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Minnesota Appeals Court Rejects Line 3 Pipeline Approval

PIPELINE_MANAGER/wikimedia commons

Fossils were disappointed and Enbridge saw its share price fall 4.7% Monday, after a Minnesota appeals court ruled a state regulator had failed to properly consider the impacts of a Lake Superior oil spill in its approval of the proposed Line 3 pipeline replacement.

The project would double the capacity of the existing pipeline to 760,000 barrels per day.

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“In a decision posted online, the Minnesota Court of Appeals ruled that the Minnesota Public Utilities Commission (PUC), a state regulator that approved the Line 3 project last year, acted in a manner that was unsupported by ‘substantial evidence’ when it determined the impact statement was adequate,” Reuters reports. “The impact statement specifically failed to address how an oil spill from the line would affect Lake Superior and its watershed, the court said.”

“I think they’re going to have to take (a potential spill) much more seriously than just some hypothetical modeling and really be conscious about the headwaters of the Great Lakes,” said Honor the Earth attorney Frank Bibeau.

“We believe that the market will negatively view the court decision that casts uncertainty with respect to the timeline for the Line 3 Replacement (L3R) project, and specifically the ability to bring L3R into service” in the second half of 2020, wrote RBC Capital Markets analyst Robert Kwan. He added that it isn’t clear whether Enbridge will have to submit a new environmental impact statement (EIS) for the project, rather than amending its existing one.

Gary Mar, the former Alberta cabinet minister now serving as CEO of the Petroleum Services Association of Canada, said investor confidence in the industry was already at a low ebb before this latest decision. “Whenever there is a delay or some impediment to takeaway capacity, that has a direct effect on the interest of producers in committing capital to projects,” he told [2] The Canadian Press. “Without producers committing themselves to capital projects, there’s no work for our members.”

Enbridge was reviewing the decision and discussing next steps with Minnesota regulators, but said it was disappointed by the outcome after “the most extensive environmental study of a pipeline project in state history.”

The Canadian Association of Petroleum Producers did its best to one-up the U.S. government’s recent rhetoric about “freedom gas [3]”, with Beth Lau, manager of oil supply and transportation, claiming that “Line 3 provides access to U.S. Midwest and Gulf Coast refineries for Canada’s sustainably produced exports. With improved market access, Canada has an opportunity to obtain full value for our resources and help reduce net global greenhouse gas emissions.”

Project supporters in the U.S. pointed out the appeal court upheld most of the 3,000-page project EIS.

“While no one likes further uncertainty, what’s important is the court reaffirmed on numerous counts that the [Public Utilities] Commission acted correctly and produced a final [environmental impact statement],” said [4] Kevin Pranis, marketing manager for the Laborers International Union of North America. “They rejected unanimously nearly all the arguments that were made against it.”

Minnesota Public Radio said pipeline opponents’ response was “relatively muted”, with organizations considering a state Supreme Court appeal for the arguments the lower court rejected.

“We are grateful to the court for recognizing the need to protect Lake Superior,” but “let us protect all water,” said Honor the Earth Executive Director Winona LaDuke. “We will seriously consider an appeal of a decision that will only worsen the impacts of climate change in Minnesota.”

MPR lays out the regulatory process that likely lies ahead, including opportunities for public comment on the revised EIS and oral arguments coming up on several other challenges to the PUC’s original project approval, one of them from the state commerce department.