Minnesota's Commerce Department says there's no need to replace an aging oil pipeline across the northern part of the state. The agency suggested Monday that the existing Enbridge Energy line should be shut down and not replaced.
It's just a recommendation because the final decision about whether to build a new line belongs to a different group, the state's Public Utilities Commission (PUC). But the 338 pages of analysis from the Commerce Department will add to the argument against the plan to replace Enbridge's Line 3.
Why not replace it?
The Commerce Department had experts in oil markets and the insurance industry help them analyze the need for the Enbridge project, which would replace a line that was built in the 1960s and is now operating at half its capacity to help guard against any accidents.
Line 3 carries crude oil from the Canadian tar sands to a refinery in Superior. Enbridge says a new replacement would be more efficient and safer.
In a statement explaining its recommendation Monday, the Commerce Department said refineries in the Upper Midwest are operating pretty close to capacity right now. So there isn't room for a lot more oil, they said.
Their oil market analyst also says Minnesota's demand for petroleum is not likely to increase in the long term.
The department noted that Enbridge is also asking for permission to expand a different pipeline through Minnesota (Line 67, nicknamed the Alberta Clipper).
That line opened seven years ago. It can carry 800,000 barrels a day but the permit Enbridge has from the U.S. only allows 500,000. The Duluth News Tribune reported that the feds may change the permit by the end of this year.
So, given the environmental risks of building a new Line 3, the limited benefits to Minnesota refineries, and Enbridge's other expansion plan, the Commerce Department concludes "Minnesota would be better off if Enbridge proposed to cease operations of the existing Line 3, without any new pipeline being built.”
Environmental groups and northern Minnesota tribes that oppose the line celebrated the recommendation.
What happens now?
The Public Utilities Commission is on track to decide next spring whether Enbridge needs a new Line 3 – and if so, which of five possible routes it should take. (An environmental impact statement that came out last month looked at the effects of each route.)
Between now and the spring there will be lots more debate about those questions.
There will be a series of nine public hearings starting late this month and continuing through October. Most are in northern Minnesota, with the others in St. Cloud and St. Paul.
Then in early November there will be something sort of like a trial. It's called an "evidentiary hearing" and an administrative law judge will preside over it for a week or so in St. Paul. The Commerce Department says witnesses will testify and be cross examined as they talk about whether there's a need for the pipeline and where it should go.
Once that's over the judge will send the PUC a final report with a recommendation based on the evidentiary hearing.
The head of Minnesota's Commerce Department was appointed by Gov. Dayton, but the Public Utilities Commission is independent of the governor's administration.