Enbridge Line 3 clears hurdle in Minnesota

Enbridge's Line 3 crude pipeline replacement project cleared a major hurdle in Minnesota, but with an unexpected twist.

A state administrative law judge recommended that regulators approve a certificate of need for the 760,000 b/d Line 3 project, but only if it uses the same corridor as the existing line.

Enbridge had been seeking a different route for the US portion of Line 3 from Clearbrook, Minnesota, to Superior, Wisconsin, because the current corridor is near communities that have developed more since the line was built in 1968.

Enbridge said today that the judge's approval was an important step in the regulatory process.

"We will be taking time to review in more detail the recommendation that we use the existing right-of-way, and will have additional comments to follow," the company said in a statement.

Enbridge is seeking to replace the light crude line, which has been running at 390,000 b/d in recent years, so it can restore it to its original capacity. The line runs from Alberta, Canada, to the hub at Superior.

Minnesota regulators approved a final environmental review of the project in March. But in a separate process, the state's Public Utilities Commission is still considering whether the line is needed.

The agency's decision will partly depend on the ruling by administrative law judge Ann O'Reilly.

The project has seen opposition from environmental groups and Native American tribes as the proposed new route crosses an area that local tribes value for wild rice, hunting and fishing.

O'Reilly said in her ruling that "replacement of the line is a reasonable and prudent action" and that in-trench replacement "mitigates, to a large degree, the detrimental impacts that abandonment of an old line and creation of a new oil pipeline corridor would have on the state."

The ruling also said that the Line 3 project would likely result in benefits to refiners in Minnesota and in the larger region who would have access to more crude and different crude mixes.

The project would provide pipeline-constrained Canadian crude an additional 370,000 b/d of takeaway capacity from Alberta to the hub at Superior.

The other two major projects seeking to increase pipeline takeaway capacity out of western Canadian are stalled, including Kinder Morgan's 590,000 b/d Trans Mountain crude pipeline expansion and TransCanada's 830,000 b/d Keystone XL.