In the aftermath of a Minnesota judge’s routing recommendation earlier this week for Enbridge’s Line 3 pipeline, analysts on both sides of the U.S.-Canada border are assessing the jeopardy that could lie ahead for the project, and for Canadian tar sands/oil sands producers.
“There’s a ton riding on this project—not only for Enbridge, but for the whole basin, in general, in Western Canada,” said Calgary-based analyst Patrick Kenny of National Bank. “It’s a very important project.”
But the shocker for the Alberta fossil industry is that “Line 3 was supposed to be simple,” CBC adds. The plan to replace (and double the size of) an old, spill-prone pipeline “was assumed to face far fewer hurdles. However, the oilpatch is witnessing how even a project considered straightforward still faces significant delays and a difficult regulatory process. And the real protests haven’t even begun.”
“I would have thought Line 3 would have had the easier time moving forward,” said Edward Jones senior equity analyst Jennifer Rowland. “And yet, a line like that even faces so much opposition. It speaks to the mindset and attitude toward pipelines.”
In her recommendation Monday to the state Public Utility Commission (PUC), Judge Ann O’Reilly “shot down Enbridge’s planned new route for the expanded line, which would follow a different path for roughly half of its 543-kilometre length that runs through Minnesota,” CBC reported earlier this week. “Instead, the judge is recommending ‘in-trench’ replacement of the line along its current route.”
If the PUC agrees with O’Reilly, the replacement route will likely add to Enbridge’s costs for the C$7.4-billion project, CBC now says. And the judge’s choice of a route through the territories of the Leech Lake Band of Ojibwe and the Fond du Lac Band of Lake Superior Chippewa “definitely creates a pretty big wrinkle here as far as what the regulatory agency might decide to do in June,” Rowland noted. “There is opposition to the pipeline in some of those tribal areas that the existing corridor already goes through. So I think for the sake of speed of permitting, they prefer a different route.”
CBC says both communities oppose the replacement/expansion project, “and both have existing agreements with Enbridge that expire around 2029.”
In her ruling, InsideClimate News adds, O’Reilly specified that any new pipeline would require the tribes’ permission.
“An approval of Route Alternative 07 does not, in any way, infringe on the sovereignty of the various Indian Tribes to disapprove permits or other approvals required for construction of the Project through land over which the Tribes maintain jurisdiction,” she wrote. “Just like the Commission cannot bind the federal government, the Commission does not have the authority to require the Indian Tribes to permit the replacement of Line 3 within the Reservations.”
Honor the Earth Executive Director Winona LaDuke reiterated the communities’ opposition to the project. “The times have changed, and 50 years of environmental contamination of our homeland is enough,” she said. “We have not yet been freed from this. But we feel there is some hope for our case and are very grateful to the judge, and pray that the PUC makes the same decision.”