Cross-border pipeline switch allowing more Canadian crude into Minnesota is legal, judge rules

A federal judge on Wednesday denied environmental and tribal groups' request to block increased crude oil shipments from Canada to the United States via two parallel pipelines that Enbridge Energy reconfigured at the border to skirt a regulated capacity limit on one of them.

Senior U.S. District Judge Michael Davis in Minneapolis ruled that the U.S. State Department's 2014 approval of the change is not subject to judicial review because it is part of a presidential determination related to the company's cross-border pipeline permit.

The ruling means that Calgary-based Enbridge can continue shipping higher volumes on its recently expanded 1,000-mile Alberta Clipper pipeline from Alberta, across northern Minnesota to Superior, Wis., even though the State Department hasn't completed a supplemental environmental study of the expansion.

Activist groups trying to block imports of carbon-intensive crude oil from the Canadian oil sands region said they may appeal.

"We are disappointed with the decision, which essentially says 'the courts can't help you,' " Vermont Law School Professor Ken Rumelt, lead attorney for a coalition of six groups, including Honor the Earth and the White Earth Nation, said in a statement.

Cross-border permits govern how much oil can be shipped into the United States. The same type of permit was at the heart of controversy over the proposed Keystone XL pipeline from Canada through western states, a project President Obama rejected in November.

For the Enbridge cross-border switch, the pipeline operator rebuilt a 17.5-mile segment of its older, underused pipeline called Line 3, which has a border permit that allows higher volumes than the line now delivers. Enbridge also installed valves to shift the flow of oil from the larger Alberta Clipper line into Line 3 and vice versa. After crossing the border, the oil shifts back to the original lines.

The result is that Enbridge has temporarily increased the overall flow in its Alberta Clipper, also known as Line 67, using the older line's permit. Anti-pipeline activists said the switch circumvented environmental review of the expansion project — a position Enbridge rejected.

"Today's decision leaves in place the State Department's approval of Enbridge's use of Line 3 and Line 67 consistent with its existing permits," Enbridge spokeswoman Lorraine Little said in an e-mail. "The interconnections are simply leveraging the flexibility we have under our existing permits to meet our obligations to shippers and to continue the vital service of transporting reliable, secure supplies of North American crude oil."

Enbridge says the border switch is temporary because the company has proposed a $7.5 billion project to rebuild Line 3, which also goes from Alberta to Superior, but operates at reduced volume because of its history of leaks. If the replacement project is approved, Line 3 eventually will need all of its cross-border capacity, probably sometime in 2017.

By then, Enbridge is hoping the U.S. State Department will have approved an expanded Alberta Clipper border permit, allowing it to ship up to 800,000 barrels of oil daily without the border switch. Enbridge already has added pumping stations in Minnesota to boost that pipeline's capacity after winning approval from state regulators.

In a joint statement, White Earth Nation, Sierra Club, Center for Biological Diversity, Indigenous Environmental Network, National Wildlife Federation and Honor the Earth said they are considering various legal options, including a possible appeal of the Davis ruling.

The ruling, based strictly on legal issues, came one day after a National Academies of Sciences report found that heavy Canadian crude oil — a type carried in both pipelines — poses a special risk when spilled into waterways. Researchers said the diluted bitumen can quickly turn into a thick, hard-to-recover residue that doesn't degrade and whose toxic effects are poorly understood.

David Shaffer • 612-673-7090 @ShafferStrib