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Environmental review boosts permitting prospects for Enbridge Line 3 project

Enbridge Inc. touted the findings of a revised environmental impact statement from Minnesota's commerce department as concluding that the stalled Line 3 oil pipeline replacement project would not introduce risk to Lake Superior, because protections would keep oil out of the lake and other water bodies in the unlikely event of a pipeline leak.

The findings, released Dec. 9, could boost Enbridge's chances of getting the state regulatory approval it needs to replace the 1960s-vintage line between the oil sands region of Alberta and its pipeline hub in Superior, Wis., and boost transportation capacity to about 760,000 barrels per day. The original line has been running at roughly half capacity since the company voluntarily reduced pressure in the wake of a 2010 oil spill in Michigan.

The Line 3 project, announced in 2014, was expected to be in service late this year before regulatory delays set the project back until at least late 2020. The 1,097-mile replacement project, which has a budget of about C$9 billion, is complete in Canada and Wisconsin, but the project has been mired down in Minnesota. Gov. Tim Walz, along with Native American and environmental groups, have opposed the project.

Enbridge placed the Canadian portion of the pipeline into service earlier this month, and the company expected it to increase its overall capacity by about 100,000 bbl/d.

Enbridge said the next step in Minnesota is a public comment period. The receipt of the amended environmental impact statement is an important part of getting a formal reinstatement of a certificate of need from the state that will allow Enbridge to pursue state and federal permits in earnest, according to energy analyst Katie Bays, co-founder of research and consulting firm Sandhill Strategy. But the project still awaits a water quality permit from Minnesota.

The revised environmental impact statement for the oil pipeline was prepared at the direction of the Minnesota Public Utilities Commission, following a state court finding that a previous environmental assessment of Enbridge's proposal failed to adequately study the impact on the Lake Superior watershed. The court order was ultimately upheld in September by the Minnesota Supreme Court, which rejected petitions to set the entire document aside.