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How a Keystone XL-size pipeline project is moving ahead without U.S. review

A new lawsuit argues that the State Department is obligated to insist that Enbridge’s plans for expanded capacity across Minnesota undergo environmental review. 

While TransCanada’s Corp.’s Keystone XL project remains mired in federal environmental review and state-level litigation over its route across Nebraska, its competitors over at Enbridge Inc. have been quietly ramping up to comparable capacity on a pipeline across northern Minnesota — without waiting for approval from Washington.

To be sure, Enbridge has asked the Obama administration to bless its expanded pumping of tar-sands oil via its Line 67, popularly known as the Alberta Clipper. But it has also served notice to the State Department [PDF] that it will be going ahead in any case.

Enbridge’s position is that it can stay within the law and accomplish its expansion goals simply by using existing permits, some equipment upgrades and a bit of mechanical switcheroo for a short stretch astride the international border.

So far, the State Department seems to have accepted that reasoning without complaint. And that triggered a lawsuit filed yesterday morning [PDF] by a coalition of environmental and tribal plaintiffs from Minnesota and around the country.

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In their view, the department is not only authorized but obligated to insist that Enbridge’s expansion plans undergo a Keystone-style environmental review — including the critical determination as to whether the project is in the national interest of the United States.

The lawsuit’s chances of success are difficult to gauge, but the implications of failure are not:

Bigger than Keystone XL

Enbridge will proceed to carry, on average, 880,000 barrels of heavy crude oil per day — and potentially higher volumes of lighter grades — from the tar-sands mines of Alberta to the docks and pipeline interconnections at Superior, Wisconsin.

That’s actually a bit more than the design capacity of 830,000 barrels per day for Keystone XL, which would carry oil from the Alberta tar sands and the Bakken oil patch in North Dakota to refineries mostly in the Gulf Coast region.

By now you may be wondering: How in the world could this happen?

Enbridge actually has two pipelines that enter the United States near Neche, North Dakota, just west of the Minnesota state line, and is busily enlarging both of them to accommodate the oil boom in both countries:

  • Line 3, a 34-inch line built in the late 1960s, running from Edmonton, Alberta, to Superior.
  • Line 67, or Alberta Clipper, a 36-inch line built in 2008-2010, running from Hardisty, Alberta,  to Superior.

The two lines share a right-of-way in the critical three-mile zone below the international border where a U.S. presidential permit (prepared by the State Department) is required to construct a new pipeline or, in the case of the Alberta Clipper, to significantly increase the volume of oil it carries.

Line 3 is now operating under a 1991 presidential permit, and Line 67 under a permit issued in 2009. Not quite two years ago, Enbridge asked for a new presidential permit to increase its shipments on the latter line from about 450,000 barrels per day now to 570,000 bpd by mid-2014 and up to 800,000 bpd by mid-2015.

Source: Enbridge

Switching pipelines for 17.5 miles

More recently, the company has announced plans for extensive rebuilding of Line 3 to increase its capacity (although, as a good piece by David Shaffer in the Strib pointed out last month, the reconstruction would also serve to address safety and reliability issues on “a 1960s-era line that has ruptured repeatedly”).

The rebuilt Line 3 will have the same 36-inch diameter as Line 67, except perhaps for a short section at the border that has already been replaced with 34.5-inch pipe.

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In a letter to the State Department dated last June 16, Enbridge’s law firm in Washington offered “supplemental information” in relation to its permit application, because of “the unforeseen Line 67 Project permitting delay at the Department of over a year [which] has led Enbridge to recently assess options for achieving this additional capacity.”

Utilizing upgrades to its pumping stations on Line 67, and the recently rebuilt short section of Line 3 in the border zone, Enbridge declared its intention to raise its trans-border shipments to 880,000 bpd or more, pretty much immediately, by temporarily shunting the oil from one pipeline to another at the border:

As we discussed, Enbridge will accomplish this by constructing interconnections between Line 67 and its adjacent Line 3 to provide Enbridge with the capability to allow increased volumes of crude oil to: (1) move on Line 67 in Canada; (2) be transferred to Line 3 at Enbridge’s Gretna, Manitoba station at a point approximately 1.5 miles north of the U.S.-Canada border; (3) cross the U.S.-Canada border on the Line 3 border segment; and (4) then be transferred back to Line 67 approximately 16 miles south of the U.S.-Canada border….

