After about a half-hour of discussion over videoconference, the PUC voted 4-1 to deny requests filed by the Minnesota Department of Commerce, environmental groups and Minnesota tribes last month urging the PUC to revisit its February decision that OK’d the certificate of need and route permit for the proposed 340-mile pipeline across northern Minnesota, which will carry 760,000 barrels of oil (31.92 million gallons) per day from Alberta, Canada, to the Enbridge terminal in Superior.
Commissioner Matthew Schuerger, the lone dissenting vote when the PUC approved the certificate of need and route permit in February, was also the only commissioner to vote against denying the requests Thursday. He urged a contested-case hearing and cited the requests for reconsideration that argued Enbridge used an incorrect demand forecast to demonstrate the pipeline’s need, the pandemic-induced drop in demand for oil, increasingly electric modes of transportation, climate change and Enbridge’s change to the way it manages contracts on its pipelines.
“In my view, it’s clear that new issues have been raised and there are contested material facts and all significant issues have not been resolved. … I support reopening this case,” Schuerger said.
But the other four commissioners disagreed.
Commissioner Valerie Means said the requests should be denied and said the drop in demand of oil due to the pandemic should impact the PUC’s decision.
“The record supports the conclusion that all markets are volatile and cyclical. The (PUC’s) order recognizes this evidence and states the condition relies on long-range forecasts in a certificate-of-need analysis, because evidence of short-term fluctuations in oil markets are not particularly useful in determining the need for a petroleum pipeline,” Means said.
Commissioner John Tuma said the requests “cherry picks” the impacts of COVID-19 and said the demand for oil was expected to bounce back by the time the pipeline is built.
“There is not material evidence demonstrating that the COVID, or any other matters discussed (in the requests), will disrupt the well-documented evidence of the long-range petroleum infrastructure planning and forecasting that brought us to the need for the replacement of Line 3,” Tuma said. “The fact that Enbridge is willing to invest in replacing their deteriorating infrastructure in this declining market should actually be appreciated.”
In an emailed statement, Enbridge said the PUC’s decision was consistent with the law and upheld by more than five years of the project moving through the regulatory review.
“The MPUC’s decision to deny the petitions for reconsideration is another important step forward for the Line 3 Replacement Project. … The petitions for reconsideration, including the Minnesota Department of Commerce’s filing, presented no new evidence or arguments,” Enbridge spokesperson Juli Kellner said.
Winona LaDuke, co-founder and executive director of Honor the Earth, one of the groups that filed requests for reconsideration and is opposed to the project, expressed frustration with the PUC’s vote.
“The PUC is an embarrassment to Minnesota’s regulatory system. The tar sands oil energy sector is tanking during the pandemic and may never recover,” LaDuke said in a statement. “Climate change — and the electrification of the transportation sector — are both increasing dramatically.”
Honor the Earth said it would likely appeal Thursday’s decision to the Minnesota Court of Appeals.
The request for reconsideration filed by the Minnesota Department of Commerce argued the PUC improperly approved the pipeline’s certificate of need by failing to consider a long-range demand forecast, because Enbridge instead submitted a pipeline utilization forecast that assumed demand would continue at 2016 refinery capacity. It’s a position the department has long argued with support from Gov. Tim Walz and former Gov. Mark Dayton.
In a separate joint request, a coalition of environmental groups and Minnesota tribes — The Red Lake Band of Chippewa, White Earth Band of Ojibwe, Honor the Earth, Youth Climate Intervenors and the Sierra Club — urged the PUC to reconsider in light of the COVID-19 pandemic and lower oil demand. Friends of the Headwaters also filed a request.
Parties wishing to appeal the PUC’s decision may now petition the Minnesota Court of Appeals and ask it to review the case.