Enbridge delays proposed Sandpiper completion
By John Myers / Duluth News Tribune Enbridge Energy Inc. on Tuesday said its proposed Sandpiper oil pipeline between western North Dakota and Superior, Wis., won't be completed until 2017, about a year behind the company's original estimate. Enbr...
By John Myers / Duluth News Tribune
Enbridge Energy Inc. on Tuesday said its proposed Sandpiper oil pipeline between western North Dakota and Superior, Wis., won’t be completed until 2017, about a year behind the company’s original estimate.
Enbridge announced the delay in a filing with the federal Securities and Exchange Commission, noting that it is a material change in the company’s plans that stockholders need to know about. The company had hoped to start construction in 2015 and have oil moving by early 2016. But those delays in the regulatory process – namely over how many possible pipeline routes should be studied – have led the company to revamp its official expectations.
Al Monaco, Enbridge’s president and CEO, said in Toronto that the delay was caused by the Minnesota regulator’s decision to split a review of the public need for the line and its routing into two separate hearings.
The Minnesota Public Utilities Commission is taking longer than expected to approve possible routes for the pipeline that need to be thoroughly studied for environmental and social impacts. The company hoped to limit those possible routes to two options.
On Sept. 11, the PUC opened up the possibility that other routes might have to be included for study.
Several groups have organized to propose additional routes, or oppose the line altogether, saying Minnesota shouldn’t have to bear the risk for oil that will mostly go to other states. They cite the possibility of pipeline spills into northern Minnesota lakes, rivers, and wetlands, and some groups have proposed new routes that would take the line south, through more farmland and urban areas.
The $2.6 billion, 616-mile Sandpiper line is needed, supporters say, to alleviate the bottleneck of crude oil that North Dakota is pumping for the rest of America but for which there aren't enough pipelines or railcars to ship it to refineries. Sandpiper, if built, would move 15.8 million gallons of oil a day across northern Minnesota, about 20 percent of all of the crude out of the Bakken oilfield region.
The oil would move from Superior down other lines to Chicago and other eastern cities.
Sandpiper would be among the state's most expensive private construction projects – more than double the cost of the new Vikings football stadium in Minneapolis, for example. That’s on top of hundreds of millions of dollars spent by Enbridge to expand its Alberta Clipper line from Canada to Superior, increase storage capacity in Superior and increase pipeline capacity from Superior to refineries in states to the south and east.
Enbridge had expected public hearings to be held on both the need for the pipeline and the route, simultaneously, over the winter with a final Minnesota Public Utilities Commission decision coming in May 2015. Construction would have started after PUC approval.
Now, it appears the pipeline’s route and its perceived public need will be reviewed under a more complex process that separates the public need hearings from route considerations. The need hearings will be held on the original schedule, with hearings in January and an administrative law judge decision in April, Lorraine Little, an Enbridge spokeswoman, said Tuesday.
It’s still unclear how and when the route aspects will advance through the PUC process.
Enbridge Energy is based in Houston and is a subsidiary of Calgary-based Enbridge Inc.