Enbridge Line 3 pipeline Growth faces new Obstacle from Minnesota Authorities

Enbridge Inc. has become a severe setback with its projected $7.5-billion Line 3 growth as Minnesota’s Department of Commerce concluded the company hasn’t established a need for the project as required under regulations.

The Commerce Department provided testimony Monday to the Minnesota Public Utilities Commission, which has to issue a certificate of need until Enbridge can enlarge the pipeline throughout the state.

Enbridge proposes to raise the capacity of its main export pipeline by 375,000 barrels every day, with the capability to expand it further later on. The company — which received federal government approval last November for the Canadian part — started construction on Line 3 in Alberta and Saskatchewan this summer.

But, it has faced resistance in Minnesota from environmental groups, landowners and First Nations. It can add the country’s Department of Commerce to this list of opponents.

Western Canadian oil producers are willing to see new pipeline capacity built to meet growing export volumes during the next three decades. Deficiency of capacity will induce producers to turn to more expensive rail, and deprive them of high prices they can fetch on Gulf Coast and worldwide markets.

Winning final approvals for the many projects currently being proposed has been demonstrated to be an uphill struggle.

On Monday, the department published expert analysis and its recommendation on the certificate of need for the Line 3 endeavor.

“The thorough 338-page testimony concludes that Enbridge hasn’t established a need for the proposed project in Minnesota as required under state rules,” it stated.

To the contrary, it indicated Enbridge should be asked to shut down its current Line {}, noting the company has expanded another pipeline Line 67 to help meet demand in Minnesota and the Midwest.

Line 3 now carries crude from Hardisty, Alta., to Superior, Wis., where it’s fed into a network which carries oil to refineries in the U.S. Midwest and, increasingly, to the Gulf Coast.

An Enbridge spokesman said the department’s evaluation “is just a single view,” and that the company and its industry supporters will react to it since the PUC process persists. A decision is expected in 2018.

“This is critical infrastructure, which is being replaced with the most advanced materials, most up-to-date technology and beneath superior construction procedures,” Michael Barnes, a Houston-based Enbridge spokesman, said in an email.

The department’s analysis asserts that Enbridge didn’t provide a sufficient analysis of future demand, and independently finds that Minnesota demand for refined products seems unlikely to gain in the long run.”

It concludes that “in light of the critical dangers and impacts on the natural and socioeconomic environments of the present Line 3 and the limited benefit the present Line 3 supplies to Minnesota refineries, it’s reasonable to conclude that Minnesota will be better off if Enbridge suggested to stop operations of the present Line 3, with no new pipeline being built.”

Courtesy: The Globe And Mail

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