you choose something like this?" said Seth Bichler, an attorney for the Fond du Lac Band of Lake Superior Chippewa. "It's like being shot or poisoned."
The PUC also discussed Enbridge's commitment last week to provide a corporate guarantee for the replacement line in case of oil spills. The Minnesota Department of Commerce — which represents the public in front of the PUC — has long insisted on such a guarantee.
The company Friday submitted details of its financial guarantee, which is essentially the same guarantee it would have provided for its proposed Sandpiper pipeline. Enbridge in 2016 shelved Sandpiper, a new pipeline that would have transported North Dakota oil across Minnesota to Superior.
Enbridge and the Commerce Department had reached an agreement on Enbridge's financial guarantee for Sandpiper.
"If it was adequate in the Sandpiper case, why isn't it adequate here?" PUC Commissioner Dan Lipschultz asked the commerce department's Bill Grant.
In retrospect, "there were a lot of things in the Sandpiper case where we were babes in the woods," said Grant, deputy commissioner of energy and telecommunications.
Grant said his department does not believe the Sandpiper provisions for corporate succession — what happens if Enbridge is sold or goes out of business — would be adequate for a new Line 3.
He also noted the last-minute nature of Enbridge's financial guarantee has not given parties — the state, tribes and environmental groups — enough time to respond to Enbridge's proposal. "This is an issue of utmost importance to protect the state of Minnesota and landowners along the route."
The PUC had questions about oil-demand forecasts as well. Two of the commissioners took aim at Flint Hills Resources, owner of one of the Midwest's largest refineries, located in Rosemount.
Commissioners Matt Schuerger and Lipschultz said they were frustrated by not receiving oil-demand forecasts from Flint Hills and other refineries during the regulatory process. "I understand Flint Hills is not here [at the meeting] and I am a little bit frustrated by that," Schuerger said.
Flint Hills, an arm of Koch Industries, has sent three letters to the PUC explaining its support for a new Line 3. However, the company did not become a formal intervenor in the case, which involves hiring lawyers to appear regularly before the PUC.
"I have a hard time giving those letters much weight particularly from a party that has the resources to intervene," Lipschultz said of Flint Hills.
Flint Hills spokesman Jake Reint said in an interview that the company has not traditionally been an intervenor in Enbridge pipeline cases, preferring to send letters. "We have provided everything to the commission that we been asked to provide."
The supply-and-demand forecasts are an important factor in determining whether there is a need to replace Line 3. Currently, Enbridge's entire corridor of six pipelines across Minnesota are in "apportionment," meaning the company must ration space due to a lack of a capacity.
Apportionment will get worse if the new Line 3 isn't built, concluded Administrative Law Judge Ann O'Reilly, who was appointed to make an independent assessment of the case. She recommended Enbridge be granted a certificate of need largely because of the apportionment issue.
Still, Schuerger said, "there isn't evidence in the record of refinery-capacity shortfalls … Regardless of apportionment in the mainline system, they are getting the oil they need."
Mike Hughlett • 612-673-7003
The InPen app paves the way for the launch of the company’s “Smart MDI” system combining a smart insulin pen that tracks doses and a monitor that makes real-time glucose readings for people who make multiple daily injections.
