Appeals Court Evaluates Minnesota Pipeline’s Permit — Again

It’s the controversial Line 3 pipeline’s second round at the Minnesota Court of Appeals in a dispute over a state certificate of need.

In this June 29, 2018, file photo, Pipeline used to carry crude oil is shown at the Superior terminal of Enbridge Energy in Superior, Wis. in 2018. (AP file photo/Jim Mone)

ST. PAUL, Minn. (CN) — Two Minnesota state regulators clashed Tuesday morning before the Minnesota Court of Appeals in yet another battle over the Enbridge Line 3 oil pipeline currently under construction across the northern part of the state. 

Fossil-fuel transporter Enbridge Energy was at the Court of Appeals for a second round on the certificate of need granted to it by the Minnesota Public Utilities Commission in 2018. Attorneys for the commission argued that it had adequately considered the potential impacts of a pipeline breach on Lake Superior after the appellate court directed it to go back and do so in 2019. 

The Minnesota Department of Commerce led the opposition to the permit, arguing that Enbridge had not adequately shown that oil demand requires the replacement of the existing Line 3 pipeline, built in the 1960s. That 34-inch pipeline is working at half capacity after a lengthy history of spills, including the largest inland oil spill in U.S. history in 1991. Its proposed replacement would be larger at 36 inches and return the pipeline to its original capacity of 760,000 barrels of crude oils per day. 

Assistant Attorneys General argued on both sides of the case: Katherine Hinderlie for the Department of Commerce and Jason Marisam for the Public Utilities Commission (PUC). Also arguing against the commission were Native American bands whose land the proposed pipeline would traverse and a handful of environmental organizations. 

Hinderlie argued that Enbridge’s calculations for demand abstracted the issue too far from the consumer demand for crude oil. The forecast, she said, was based on the amount of crude that oil producers hoped to move into Minnesota and surrounding states rather than the amount consumers would actually use. “By looking instead at the demand to transport crude oil rather than the demand for the crude oil itself, Enbridge shifts the analysis … to the desire of crude oil producers to produce and ship as much crude oil as they can,” she said. 

With climate change putting pressure on humanity to develop and make use of alternative fuels, Hinderlie and her allies argued that in the long term, demand was unlikely to keep pace with oil producers’ desire to supply. 

Marisam argued that the Commerce Department was fudging what it meant to show demand. “Even if that definition is ambiguous, the commission’s reasonable application of its own rule is entitled to deference and should be accepted,” he said, referring to the PUC’s past acceptance of supply-based demand forecasts. Questioned by presiding Judge Lucinda Jesson as to whether Enbridge’s permit application included any consumer-based demand forecasts, he said it didn’t need them. 

“It doesn’t have a separate projection of consumer demand. That isn’t there, but that is not what the rule requires,” he said. 

Representing Enbridge, attorney Christy Brusven said that even if it was required, demand for Enbridge’s pipeline was all but guaranteed. Even if the region’s vehicles were 75% electric by 2035, she said, the pipeline would still have a use. “Line 3 is going to be used and useful throughout the forecast period,” she said. 

Judge Peter Reyes Jr. raised concerns about the amount of time that has passed since data was first compiled for the first certificate of need, wondering whether the numbers Enbridge provided in 2016 were still good five years later. 

“Why didn’t the commission err by not updating its certificate of need, and instead relying on what looks like very stale data now,” he asked.

Brusven said that was out of the scope of the review the court requested on the first round. “This is an administrative action. There’s always some lag between the record development and the final decision,” she said. “If every new piece of evidence or every new inference required us to start over we’d never get through this analysis.” 

In addition to the demand-calculation question, the court delved into whether Enbridge had adequately complied with an earlier order requiring the energy company to more closely examine the impact of a potential spill on Lake Superior and its watershed. The PUC re-approved the company’s permits after it provided modeling data from Little Otter Creek, a small tributary near the city of Cloquet, 20 miles west of Duluth. 

“This court directed the commission to evaluate the impacts of a spill on Lake Superior and its watershed,” attorney David Zoll, representing the Mille Lacs Band of Ojibwe, said. “The commission took that directive, and decided that it could fulfill it by evaluating any point in the watershed.”

The evaluation of a potential spill at Little Otter Creek, Zoll argued, was inadequate to demonstrate the impacts of a worst-case-scenario spill from the pipeline. 

Jesson prodded at that argument. “It wasn’t like they chose a place that was impossible for the oil to reach the lake,” she said. 

“They needed to choose a location that was most likely for the oil to reach the lake,” Zoll replied. 

Enbridge spokeswoman Juli Kellner said in a statement that the permitting process had been fair and transparent and that the Line 3 replacement would be an environmental improvement on its predecessor.

“The replacement of Line 3 is an essential maintenance and safety project that enhances environmental protections,” she said. “It also is creating significant economic benefits for Minnesota counties, small businesses, Native American communities, and union members including 5,200 construction jobs, millions of dollars in local spending and tax revenues at a time when the state needs it most.”

Construction of Line 3 in North Dakota and Wisconsin is already complete, and construction began in Minnesota in December after receiving critical permits in November. Activists have kept up a steady opposition to the pipeline over the past several months, camping out in the path of the pipeline and working to delay it as much as possible.

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