Enbridge says its oil pipelines across northern Minnesota are so full that its customers' demands aren't being met, rejecting a recent state report that found no need for a new, $2 billion-plus pipeline proposed by the company.
Enbridge made its rebuttal in a filing Wednesday with state utility regulators, the latest salvo in a battle over the company's plans to replace its aging and corroding "Line 3" with a new 340-mile pipeline. Line 3 is one of six Enbridge pipelines that transport Canadian oil from the northwestern corner of Minnesota to a large terminal in Superior, Wis.
"The system is essentially full today, and demand for pipeline capacity will grow under even the most conservative estimates," Guy Jarvis, Enbridge's liquids pipeline president, said Wednesday in a conference call with reporters.
Last month, the Minnesota Department of Commerce concluded that Enbridge's pipeline corridor, which moves about 2.5 million barrels of oil daily across Minnesota, has enough capacity to meet the state's long-term oil needs without a new Line 3. The report could be a major roadblock for Calgary-based Enbridge, as the department represents the public interest in matters before the Minnesota Public Utilities Commission (PUC), which is scheduled to decide Line 3's fate in April.
The Commerce Department declined to comment on Enbridge's new PUC filings, saying it plans to file a formal response to Enbridge's rebuttal.
Enbridge's pipelines provide most of the oil used by Minnesota's two refineries, and they serve Great Lakes refinery markets as well as the Gulf Coast, to a lesser extent. Already, Enbridge is rationing Minnesota pipeline capacity, meaning the company is unable to meet oil shippers' full demand, Jarvis said.
The current Line 3 is operating at 390,000 barrels per day — well short of its 760,000-barrel capacity — because of safety concerns. Enbridge says the replacement line would not only provide a needed safety upgrade from the current 1960s-vintage pipeline but also restore the flow to an average of 760,000 barrels per day.
The replacement line would have a maximum capacity of 844,000 barrels. Enbridge says it will close the current Line 3 after a replacement is built.