State Supreme Court asked to step into pipeline battle

The battle over a northern Minnesota crude oil pipeline is now at the Minnesota Supreme Court.

Enbridge Energy and state regulators have asked the state's top court to toss out a recent Appeals Court decision ordering an environmental impact statement for the Sandpiper project, a proposed pipeline to carry North Dakota crude oil to refineries in other states.

If the Supreme Court agrees to review the case, it could mean further uncertainty and delay for the $2.6 billion project that Calgary-based Enbridge hoped to begin building next year. If the high court declines to review the case, the appellate panel's ruling would stand, along with its mandate for a full-scale environmental impact statement (EIS), which also could delay construction.

In separate petitions, Enbridge and the state Public Utilities Commission last week challenged the Sept. 14 ruling by a state Appeals Court panel, saying it had ignored prior court cases and state rules that allow environmental issues to be reviewed in a second stage of the pipeline regulatory process.

Enbridge's attorneys said the Appeals Court was "mandating unnecessary duplication and delay" and should have deferred to the commission, which has authority over crude oil pipeline siting. Attorneys for the commission argued that the first stage of the pipeline review — deciding whether the project was needed — is not a major governmental action, and rejected the appeals court's conclusion that it triggered a mandatory environmental impact statement.

For crude oil pipelines, Minnesota rules allow an environmental study during a separate step — the review of a pipeline's proposed route. That was just about to begin for the Sandpiper, but the commission last week asked Enbridge, environmental groups, state agencies and others for comments on "how best to proceed" in light of the appellate ruling.

The complication in the Sandpiper's regulatory picture is that environmental groups and a state agency suggested alternate routes for the pipeline to avoid the Mississippi River headwaters and pristine northern lakes and wetlands. Enbridge has opposed them, saying they are longer, more costly, carry their own environmental risks and wouldn't meet shippers' needs.

When the commission decided in June that the Sandpiper project was needed, it tossed out most of the alternative routes. They had been subject to some review, but not a full-blown environmental study, with a draft report subject to public comments, followed by a final report. The commission, in its petition, defended its study, saying its "tiered" approach is allowed under the law.

Friends of the Headwaters, a Park Rapids-based advocacy group, and its St. Paul-based nonprofit law firm, the Minnesota Center for Environmental Advocacy, filed the successful challenge over the environmental review.

Leigh Currie, an attorney for the center, said Monday that all regulatory proceedings for the Sandpiper should be postponed until the Supreme Court decides whether it will review the case. If the Appeals Court ruling stands, the regulators' review of the Sandpiper needs to start over with a full environmental review of alternatives, she said.

"The question now is 'How can we keep going now that step one has gone away?' " Currie said.

Enbridge has supported moving ahead with the state review.

David Shaffer • 612-673-7090 Twitter: @ShafferStrib