Construction on Enbridge's Line 3 oil pipeline across northern Minnesota may be near the halfway point, but the question of whether the pipeline is actually needed continues to play out in court.
A three-judge panel with the Minnesota Court of Appeals heard oral arguments on Tuesday, March 23. The court challenge questions the Minnesota Public Utilities Commission’s (PUC) approval of the environmental impact statement (EIS), certificate of need and routing permit for Line 3.
In a consolidated case, Indigenous and environmental groups contend that Enbridge did not provide a long-range forecast of energy demand, as requested by the court when it ordered a second EIS, among other issues. The plaintiffs are the Red Lake Band of Chippewa Indians, White Earth Band of Ojibwe, Mille Lacs Band of Ojibwe, Honor the Earth, Friends of the Headwaters, The Sierra Club, Youth Climate Intervenors and the Minnesota Department of Commerce (DOC).
The plaintiffs are also appealing the U.S. Army Corps of Engineers’ and the Minnesota Pollution Control Agency’s approvals of key Line 3 water permits in two other lawsuits at the federal and state levels.
RELATED: Listen to the oral arguments here
Supply vs. demand
Katherine Hinderlie, attorney for the DOC, said Enbridge relied on the pipeline’s capacity to transport crude oil and not the actual demand for crude oil. By doing so, "Enbridge shifts the focus of the analysis from the refiners who will consume the crude oil and produce refined products for us all to use. They shift that analysis to the desire of crude oil producers to sell and ship as much oil as they can," Hinderlie said.
Scott Strand, representing Friends of the Headwaters, added that while two Minnesota refineries offered letters of support for the Line 3 replacement, evidence for consumer demand was “conspicuously absent.”
“Supply forecast and shippers’ support are not a proxy for demand,” Strand said. “Apportionment tells us there’s competition for pipeline transport capacity.”
PUC attorney Jason Marisam defended the PUC's approval of Line 3's certificate of need, arguing the PUC and DOC have differing definitions of “demand forecast.”
But both Judge Lucinda E. Jesson and Judge Peter M. Reyes Jr. challenged Marisam on why it seemed to rely on available supply rather than on a forecast of demand from refineries through 2035.
Marisam said they used “a conservative assumption of constant demand” based on historical data.
Judge Michael Kirk inquired why the PUC changed its approach to “demand” from the definition used in Enbridge’s Alberta Clipper case in 2008.
Marisam said the information was sufficient and the PUC applied its own rule.
Jesson noted a 2018 administrative law judge report found that “because of global policy changes to reduce dependence on fossil fuels, this will likely reduce the global demand for oil and refined products, but no party has put a number or timeframe to that general statement, nor has any party shown how much the supply of Canadian crude is expected to be impacted by those changes.”
She continued, “I just did not see any forecast of that demand from willing and able purchasers, the same way I saw 'Oh, here's the supply we have' or 'Here's the pipeline capacity we have.'" Jesson said the "big issue" in this case is whether supply can be a proxy for demand over the next 15 years.
Reyes said he shared Jesson's concern.
"It seems to take the approach of 'If we build it, they will come,' but that's not what's required," Reyes said.
Jurisdiction about safety
Paul Blackburn is attorney for the Red Lake and White Earth bands, Honor the Earth and the Sierra Club. He argued that the PUC’s judgement that the existing Line 3 is dangerous was outside of their jurisdiction and expertise.
He pointed out that the Pipeline and Hazardous Materials Safety Administration, the federal agency with jurisdiction, has not determined that the old Line 3 is unsafe. “The record shows that this pipeline has not had a major pipeline spill since 2002 – 18 years ago. Since then, all the spills have been very minor and small,” Blackburn said.
Impact on Lake Superior
While the oral arguments largely focused on the demand question, the court is also considering whether a 2019 addition to the project's EIS from the DOC erred in saying a spill would likely not affect Lake Superior.
Mille Lacs Band of Ojibwe attorney David Zoll said the analysis considered a pipeline break 30 miles upstream rather than at a water crossing nearest the lake, namely the Pokegama and Little Pokegama rivers in Wisconsin, where a break was more likely.
But Brusven, of Enbridge, said any oil spilled at the Pokegama crossings would be unlikely to reach Lake Superior as well.
Judge Reyes noted a spill in Little Otter Creek – the site chosen for the impact study – would have to flow 60 miles per hour to reach the lake. That study was a foregone conclusion, he said, and didn’t actually look at the pipeline’s impact on Lake Superior.
Marisam argued that they picked the best site in the watershed and the PUC took a hard look at it.
Once complete, the pipeline will replace the existing, aging Line 3 and ferry 760,000 barrels of oil (31.92 million gallons) per day from Alberta, Canada to Enbridge's terminal in Superior, Wis. following a partially new 334-mile route through much of northern Minnesota.
Construction on Line 3 began Dec. 1 after the project received its final permits. Attempts by opponents to stop construction while legal challenges remained in court were rejected by two courts, including the Minnesota Court of Appeals.
Earlier this month, Enbridge said it was nearing 50 percent completion of construction and anticipated pausing pipeline construction April 1, during the spring thaw, to focus on building the pipeline's pump stations during that time. It will return to pipeline work June 1.
The Court of Appeals has 90 days to issue an opinion, meaning a decision could be made June 21 at the latest. Enbridge anticipates it can begin moving oil on the new Line 3 this year.
Additional reporting by Jimmy Lovrien of the Duluth News Tribune.