Editor's note: On Dec. 5, Paul Eberth, project director for Enbridge Energy, stopped by the Herald to talk with the editorial board about the company's LIne 3 Pipeline replacement project. The following is a transcript of the conversation, edited for clarity and length.
Q: The Canadian government recently approved Line 3. So, where are you at with it in the United States? It crosses North Dakota slightly, correct?
Eberth: Let me just describe the makeup of Line 3. About 28 miles of the pipeline currently are in North Dakota. There are about 285 miles of it in Minnesota, and then about 13 or 14 miles in Wisconsin.
The permitting routine is different in all of the different states. In Wisconsin, we've secured all of our state permits. In North Dakota, there isn't a Public Service Commission permit needed for the replacement; in fact, we've already replaced 16 miles of the 28 miles in North Dakota.
And then in Minnesota, that's where the lion's share of the replacement work will take place. That's going through the Minnesota Public Utilities Commission process. We'll need a new Certificate of Need and a Route Permit from them.
Q. So you're waiting for those documents from the PUC?
Q. What's the basic reason for the rebuild?
Line 3 has more anomalies or defects than is expected for a pipeline of its age. This means that the maintenance program for Line 3 is forecast to be intense, if it's not replaced.
Q. How old is it? And would the replacement be a complete take-out of the old and a put-in of the new?
Line 3 was built in the 1960s. The project would be a complete decommissioning of the old pipeline, and our plan would be leave the old pipeline in place and in most places, put the new one next to it.
Q. What's the capacity of the line?
The current Line 3 is 34 inches in diameter. The new Line 3 would be 36 inches in diameter. Currently, because of its condition, Line 3 is operating at reduced capacity-about 390,000 barrels a day. The new line's capacity would be about 760,000 barrels a day.
Q. If lines 1 and 2 are older but still operational, why is Enbridge replacing Line 3?
Because lines 1 and 2 are in much better condition than Line 3, primarily due to the type of protective coating that was put on the steel.
The coating on Line 3 is called a tapecoat-a tape that was wrapped around the steel. And it has disbonded over time, which has increased the rate of corrosion of the steel in various places.
This has caused a faster deterioration of the steel than on the other lines.
Q. When are you hoping that the Line 3 placement is in service?
We're forecasting to have it built and in service in 2019.
Q. With the Sandpiper Pipeline, you ran into a lot of regulatory hurdles with the PUC. Do you expect the same kind of response?
I don't expect the same kind of issues. The Sandpiper was unique, such that the PUC deviated from their normal process and in the end, the court found that deviation to be unlawful. The commission approved the Certificate of Need for Sandpiper unanimously, but then the approval was overturned in court about six months later.
We think the commission has learned from the court's action on Sandpiper, and we're starting the Line 3 process by getting the Environmental Impact Statement done.
Q. The EIS is going on right now?
Yes. The commission just approved the scope of the EIS, and noticed in the Environmental Quality Board's monitor that the EIS preparation would begin.
Q. Given the controversy over the Dakota Access Pipeline, do you have any concerns about how protests might affect the Line 3 project? Will there be pressure from environmental groups, pressure on regulatory bodies?
In general, that kind of pressure results in a better project for everybody. Folks have a right to free speech and to protest.
But this is a very different project. It's a project that'll improve the safety of oil transportation in Minnesota, because it's a replacement of existing infrastructure.
Q. On the map, the route takes a jog downward from the existing Line 3.
Currently, Line 3 come in in the very northwest corner of the state. It continues down to Clearbrook, Minn., just northwest of Bemidji. Then from there, the current routing for Line 3 generally follows U.S. Highway 2 toward Duluth-Superior.
We plan to route the new Line 3 next to the old Line 3 down to about Clearbrook. Then, our proposed route would be to turn south and follow the Minnesota Pipelines. There are four pipelines not owned by Enbridge that come south out of Clearbrook to the Twin Cities. So our proposed route would be to follow those down to about Park Rapids, then turn east along Minnesota Power's DC electric transmission line, and follow that for a good portion of the length toward Duluth-Superior.
Q. Have easements been obtained along this route?
We have obtained easements for about 95 percent of the private land tracts.
Q. What's the reason for the route change?
Between Clearbrook and Superior, there are a few things happening. There has been quite a bit more development since 1949, which adds to the congestion. Not only do we have six pipelines owned by Enbridge, but a bunch of transmission lines, U.S. 2, the CapX 2020 powerlines built there from Cass Lake eastward.
