Minnesota’s Department of Commerce dealt a blow to Canadian pipeline-maker Enbridge with a report that said the replacement of the Line 3 pipe that runs through the state is unnecessary, as is the pipe itself.
Line 3 brings in crude from Canada to a terminal in Wisconsin and passes through northern Minnesota. Enbridge plans to replace the pipeline, which was built in the 1960s, with a new, extended one. This will cost some US$6.5 billion, but environmentalists and the state government believe it will threaten water resources in the area.
The Department of Commerce also believes that the current six-pipeline system that Enbridge runs in Minnesota is enough to accommodate the crude that the state needs over the long term, in light of estimates that show the demand for gasoline and other fuels is unlikely to increase, the department said, adding that local refiners operated near full capacity in any case.
Enbridge has countered the conclusions of the report saying that refiners and oil traders in Minnesota have declared the pipeline replacement necessary and that it will make its own review of the DoC report and present its case to the Minnesota Public Utility Commission. The PUC should decide on Line 3 by the end of April next year.
Currently, Enbridge has a pipeline system with a daily capacity of 2.9 million bpd in Minnesota. Line 3 has been carrying 390,000 bpd since 2010, versus its capacity of 760,000 bpd for safety reasons. This is the grounds for Enbridge’s proposed replacement, but it sparked not just verbal opposition but also protests in Wisconsin, near the end-point of the new pipeline.
Some groups, apparently drawing inspiration from the wide-scale protests against the Dakota Access pipeline, hinted that Line 3 could be the next Dakota Access in terms of protests.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.