Minnesota approves Enbridge Line 3 replacement

Minnesota regulators today issued a key approval for Enbridge's 760,000 b/d Line 3 crude pipeline replacement.

The Minnesota Public Utilities Commission (MPUC) approved the certificate of need in a unanimous voice vote.

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, Wisconsin.

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.

The Sierra Club decried the MPUC decision saying that the Line 3 project would allow "dirty tar sands" to threaten clean water, communities, and the climate. Opponents vowed to continue to fight the project.

Enbridge said it would wait to comment on the MPUC ruling because the panel is still weighing a route permit for the new line.

A state administrative law judge in Minnesota in April recommended that regulators approve the certificate of need for Line 3, but only if it uses the same corridor as the existing line.

Such a plan would require shutting the existing Line 3 for nine to 12 months, Enbridge has said.

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

The Line 3 replacement would cost $4bn (C$5.3bn) for the Canadian portion and $2.9bn (C$3.9bn) for the US portion. It is the largest project in Enbridge history.

It would provide much needed crude takeaway capacity for western Canadian crude, which has been trading at a deep discount amid high inventories and full pipelines.

The two other major projects to move more crude out of western Canada – TransCanada's 830,000 b/d Keystone XL and Kinder Morgan's 590,000 b/d Trans Mountain expansion – are stalled.

Kinder Morgan in May agreed to sell the Trans Mountain system, including the expansion project, to the government of Canada amid strong opposition in British Columbia. The company and the government are working to find another buyer for the project. Meanwhile, Keystone XL is waiting on a key permit decision in Nebraska and faces legal challenges.