Key vote on oil pipeline expected

Published 9:11 am Thursday, June 4, 2015

By Elizabeth Dunbar and Dan Kraker

Every day, pipelines from Canada and North Dakota quietly move 2.7 million barrels of crude oil across northern Minnesota — enough to cover a football field 263 feet deep.

That total could rise to nearly 4 million barrels a day if state regulators decide this week to allow a new oil pipeline to be built across a 300-mile stretch of the state.

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The Minnesota Public Utilities Commission hears testimony today on whether the Sandpiper pipeline proposed by Enbridge Energy is needed to transport North Dakota crude to refineries in the Midwest. A vote is expected on Friday.

The new line would help relieve the bottleneck of oil coming out of the Bakken region. But critics say it unnecessarily risks fouling some of the state’s most pristine watersheds.

“We’ve got lakes and streams (and) shallow aquifers that are vulnerable to contamination,” said Kathryn Hoffman, an attorney for Friends of the Headwaters, which opposes the project.

Enbridge wants to build Sandpiper to carry 225,000 barrels a day from the Bakken oil fields in North Dakota. Although oil production is currently down from earlier levels and prices are low, the downturn likely won’t last. Production is expected to pick up at some point in western North Dakota and the tar sands region of Alberta, Canada.

To prepare for the flow increase, companies have been scrambling to build the pipelines to move that oil to markets. Enbridge also has proposed expanding two pipelines that transport oil from Canada through Minnesota.

The scale of oil operations is clear at the Enbridge pipeline terminal in Superior, Wis., where the company built a giant tank to handle the new oil from the Sandpiper line and other projects. Five stories high, it can hold 500,000 barrels of oil.

“This is a natural spot for us with our existing pipeline system to bring the oil in, and then be able to disperse it through our outgoing pipelines to the rest of the U.S.,” said Rob Kratch, manager for facilities, design and construction at Enbridge Energy.

The Sandpiper would follow the company’s existing pipeline corridor to its hub in Clearbrook, Minn., west of Bemidji. It would then cut south towards Park Rapids before blazing a largely new path to its terminal in Superior.

Members of Friends of the Headwaters contend that the risk of a spill in those areas is too significant. For example, the pipeline would cross land that the state Department of Natural Resources considers highly susceptible to groundwater contamination. It also would pass near some of the richest wild rice waters in the state.

They also say the pipeline shouldn’t be built to end in Wisconsin simply because that makes the most sense for Enbridge, particularly if it poses a threat to waterways.

“These are the headwaters of the Mississippi,” Hoffman said. “These are areas we value and the citizens of Minnesota value.”

The group suggested several alternative routes, one of which was endorsed by experts from the Minnesota Pollution Control Agency and the Department of Natural Resources.

But Enbridge argued the other routes were unworkable because they would not connect to its terminals in Clearbrook and Superior.

“Moving the route because of wild rice, or something else to another part of the state, simply elevates the value of one resource over another,” said Paul Eberth, Enbridge’s project director for the Sandpiper pipeline.

If the public utilities commissioners disagree with Enbridge’s route, they can still modify it — but not in the way Friends of the Headwaters has suggested. To do that, the commission would have to reject the whole project and Enbridge would have to start over.

That’s what Friends of the Headwaters contends must happen. The group also is asking the state Court of Appeals to require a more thorough environmental impact statement, which would delay the project significantly.

That worries other business groups in the state.

Bob Zelenka, executive director of the Minnesota Grain and Feed Association, said his members have had to compete with oil trains to ship grain out of state.

“From our view, the addition of this pipeline or pipelines to move oil out of the Bakken … really helps to reduce that congestion,” he said.

The administrative law judge presiding over the case has said Minnesota rules are not set up to consider big-picture environmental concerns. He’s recommended the Public Utilities Commission grant the pipeline’s certificate of need.

While the commission’s decision this week will only focus on Sandpiper, it has broader major implications for the future of oil transport in the state. If the commission approves the project, Enbridge plans to move forward with plans to relocate Line 3, an older pipeline along the same corridor. That pipeline would carry tar sands oil from Canada.

Tar sands oil extraction has been the focus of stiff criticism from environmentalists across the country, as the process requires more energy that the methods used to refine other sources of oil. It also releases more greenhouse gas emissions.

Protesters from across the Midwest are planning to gather in St. Paul on Saturday to protest tar sands oil and the proposed pipelines that would carry more of it into the United States, including the Keystone XL line that would send oil from Canada to refineries on the Gulf Coast.

Discussions of Sandpiper should look beyond how best to move a bunch of oil from point A to point B, said Andy Pearson, an organizer for the MN350 environmental organization. He said the focus also should be on climate change.

“Even if all these pipelines work as intended, it is still a tragedy for the environment because the oil that’s being carried on them is some of the dirtiest in the world,” Pearson said. “What we need to be investing in is keeping this oil in the ground instead of taking it out and burning it.”