State regulators vote to move Enbridge pipeline project forward

State utility regulators on Monday declined to reconsider their approval of Enbridge's controversial new oil pipeline across northern Minnesota, setting the stage for a court appeal by pipeline opponents.

The Minnesota Public Utilities Commission (PUC) also on Monday unanimously agreed that Enbridge had met several conditions it imposed when it unanimously approved the $2.6 billion pipeline in June. The move came despite concerns over the project's insurance coverage by the Minnesota Department of Commerce and pipeline opponents.

The conditions included insurance and a guarantee by Calgary, Alberta-based Enbridge Inc. to cover damage from any oil spills from the new pipeline, a replacement for the aging and corroding Line 3.

Environmental groups, some American Indian tribes and the Minnesota Department of Commerce had asked for the PUC to reconsider its June decision. About 150 people — both supporters and opponents of the project — filled the meeting chambers Monday, and many more were in an adjacent overflow room.

The PUC approved new Line 3 in June "after a highly detailed review, what is possibly the most extensively vetted review I have seen in my five years on the commission," said PUC member Dan Lipschultz.

The PUC's vote to reaffirm its decision was expected. Pipeline opponents are now expected by year's end to ask the state Court of Appeals to overturn the PUC's decision.

Bill Grant, deputy commissioner of energy for the commerce department, said it's not clear yet whether the department also will appeal. The commerce department is commissioned with representing the public interest in matters before the PUC.

While the PUC's approval is the primary regulatory blessing for the new Line 3, Enbridge must still get several state and federal environmental permits for the pipeline that will carry oil from Canada to Superior, Wis. The company expects to begin construction in the first quarter of 2019.

The pipeline would run along current Line 3's route to Clearbrook, Minn., but then jut south to Park Rapids before it heads east to Superior. Enbridge's current Line 3 runs at only 51 percent capacity because of safety concerns; the new pipeline would restore the full flow.

Pipeline opponents said the new route opens a new region of pristine waters to environmental degradation from oil spills and that the fossil fuel pipeline will contribute to climate change.

The permit conditions that were approved by the PUC Monday call for Enbridge to create a "decommissioning trust fund" to help pay the costs of removing the new Line 3 decades from now. Also, as a condition, Enbridge gave its full corporate guarantee to pay for environmental damages arising from the construction and operation of the pipeline.

The company has a $940 million corporate general liability policy, which it said satisfies the state's insurance requirements for Line 3.

The PUC also had asked that Enbridge look for additional "environmental impairment liability" insurance to the tune of a few hundred million dollars. Company representatives told the PUC they would attempt to get such insurance but cautioned it might be prohibitively expensive.

The Commerce Department continued Monday to question whether Line 3 would be adequately insured. Friends of the Headwaters and Honor the Earth, two groups that oppose the pipeline, both said Enbridge's insurance isn't adequate to cover a catastrophic oil spill in Minnesota.

Enbridge said it has the financial capability to deal with a worst-case scenario.

Monday's PUC meeting was a continuation of a September meeting that was postponed midway through after protests erupted against the pipeline. The earlier meeting, like almost all PUC meetings, was held at the commission's rented offices in downtown St. Paul.

Monday's meeting was moved to the Minnesota Senate Building, which can accommodate more spectators and has more security at its disposal. Eight state troopers stood watching in the Senate hearing room, while at least eight more were outside the room nearby.

Immediately after the PUC voted 5-0 Monday not to reconsider its June approval, four protesters stood up and individually denounced the project. One shouted, "Line 3 is an immediate climate change disaster" and noted a recent United Nations-sponsored report declaring that global warming is accelerating. They then left the room.

Enbridge, in a press statement, said it was "pleased with the civil discussion and orderly meeting as the [PUC] stood by their decision. … For four years we have been working through an extensive state regulatory process."

Mike Hughlett • 612-673-7003