Enbridge takes two steps forward on controversial Line 3 oil pipeline project

Enbridge this week took two steps forward on its controversial oil pipeline project, but the company is still waiting on a Minnesota regulatory process that could take several months to play out.

Labor contracts were signed Tuesday for the $2.6 billion Minnesota portion of the 340-mile pipeline across northern Minnesota to Superior, Wis. On Sunday, Calgary-based Enbridge opened the 665-mile Canadian portion of the new pipeline.

The project will replace Enbridge's Line 3, a 1960s vintage pipeline that is aging and corroding and can operate at only 51% capacity due to safety concerns.

The new Canadian Line 3 will run at 53% of its capacity of 760,000 barrels of crude since the oil must be transferred to the current Line 3 at the Canadian-Minnesota border. Since new Line 3 in Canada is carrying a little more oil than old Line 3 can handle, Enbridge is shunting some crude to its other pipelines at the border.

Enbridge has a six-pipeline corridor across northern Minnesota, the largest conduit of Canadian oil into the U.S.

Enbridge says the new Line 3 in Minnesota — which would restore the pipeline's full flow of oil — is needed for safety reasons. Environmental groups and some Ojibwe bands have fought the new Line 3, which would partly follow a new route. They say it would add to global warming and open a new region of Minnesota waters to degradation from oil spills.

Enbridge in August chose two general contractors to build the Minnesota portion of Line 3, which would be one of the state's largest construction projects in recent history.

Brownsville, Wis.-based Michels Corp. would be responsible for pipeline construction to Clearbrook, Minn.; Precision Pipeline, an Eau Claire-based unit of the Florida-based multinational construction company MasTec, would handle the rest.

Minnesota Limited in Big Lake, an arm of Houston-based CenterPoint Energy, has a contract to build four of eight new Line 3 pump stations; Michels would build the other four.

The contractors Tuesday signed a project labor agreement with four unions that represent workers who would build Line 3: the International Union of Operator Engineers, which represents heavy equipment operators; the United Association, which represents pipeline welders; the Laborers International Union; and the Teamsters.

The Line 3 project is expected to employ 4,000 at its peak, according to the unions. Only construction of the $800 million Essentia Health complex in Duluth would appear to employ more in the next few years, with about 5,600 workers at its peak. Site preparation on that three-year union project started in September.

Pipeline construction is specialized, whereas a big building requires workers from a dozen different trades who come in at different stages of construction.

The unions are hoping that construction on the Minnesota leg of Line 3 starts by "midyear at the latest," said Joel Smith, who is about to take over as president of the Laborers union in Minnesota and North Dakota. The job is expected to take about a year.

However, Line 3 must still clear several regulatory hurdles, including getting permits from state pollution control and natural resources regulators, as well as state approval of an amended environmental impact statement.

Mike Hughlett • 612-673-7003