Three pipeline setbacks in two days, and pressure intensifies on Minnesota project

Story by Mike Hughlett  • Photo by Richard Tsong-Taatarii • Star Tribune staff

The oil and gas industry has been stunned in the past two days by three more big pipeline setbacks, including a court-ordered temporary closure of the Dakota Access, the main artery for North Dakota's crude.

A federal judge in Washington, D.C., on Monday ordered the Dakota Access pipeline to shut down for a more thorough environmental review — three years after it began operating.

That decision emerged a day after two big energy companies canceled a 600-mile, $8 billion natural gas pipeline across West Virginia, Virginia and North Carolina. Dominion Energy and Duke Energy had been trying to build the Atlantic Coast Pipeline for six years, but pulled the plug after what they called an "unacceptable" level of delay and uncertainty.

And late Monday, the U.S. Supreme Court handed another setback to the Keystone XL oil sands pipeline from Canada by keeping in place a lower court ruling that blocked a key environmental permit for the project.

Several other pipeline projects in the U.S. and Canada have been delayed or even stopped in recent years. In Minnesota, pipeline operator Enbridge Energy Co. and opponents continue to clash over the future of one of the main oil pipelines in the state.

"Fossil fuel and pipeline economics are shaking," said Winona LaDuke, director of Honor the Earth, a Minnesota-based Indigenous environmental group.

Environmental groups and Indian bands across North America have fiercely opposed new fossil fuel pipelines — fearing spills and further climate degradation — while regulators and courts have increased their scrutiny.

Construction of the Dakota Access pipeline stoked massive protests in 2016 and 2017 in North Dakota, led by the Standing Rock Sioux Tribe. The $3.8 billion pipeline, which runs to Illinois, crosses under a lake that provides the tribe's water supply.

In Minnesota, environmental groups, including Honor the Earth, and some Ojibwe bands, have been fighting Enbridge's proposed new Line 3, a 340-mile, $2.6 billion pipeline that would ferry Canadian oil to the company's terminal in Superior, Wis.

Calgary-based Enbridge said in a statement it "remains committed to moving ahead with (Line 3) construction once all permits have been received." New Line 3 would be one of the biggest construction projects in Minnesota in recent history.

Enbridge said it doesn't expect the Dakota Access decision to affect Line 3. However, the decision seems likely to affect Enbridge on a different level: It owns a 28% stake in the Dakota Access.

In August 2016, Enbridge invested $1.5 billion in the Bakken Pipeline System, which includes the Dakota Access. A month later, Enbridge dropped its controversial Sandpiper project, a $2.6 billion pipeline that would have transported North Dakota oil to Superior and beyond.

While Dakota Access became a sort of replacement for Sandpiper, Enbridge's new Line 3 is a replacement for an existing pipeline that is corroding and for safety reasons runs at only 51% capacity.

Line 3 has been winding through the Minnesota regulatory process and court system for six years.

Enbridge will miss another construction season this year as it has yet to get all necessary permits for Line 3. And the company is sure to face appellate court challenges of critical permits.

A shutdown of the Dakota Access pipeline would likely have minimal effect on the Twin Cities' two oil refineries — Flint Hills Resources in Rosemount and Marathon Petroleum in St. Paul Park.

Both use some North Dakota crude, particularly Marathon's operation. But that oil is primarily shipped out of North Dakota on a separate Enbridge pipeline.

Mike Hughlett • 612-673-7003