Enbridge receives federal approval for Line 3 crude pipeline to possibly start construction in December: company

Houston — Enbridge received federal approval for its massive Line 3 crude oil pipeline replacement project, but final authorization is still required from Minnesota before construction can commence as soon as December, the company said Nov. 24.

The pipeline is one of the key pending projects that would serve as a larger artery to move more heavy crude oil from Canada to the Midwestern US and, ultimately, to the major refining corridor along the US Gulf Coast.

Most of the construction is in Minnesota, where a stormwater construction permit is still needed as well as final authorization from the Minnesota Public Utilities Commission, Enbridge spokeswoman Juli Kellner said Nov. 24.

The project could be completed as early as the third quarter of 2021 if construction is able to begin by the end of this year.

Enbridge said it now has all of the necessary federal permitting from the US Army Corps of Engineers. The Line 3 project received a slew of other Minnesota permits earlier in November from the Minnesota Department of Natural Resources, but still awaits final construction approval from the state utilities commission.

"These permits reflect yet another science-based approval for the project, which now moves closer to the start of construction, hopefully before the end of the year," Enbridge Vice President Leo Golden said in a statement. "Final state permits and authorizations are still needed before work can begin."

The $6.75 billion Line 3 replacement project would increase crude pipeline capacity from 370,000 b/d now up to 760,000 b/d as it moves Canadian crude from Alberta to Superior, Wisconsin. The pipeline runs more than 1,000 miles, including its largest 337-mile segment in Minnesota.

Political winds

When Enbridge CEO Al Monaco was asked recently whether President-elect Joe Biden could slow or halt the Line 3 developments, Monaco said the process already was well underway and should be approved "relatively quickly."

Biden has publicly opposed the competing and more famous Keystone XL Pipeline project by TC Energy, but Biden has not weighed in on Line 3. However, Enbridge hopes to press ahead with US construction before he assumes office on January 20.

Some energy analysts have contended Keystone XL is unnecessary if both Line 3 and Canada's Trans Mountain pipeline expansion projects are completed as planned.

Enbridge completed the $3.75-billion Canadian portion of Line 3 last year, and the remaining construction is expected to last up to nine months once it begins. Keystone construction also is finished on the Canadian side of the border.

Despite the ongoing coronavirus pandemic, Monaco has contended there is plenty of crude oil pipeline demand that will return as soon as the pipeline is in service.

He noted that the oil sands region of Alberta was facing significant pipeline shortages before the pandemic took hold. Indeed, Canada's crude-by-rail exports fell from an all-time high of 411,991 b/d in February to an eight-year low of 38,867 b/d in July. Exports have since rebounded slightly to more than 50,000 b/d, according to the Canada Energy Regulator.

As for the new federal permits for the Line 3 pipeline, the Corps of Engineers approved a series of authorizations through the US Clean Water Act and the Rivers and Harbors Act, including lengthy reviews of impacts on the environment, water supplies and Native American lands.