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Enbridge Line 3 Faces Challenges

Friday, October 13, 2017

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Enbridge has declared that the replacement of the Line 3 pipeline is a must, as it is critical for the well-being of regional oil refineries, but a government agency's assessment disagrees, indicating that the changes to the pipeline, including it remaining open, are unnecessary.

On Wednesday (Oct. 11), Enbridge filed with Minnesota's Public Utilities Commission, calling the state’s assessment of the situation “flawed,” and that it "failed to account for the negative economic impact to Minnesota if Line 3 were to be shut down." 

Line 3 Pipeline Replacement

The project, a $6.5 billion job that would see the replacement of more than 1,000 miles of crude oil pipeline between Alberta and Wisconsin, is necessary, owner Enbridge has said, because of a failing tapecoat that may be speeding corrosion on the line. Concerns over the pipeline’s condition led the company to voluntarily limit the line to 390,000 barrels per day starting in 2010. A replacement would increase capacity to at least 760,000 barrels daily.

To move forward, the project needs two approvals from the state of Minnesota: a certificate of need and a route permit. The PUC is currently debating over issuing a certificate of need.

Enbridge Challenges

In the September PUC assessment, the department argued that neither the current iteration of Line 3, nor the proposed replacement and expansion, were necessary for the state’s demand for oil. According to Minnesota Public Radio News, state demand has not changed in the last decade. The agency went on to say that it surmised the additional benefit would go to Gulf Coast refineries.

In contrast, Enbridge called the assessment flawed, and has argued that Minnesota will benefit from the project, as it will make the pipeline network safer and more reliable. This endeavor would also have a positive impact on the regional oil market, according to the company.

The company also argued that the pipeline would help current oil rationing, which reflects the demand exceeding the pipeline capacity to transport oil.

While construction has already begun in Canada and Wisconsin, the section to run through Minnesota still requires the approval of the PUC. A decision is slated for April of 2018.

“This is an essential project for Minnesotans that will ensure environmental protection of our important natural resources, as well as ensure the safe transportation of crude oil to refineries in Minnesota and neighboring states,” Guy Jarvis, Enbridge executive vice president in charge of liquid pipelines, told CBS Minnesota.

The PUC’s original mid-September filing said that “Minnesota would be better off if Enbridge proposed to cease operations of the existing Line 3, without any new pipeline being built.”

Project Background

The current Line 3 was put into service in 1968, and is made up of 34-inch pipeline. The new line, as proposed, would be 36 inches in diameter. The replacement project, already underway in Canada, is the largest single project in the company’s history.

According to permit application documentation, Enbridge plans to construct the new pipeline of high-strength GX-70 steel, with a nominal wall thickness of 0.515 inches (with stretches made of thicker pipeline when necessary, such as segments installed via road bore or horizontal directional drilling).

“This system is essentially full today, and demand for pipeline capacity is expected to grow, even under the most conservative crude production forecast,” Jarvis said.

   

Tagged categories: Government; NA; North America; Oil and Gas; Pipeline; Program/Project Management

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