Enbridge Inc. still expects to complete and begin service by the end of the year on the contested $2.6 billion leg of the Canadian oil export pipeline now under construction across 240 miles in Minnesota, CEO Al Monaco said Wednesday.
“Work is on schedule” for Enbridge Line 3, Monaco said at a Scotiabank CAPP Energy Symposium held by the investment bank with the Canadian Association of Petroleum Producers. “We’re making sure we’re living up to the letter of the permits.”
Canadian exporters, led by the country’s top natural gas user, Alberta thermal oilsands production, are forecast to gain 370,000 b/d of capacity with the updated Enbridge system. The pipe construction replaces a 53-year-old system to enable higher operating pressure.
Other legs of the total $9 billion, 1,031-mile program are complete in Canada, North Dakota and Wisconsin. Final construction began last fall after the Minnesota Pollution Control Agency, Minnesota Public Utilities Commission (MPUC) and U.S. Army Corps of Engineers granted permits that ended a six-year regulatory ordeal.
Monaco acknowledged that pipeline foes continue to fight Line 3 with court challenges and demonstrations along the Minnesota right-of-way by protestors that include the Water Protectors and native rights champions.
The groups hold prayer ceremonies and members have chained themselves to project hardware on the right-of-way. An 18-county police squad called the Northern Lights Task Force, created by the MPUC with Enbridge directed to pay its costs as an approval condition, is tasked with reopening obstructed work sites and removing interfering protesters.
Monaco defended the project. “We’ve got a very strong regulatory record,” he said. The Calgary pipeline giant has to date won the legal rulings to advance construction.
Environmental and tribal opponents of the project lost winter fights for stop-work injunctions in the Minnesota Court of Appeals and U.S. District Court for the District of Columbia. The protesters have vowed to pursue their cases.
A verdict is awaited from the Minnesota high court on an appeal that Democrat Gov. Tim Walz directed the state commerce department to file against the MPUC project approval. The complaint said the MPUC erred by using Enbridge delivery contracts as a proxy for U.S. oil demand.
Reliance on Canadian heavy crude is built into U.S. refinery production lines and economics, according to a report on oil trade between the two countries that the American Petroleum Institute (API) is circulating.
“The importance of Canadian heavy crude oil to the United States has increased over the past 20 years,” said the API report by ICF Resources LLC.
“As Canadian heavy oil production has ramped up, U.S. refiners have increasingly configured their facilities to take advantage of discounted heavy crudes, particularly in the Midwest and Gulf Coast regions,” said researchers.
Switching to light high-value grades like U.S. unconventional oil would cut profits, said the report. “Furthermore, refiners that have invested in processing high percentages of heavy crude may have difficulty adapting their operation to process lighter crudes.”
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