Enbridge's Line 3 faces new hurdle as Minnesota governor's administration files appeal

The administration of outgoing Minnesota Gov. Mark Dayton has appealed a state regulatory panel's approval of Enbridge Energy's plan to replace its aging Line 3 oil pipeline in the state.

The Minnesota Department of Commerce said the Public Utilities Commission got its decisions wrong because the Calgary-based Enbridge did not introduce, and the panel did not properly evaluate, the kind of long-range oil demand forecast required by state law.

Dayton, who leaves office Jan. 7, said in a statement that he strongly supports the appeal.

He said Enbridge "failed to demonstrate that Minnesota needs this pipeline to meet our future oil demand. In fact, most of the product would flow through our state to supply other states and countries."

Line 3, which was built in the 1960s, crosses northern Minnesota and a corner of North Dakota on its way from Alberta to Enbridge's terminal in Superior, Wisconsin.

Enbridge says it's increasingly subject to corrosion and cracking and can carry only about half its original capacity.

Environmental, Indigenous groups also fighting project

Environmental and Indigenous groups that have been fighting the project argue that the replacement will accelerate climate change because it will carry Canadian oilsands oil, which generates more climate-warming carbon dioxide during the production process than regular oil.

They also say it risks oil spills in the Mississippi River headwaters region, including pristine waters where the Ojibwe harvest wild rice.

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Those groups filed their appeals earlier in the week and welcomed the Commerce Department's decision to join them.

The PUC decided this summer to grant a certificate of need and route permit for the project. It unanimously reaffirmed its approval of the certificate of need last month and the route permit last week, clearing the way for the opponents to turn to the Minnesota Court of Appeals.

'Very disappointing and erroneous': Enbridge

Enbridge spokeswoman Judi Kellner said in a statement that Dayton's statement is "very disappointing and erroneous," and that his Commerce Department's claims "are not supported by evidence or Minnesota law."

Kellner saidEnbridge provided multiple, detailed forecasts showing that there will be demand for the restored capacity on the Line 3 replacement for years to come, and that Enbridge believes the courts will affirm the PUC's decisions.

While Dayton appointed all five members of the commission, the panel operates independently.

The PUC issued a statement saying it stands by its decision to grant the certificate of need, the central issue in the appeals filed this week. Separate appeals of the route permit are expected later.

"The commission based its decision in this proceeding on the applicable law and a full evidentiary record after vigorous input and participation by the litigants and the public," the panel said.

Construction preparations are underway in Minnesota and the short segments in Wisconsin and North Dakota are already in operation.

Enbridge expects to complete the work in Canada by July 1 and put the full replacement pipeline into service in late 2019.

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