Enbridge, opponents make final arguments in northern Minnesota pipeline debate

Minnesota regulators faced a renewed push Wednesday from three state agencies and others to look harder at a different route for a controversial crude oil pipeline through remote, pristine areas of northern Minnesota.

The state Public Utilities Commission is set to take a key vote Friday on the $2.6 billion Sandpiper pipeline that would carry oil from North Dakota.

During the five-hour hearing on Wednesday, Enbridge Energy argued that its project can be built and operated safely through a region sprinkled with lakes and the headwaters of the Mississippi River.

"The project benefits Minnesota," said Enbridge attorney Christina Brusven. "It benefits its economy, its energy supply and public safety."

The state Pollution Control Agency and Natural Resources and Commerce departments urged regulators to further study a partial or complete reroute of the project — one that Enbridge opposes. That route would cross the state farther south, away from many northern lakes and wetlands.

Tribal and environmental groups also testified that they want the cross-state pipeline built elsewhere.

"They couldn't pick a worse route," said Joe Plummer, attorney for White Earth Nation, whose members gather wild rice in off-reservation lakes along that route and fear they could be destroyed by an oil spill.

Among the supporters were labor unions, who stand to get many of the 2,500 construction jobs for their members.

In a presentation similar to a final argument in a court trial, Brusven said the project is needed to meet demand for Bakken oil.

She said the Sandpiper will be a modern, safe pipeline operated by employees who have learned from earlier oil spills, especially the 2010 rupture that spewed crude oil into the Kalamazoo River in Michigan. It also could reduce the frequency of oil trains across the state, she added.

"First and foremost the project will benefit Minnesota's rail system, both its efficiency and its safety," Brusven told the commission and a crowd of 200 people who spilled into a second video-linked room. "Pipelines have lower cost, fewer service disruptions and fewer discharges of oil than rail."

On Wednesday morning, before the formal arguments began, about 100 pipeline protesters gathered outside the PUC's St. Paul office urging that the line be rejected.

"It is time to move on to the post-petroleum era," said Winona LaDuke, a White Earth member and leader of the environmental group Honor the Earth. LaDuke, owner of an organic wild rice business, hauled her dented rice-gathering canoe to St. Paul to the rally.

Inside, members of the Laborers Union made their presence known by wearing identical bright-orange shirts and taking every seat in two rows of the hearing room.

"There is a need for all of this petroleum," said Dan Olson, a Superior-based international representative for the union. "There is a need to get away from our dependence on foreign oil."

The key question the five-member PUC intends to decide on Friday is whether to grant a Certificate of Need. Even if the answer is yes, the project faces a monthslong regulatory review of the company's preferred route and possibly alternatives that Enbridge doesn't favor.

It is not clear what's next if the PUC on Friday rejects the plan — an option some environmental groups endorsed. Enbridge has said other routes wouldn't work, and their extra cost might drive away shippers who have already signed on to use the pipeline.

Under questioning by commissioners, Brusven said Enbridge can't say for sure that crude-by-rail shipments will decline if Sandpiper is built, but that it is likely. Up to 50 oil trains pass through Minnesota each week because North Dakota relies on rail to transport most of its oil to market.

"There is demand for takeaway capacity out of the Bakken," she added.

The route Enbridge prefers runs 299 miles across the state, from the North Dakota border to Clearbrook, Minn., where an oil terminal exists. Then it goes south toward Park Rapids following existing crude oil pipelines and east to Superior, partly along a transmission line. North Dakota has approved its part of the 610-mile pipeline.

The line would carry oil to Enbridge's Superior oil terminal that connects to other pipelines serving refineries in the Midwest and East.

Marathon Oil Co., which is financing 37 percent of the project, plans to upgrade three refineries in Illinois, Ohio and Kentucky to process the oil.

Enbridge, based in Calgary, operates the longest crude oil pipeline system in the world, delivering 2.2 million barrels of crude oil daily in the United States and Canada. It operates eight petroleum pipelines in Minnesota.

Environmental groups and state agencies have pointed to the risk of spills in a region laced with isolated waterways. Opponents to the northern Minnesota route suggested six alternatives south of many pristine lakes.

But those routes also are longer, more costly and closer to people and water supplies. An administrative judge who reviewed the alternatives rejected them, but environmental groups disagreed with those findings, issued in April.

Carlton County Land Stewards, one of the environmental groups that wants more study of the pipeline's risks, contended that not enough science-based review has been done on any of the routes.

"It is a relatively low risk, but when the risk happens it is really catastrophic," said Gerald Von Korff, attorney for the group, who cited as an example the recent oil pipeline spill in Santa Barbara that contaminated shorelines. "Our goal is to get it in a place where the impact and damage is the least."

Friends of the Headwaters, a Park Rapids-based citizens group formed two years ago to fight the project, objects to Enbridge's "take-it-or-leave-it" attitude about preferred route, said its attorney Kathryn Hoffman.

"FOH is not an anti-pipeline organization," said Hoffman, a staff attorney with the St. Paul-based nonprofit Center for Environmental Advocacy. "We have always taken the position that there are alternative routes it is in the interest of the state to consider."

But Enbridge's Brusven said the opponents gave regulators "limited perspectives but not the whole picture. When you look at the whole, the preferred route is by far superior to any of the alternatives." She said 92 percent of easements have been acquired from property owners.

Some opponents, like 350.org, which is focused on climate change, took part in the protest, but didn't make arguments to the PUC. That group and others plan a larger rally on Saturday in St. Paul to protest Enbridge's plans to build a second crude oil pipeline along its Sandpiper route. That project, which is in the early stages of review, would replace and expand a leak-plagued 1960s-era pipeline, called Line 3, that carries Canadian oil to Superior, Wis.

David Shaffer • 612-673-7090

Twitter: @ShafferStrib