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Enbridge Oil Pipeline Replacement in Minnesota Draws Pushback

The Minnesota Department of Commerce has recommended the state shut down and not approve a pending oil pipeline replacement project by Enbridge Inc.

Commerce staff formally advised the Minnesota Public Utilities Commission (PUC) against Enbridge's proposal to build a replacement for part of Line 3, a 1960s era, 1,097-mile crude oil pipeline that extends from Edmonton in Western Canada to Superior, WI. The agency said in legal filings that the state would be "better off if Enbridge proposed to cease operations of the existing pipeline" instead.

The five-member Minnesota PUC is expected to make a final decision on the replacement project next April.

Commerce officials said Minnesota's demand for gasoline, and local refineries' capacity for processing crude oil, was unlikely to increase over the long-term, while the proposed pipeline could pose risks to the environment and the Ojibwe Native American Tribe's rice harvest lands.

Enbridge has proposed the replacement in the northern part of the state to enhance its "safety standards, reduce future maintenance activities and create fewer disruptions to landowners and the environment, and restore its historical operating capabilities."

Enbridge has maintained that it needs to replace the existing pipeline because it has had to cut in half the line's volumes from its original 760,000 b/d capacity to accommodate increasing maintenance.

According to the plans by the Edmonton-based pipeline company, a 36-inch diameter pipeline would replace the existing 34-inch diameter pipeline along most of the Line 3 route, which in the United States would follow an existing route from Joliette, ND, to Clearbrook, MN, after which it would primarily follow existing pipeline/transmission routes from Clearbrook to Superior, WI.

"Line 3 has been, and continues to be, an essential component of Enbridge’s pipeline transportation network to deliver the crude oil needed by refiners, and used by residents," an Enbridge spokesperson said. "The replacement of Line 3 will ensure that Enbridge can transport the crude oil required by refiners in Minnesota, neighboring states, Eastern Canada and the Gulf Coast.

"Commerce has drawn the most attention by asserting that Enbridge has failed to make the case the project is needed," said Washington, DC-based consulting firm ClearView Energy Partners. Analysts regard the agency’s “comments as an incremental, but potentially surmountable, obstacle to Line 3's approval given where we are in the review process." 

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