A Minnesota legal verdict Monday ordered additional environmental review for Enbridge Inc.’s oil export Line 3 pipeline replacement, raising fears that the one-year delay already holding back the $9-billion project will grow longer.
In a two-to-one split decision the majority on a three-judge panel of the Minnesota Court of Appeals directed the Minnesota Public Utilities Commission (MPUC) to insert an additional oil spill chapter into its final environmental impact statement (FEIS) on Line 3.
An Enbridge statement described the ruling as a disappointing judicial conclusion about a FEIS that deserves high regard for being "based on the most extensive environmental study of a pipeline project in state history."
The firm vowed to work with Minnesota permitting agencies to determine the verdict’s practical effects on construction. Enbridge’s share price fell by 4.7% to C$47.42/share ($35.23/share) after financial analysts called the court ruling a new delay risk.
Completion of the Line 3 replacement would revive growth prospects for Canada’s top natural gas consumer, northern Alberta thermal oil sands production, by adding export capacity for 370,000 b/d.
The Minnesota court verdict rejected all but one of multiple challenges -- a demand to assess risks of an oil spill into the Lake Superior watershed -- against the project by environmental and native opponents.
No stop-work injunction was included in the ruling. A decision is still awaited in a separate case on other aspects of state approvals besides the environmental statement.
“The FEIS properly defined the purpose of the project, sufficiently identified alternatives, including a ‘no action’ alternative, and utilized an appropriate methodology to analyze potential impacts from oil spills. The FEIS adequately analyzed potential impacts to greenhouse gas emissions, potential impacts on historic and cultural resources, the relative impacts of alternative routes, and cumulative potential effects,” said the Minnesota appeals court verdict.
“However, the [utilities] commission acted in a manner unsupported by substantial evidence and arbitrary and capricious when it determined the FEIS adequate despite its failure to address the issue…of how an oil spill from Enbridge’s Line 3 project would impact Lake Superior and its watershed. Accordingly, we reverse the commission’s adequacy decision and remand for further proceedings consistent with this decision.”
The decision follows an MPUC rejection in March of a petition for reversal of its June 2018 Line 3 approval decision.