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Administrative judge backs Sandpiper pipeline

Sections of pipeline are stacked up ready for installation at this storage yard outside Lake George.



A Minnesota official who took five days of testimony and received 2,000 letters about the proposed Sandpiper oil pipeline recommends its construction.

Administrative Law Judge Eric Lipman on Monday also recommended that the Minnesota Public Utilities Commission place some conditions on its approval and said the case is complex and “this one is a lot harder than it ought to be.”

The PUC now again will consider Sandpiper, which would transport North Dakota oil through new Canada-based company Enbridge facilities from south of Tioga, N.D., to Clearbrook, Minn., and eventually to Superior, Wis.

State law requires new pipeline construction such as the Sandpiper to receive a certificate of need from the PUC.

Lipman recommends the certificate be granted if, among other conditions, road access to pipeline valve locations is provided, costs for public safety agencies response to pipeline emergencies are covered and financial construction arrangements are approved.

The new pipeline would run 616 miles, about 300 miles in Minnesota, with a construction cost of $2.6 billion.

Pipeline supporters were happy with the recommendation by Lipman, a former Republican state representative serving an eastern Twin Cities suburban district. Environmentalists opposed to the oil that the pipeline would carry, and against its location in what they consider an ecologically fragile area, are expected to continue fighting Sandpiper, including in court.

“This is a positive step for a project that will create thousands of jobs and reduce the price of energy for Minnesota families,” said Chairman Pat Garofalo, R-Farmington, of the Minnesota House Job Growth and Energy Affordability Committee. “But most importantly, this will reduce oil by rail traffic, meaning increased safety in communities across the state.”

Enbridge spokeswoman Lorraine Little called Lipman’s decision “significant.”

“Enbridge’s proposed Sandpiper route provides the best balance for the state of Minnesota,” Little said. “It is the shortest and most energy-efficient; impacts fewer landowners, cities and towns, and fewer natural resources overall; and connects at Clearbrook and Superior as required by our transportation service agreements. ...”

Early in Lipman’s recommendation, he laid out that the Enbridge project, by subsidiary North Dakota Pipeline Co., “is highly controversial. The parties diverge on a central point: whether the benefits of improving access to North Dakota crude oil are worth assuming the risk that there might later be a large-scale oil spill from the pipeline.”

Lipman wrote that nothing on the Sandpiper case’s record shows that it would fail to meet state requirements and no better alternative has been presented. Some have called for a more southerly route to avoid northern Minnesota lake country, a proposal Enbridge said would kill the plan.

The administrative judge also said that the need for transporting North Dakota oil is expected to remain strong enough to need the pipeline. There are no other existing or planned pipelines to handle the need, Lipman wrote.

In western Minnesota, Sandpiper would follow existing pipeline right of way. From Clearbrook to the east, it would be on pipeline right of way 75 percent of the time.

Enbridge has easement agreements from 95 percent of property owners along the route.

The company originally planned to begin Sandpiper construction this June and put it in service in the spring of 2016. With regulatory delays, Enbridge now estimates it could be transporting oil in 2017.

Lipman said that Sandpiper would be one of Minnesota’s largest-ever construction projects.

If oil destined to go through Sandpiper were shipped by rail. Lipman said, it would take 1,710 tank cars a day. The cost of rail shipment is considerably higher than by pipeline.

Besides the pipeline, Enbridge proposes to build other facilities at Clearbrook and Pine River, Minn.

The north Dakota Public Service Commission already has approved the portion of the pipeline in that state.

Besides making Sandpiper recommendations, Lipman suggested the Public Utilities Commission improve its pipeline approval process. If that is not done, he added, future energy distribution cases will continue to bog down in controversy.

He wrote that there was a “disconnect” between parts of the certificate of need regulation, which some read as saying that if a pipeline is designed well “and will be installed carefully” the pipeline must be approved.

Many argued against the pipeline because it would transport fossil fuel but, Lipman said, a pipeline hearing is not the place to resolve that issue.

“And yet, because so many members of the public came forward to urge the commission to do precisely that, and in such numbers that staff reserved venues that are normally set aside for rock concerts and sales conventions so as to hear from them, it begs the question of whether the commission should consider describing the scope of its review more precisely than it has in the past,” Lipman said.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.