Enbridge intends to initiate construction of the interconnections in both Canada and the United States in the coming weeks, and construction is expected to be completed by [date redacted as confidential business information]. The construction and operation of the U.S. interconnections does not require any federal, state, and/or local approvals….

Canadian approvals, through a simplified notice process, have been obtained. Enbridge has also obtained all necessary Canadian approvals to transport increased volumes of crude oil on Line 67 in Canada.

Enbridge’s letter acknowledges that it needs — and expects to get — some incidental permits from the Army Corps of Engineers, the Minnesota Public Utilities Commission, and the federal Pipeline and Hazardous Materials Administration.

A temporary workaround?

And while the project has been reported in some media as a temporary workaround, the letter seems to indicate that the rerouting could be used indefinitely:

This plan to enhance the operational flexibility of Enbridge’s existing pipeline system through interconnections between lines is consistent with current pipeline industry practice.  Historically, Enbridge has constructed a number of interconnections between its adjacent lines to ensure shipper needs are met in the event of unforeseen events or contingencies, such as a power outages [sic]  or maintenance, which may affect Enbridge’s ability to use a line or a portion of a line. Enbridge is currently preparing information to provide to the Department regarding Enbridge’s practice of optimizing its pipeline system through such interconnections, and will submit this information shortly.

According to the lawsuit, the State Department acquiesced to the plan in a letter dated last July 24, which said that Enbridge could operate as planned “without further authorization or analysis of the environmental impacts from the State Department.”

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In signing off in that fashion, the lawsuit says, officials at State have ignored the requirements of the National Environmental Policy Act, as well as other laws and the department’s own rules, that such projects undergo an environmental assessment before getting the green light.

The suit also contends that a rebuilt, 36-inch Line 3 exceeds the terms of its 1991 permit, which was for a 34-inch line.

And the plaintiffs  claim violations of the federal Freedom of Information Act in the State Department’s slow response to various inquiries about its discussions with Enbridge, which are characterized as “collusion” in the press materials if not in the lawsuit itself.

There was a high degree of outrage in a teleconference yesterday in which reporters heard from plaintiff groups including the Sierra Club, the National Wildlife Federation, the Center for Biological Diversity, the White Earth Nation and Honor the Earth.

More than once, it was noted that the Enbridge pipelines cross some highly sensitive stretches of northern Minnesota landscape, including public and tribal lands, and that it was an Enbridge pipeline carrying tar-sands crude that failed near Kalamazoo, Michigan, in July 2010, creating a mess that’s still being cleaned up.

Politics and pipelines

I wondered, though, why so much time had passed between the State Department’s signoff and yesterday’s court filing, so later in the day I put the question to Jim Murphy, a senior counsel for the National Wildlife Federation in Vermont, who had a key role in preparing the lawsuit. He explained that some time was spent waiting to see if the issue would be revisited in routine  proceedings on Enbridge’s application, which they hadn’t been as of mid-September. After that, he said,

We met with State Department, just finding out the facts. We wanted to get their explanation. We sent some strongly worded letters to Secretary Kerry about it.

I think our initial hope was that this was some kind of mid-level bureaucratic decision that escaped attention, and that if we brought some attention to it, that we’d get a resolution without having to file suit. But it became pretty obvious over the course of a few weeks that no actions were being taken to reverse the decision.

Then I asked if he thought the State Department might be more amenable to reconsidering its view of things from this point forward, with last week’s midterm elections rapidly receding in the rear-view mirror:

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You know, I hope these things are aren’t influenced by elections and politics but that’s probably a naive perspective.

From my perspective, the substance of this is pretty strong. And we continue to hope that the State Department reverses course without a judge having to tell them to do so.