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Another Oil Pipeline Blow As Court Rules Against Enbridge Line 3

Enbridge’s Line 3 pipeline replacement project ran into another unsurprising roadblock on Monday after a Minnesota State Court of Appeals ruled that its environmental assessment just wasn’t good enough.

The ruling is a reversal of Minnesota Public Utilities Commission’s decision that approved the environmental impact statement for the pipeline replacement.

The project plans to replace Enbridge’s existing 282 miles of 34-inch pipeline with 337 miles of 36-inch pipe. The appellate court found today that the Commission erred when it approved the plan, and found that Enbridge’s environmental impact statement lacked in specificity, specifically where it deals with oil spills in relation to Lake Superior.

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The new Line 3 would have the capacity to move 370,000 barrels of oil per day, alleviating the takeaway capacity constraints that Canada is facing. Line 3 is one of two pipeline projects in the works that are—in their unfinished state—keeping Canada’s oil industry from reaching its potential.

Line 3 has faced numerous legal challenges and has been approved and disapproved several times over.

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Enbridge has pushed back its startup date, which was originally supposed to be at the end of 2019. The latest date given, prior to today’s loss, was in H2 2020.

Enbridge Inc. (NYSE: ENB) was trading down on the unfavorable news at $35.53 per share (-3.64%).

Enbridge is also struggling to get its Line 5 replacement project in Michigan off the ground. The company is in talks with Michigan Governor Gretchen Whitmer on how to proceed. One option being considered is shutting the aging Line 5.

Meanwhile, oil is still flowing through both of the aging lines—a real concern as aging pipelines come with a higher risk of leakages.

By Julianne Geiger for Oilprice.com

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