Walz says state will continue court appeal of Enbridge pipeline approved by PUC

Gov. Tim Walz will continue pursuing a court appeal started by his predecessor that could block Enbridge from building a controversial $2.6 billion oil pipeline across northern Minnesota.

Under former Gov. Mark Dayton, the Commerce Department appealed the Minnesota Public Utilities Commission's (PUC's) decision to allow Enbridge to build the pipeline, a replacement for its aging and corroding Line 3. Last month, the Walz administration said it would review the appeal.

"By continuing that process, our administration will raise the Department of Commerce's concerns to the court in hopes of gaining further clarity for all involved," Walz said in a statement. "As I often say, projects like these don't only need a building permit to go forward, they also need a social permit. Our administration has met with groups on all sides of this issue, and Minnesotans deserve clarity."

The Commerce Department, an arm of the governor's administration, represents the public interest before the PUC, which is an independent agency whose members are appointed by the governor to staggered six-year terms.

In a statement, Enbridge called Walz's decision "unfortunate," saying the PUC's approval came after a "thorough" review that took four years.

About 30 Republican lawmakers gathered Tuesday morning to slam Walz's decision. Minnesotans had been optimistic Walz would be a consensus-builder and somewhat moderate, said House Minority Leader Kurt Daudt, R-Crown. "And I think he failed that test on this issue," he said.

Senate Majority Leader Paul Gazelka, R-Nisswa, walked through the governor's explanation of his decision. "On every issue there, he was wrong," he said. "Walz and [Lt. Gov. Peggy] Flanagan are the only ones left in the state that need clarity on this project."

Three environmental groups and two American Indian bands also have appealed the PUC's approval of Enbridge's project. The Minnesota Court of Appeals last week dismissed those appeals and Commerce's on a technicality.

The appellate court's dismissal essentially forced a decision on the Walz administration this week. The deadline is this week for pipeline opponents to file a petition for "reconsideration" with the PUC, a precursor to refiling a court appeal.

The court waived refiling fees, and the environmental groups and Indian bands also plan to refile their appeals. The legal arguments in all the complaints are similar, so they would be played out in court whether or not the Walz administration continued the state's appeal.

Still, opponents see Walz's decision as a boost to their cause.

"There is an argument that the state's participation in an appeal like this is unusual enough that it kind of sends a signal to the court to take this really seriously," said Scott Strand, an attorney for Friends of the Headwaters, one of the groups appealing the PUC's decision.

The Commerce Department in its appeal claimed that Enbridge filed an inadequate long-term oil demand forecast as required by state law. The PUC had committed "legal error" by approving the 330-mile pipeline, which would transport oil from Canada, the department argued. Calgary, Alberta-based Enbridge has said such claims are not supported by evidence.

Enbridge's Line 3 plans have put Walz in a tight political spot.

The progressive wing of his DFL Party is adamantly against the new pipeline, saying it's a threat to the environment and indigenous people. The building-trades unions — a core DFL constituency — are resolutely for the pipeline, which is potentially one of the largest Minnesota construction projects in recent years.

"At the end of the day, we are confident that the commission's decision to approve Line 3 replacement will prevail," Tim Mackey, president of the Minnesota and North Dakota region of the Laborers' union, whose members work pipeline jobs, said on Tuesday.

"We don't think there's a court in the land that would overturn the decision based on the weight of the evidence in the record and an unprecedented yearslong review process," he said.

The Sierra Club, Honor the Earth and MN 350, all environmental groups appealing the PUC's decision, applauded Walz for letting the state's appeal play out. So did the White Earth and Red Lake bands of Ojibwe.

"The PUC decision was a rogue decision, contrary to all state agencies and tribal interests," Winona LaDuke, head of Honor the Earth, said in a statement. "We are thankful that Gov. Walz is looking into the clear lack of need for this project in Minnesota."

The Commerce Department since late 2017 has been opposed to a new Line 3, saying there's not enough long-term oil demand to merit it given the possible environmental consequences.

The PUC voted 5-0 on June 28 to approve new Line 3, with commissioners saying the decaying state of the current pipeline drove their decision.

The 1960s-vintage Line 3, one of six Enbridge pipelines across northern Minnesota, operates at only 51 percent capacity due to safety concerns. Enbridge said safety would be greatly enhanced with a new Line 3, which would also restore the full flow of oil — 760,000 barrels per day.

Opponents of the new Line 3 said it would exacerbate climate change. Since the pipeline would partly follow a new route, the pipeline would open a new region of lakes, rivers and wild-rice waters to degradation from oil spills.

Before the election last November, Walz said he was satisfied with the PUC's decision to move forward with the new Line 3. Still, Walz's position hasn't always been clear. In an August 2017 tweet, he said any pipeline that goes through treaty rights lands is a "non-starter for me."

The new pipeline would cross land on which American Indians claim rights to hunt, fish and gather under treaties forged in the 19th century.

Enbridge has told its investors that it expects the new Line 3 — which starts in northern Alberta — to be operational by Nov. 1. While construction is proceeding in Canada, the company still must get state and federal environmental permits.

Walz is trying to find some middle ground on the Enbridge issue, said Senate Minority Leader Tom Bakk, D-Cook, who has said in the past that he looks forward to the completion of the new pipeline.

Bakk said he wants to know if Walz thinks the factors the PUC considered before approving the project were inadequate. If so, Walz should suggest a change in state law, he said.

"I think the PUC did their job, and they acted within the statutory authority that they were given and they found no reason not to issue it," Bakk said.

Star Tribune staff writer Jessie Van Berkel contributed to this story. Mike Hughlett • 612-673-7003