So we have quite a bit of utility congestion, we have the relatively new Bemidji High School, which shares some property with the pipeline right-of-way.
We also have the Chippewa National Forest and the Leech Lake and Fond du Lac Indian reservations; the existing route goes right through all of those. In both reservations, we've talked to leadership, and they've expressed a preference that we go around.
When you add those factors together, that's what caused us to look at a different route.
Q. What about the Mississippi Headwaters crossing?
Crossing the Mississippi River is not unique for oil pipelines. We have 12 crossings of the Mississippi River in northern Minnesota. Minnesota Pipe Line has four pipelines that cross the headwaters.
Our proposed location for crossing the Mississippi is in the exact same place as the Minnesota Pipe Line crosses. So we would be next to the other oil pipelines.
Q. What is the Minnesota Pipe Line?
The company is called Minnesota Pipe Line; it's owned by the Koch companies. Minnesota gets all of its crude oil supplied for its two refineries out of Clearbrook. We move the oil to Clearbrook, then Minnesota Pipe Line has four pipelines that come out of Clearbrook and head south into the Twin Cities. That's where Minnesota gets almost all of its crude oil supply.
Those pipelines cross the Mississippi not far from Lake Itasca.
Q. So, is the regulatory process in Canada essentially completed?
Yes. The National Energy Board just issued their decision.
Q. And permission from the U.S. State Department was not needed?
Right. Line 3 was built across the border in the 1960s, and continues to operate under its existing presidential permit. We've already replaced it at the border.
Q. Are you confident that the Line 3 replacement is going to be built?
Yes, we're confident that this project will move forward. For one thing, it'll improve the safety and efficiency of transportation in Minnesota.
We also made an agreement with the Environmental Protection Agency to replace Line 3, as part of our settlement for our incident near the Kalamazoo River in Michigan. The most recent proposed consent decree that the Department of Justice has posted requires Enbridge to replace Line 3. It's one of the safety requirements/safety improvements that are required.
We had planned the replacement before the settlement came out, but the settlement essentially makes sure that we follow through with this proposal.
Q. Is that because the material in the Michigan pipeline is similar to the Line 3 pipeline?
Yes. In particular, the both used the same coating material-the tape coating. They are similar vintage pipelines.
Q. Explain the difference between the Keystone XL Pipeline and this pipeline.
Both would serve the same production area. But Keystone was a new pipeline, and it was designed to serve primarily the Gulf Coast.
Our system is the primary supply for the Midwest. We do have connections further south and to the east, but our pipelines out of the Superior area continue down to the Chicago market and to Detroit.
Plus, LIne 3 is a replacement of existing infrastructure.
Q. What is the federal involvement?
The Army Corps will have to issue permits for crossing waters of the United States. The Corps will have a large permitting role in our project.
Q. The Fond du Lac and Leech Lake tribes, you mentioned that they asked for this pipeline to go around. So, are they now supportive of the project, because it's taking the new route?
I don't know. They haven't participated much, because they're not formal parties to the Line 3 case. That's because the construction doesn't go through the reservation.
Q. Has opposition surfaced?
Yes, there has been some.
Q. Considering what happened with the Dakota Access Pipeline, does that give you unease? Don't you worry that Line 3 could be the next place where the protesters say, "All right, we're done in North Dakota, let's head on over there"?
You're always worried about the risks that can threaten your project. Is that one of them? It certainly could be.
But in our case, if a stakeholder is significantly opposed to our project, our response will be to increase communication to see if we can reach a mutually agreeable solution.
We've been operating here for 65 years; we're not going anywhere. We really want to be able to work with our stakeholders, whether they're for the project or against it.
Q. I assume that if we had talked to the Dakota Access people a year or two ago, they would have said, "We've got all our ducks in a row, we've done the public outreach." But then the protests happened.
And Sandpiper ran into some issues as well.
One of the differences is that with Sandpiper, sure there was opposition. But that's not what caused us to defer Sandpiper.
There was a court decision to overturn the state's permit. That set back the permitting process by a couple of years.
And during the course of that setback, we are a business, and we are subject to changes in the marketplace and in industry. Oil prices dropped, production in North Dakota slowed. And competition with Dakota Access came up. So, the market really changed.
Those were the factors that caused us to defer the project.