A setback for Line 3: What the latest court ruling means for the future of the project

The Minnesota Court of Appeals ruled Monday that state regulators failed to consider the impact of an oil spill in Lake Superior’s watershed when they approved an environmental review for Enbridge’s Line 3 project and dealt a setback to plans for the controversial oil pipeline.

The court sided with a coalition of tribes and environmental nonprofits in reversing a decision by the state’s Public Utilities Commission. The ruling may delay Enbridge’s progress toward building the $2.6 billion project.

While the environmental impact study (EIS) — a 13,500 page document — was approved unanimously by the five-member PUC last year, Judge James B. Florey wrote that its failure to address an oil spill that could flow into Lake Superior ultimately made it deficient. “The bottom line is the court decided that the environmental impact statement that was prepared for Line 3 does not meet the statutory standards,” said Scott Strand, an attorney representing Friends of the Headwaters in the lawsuit. “It’s not adequate.”

Enbridge hopes to build Line 3 to replace an aging and corroding 34-inch pipeline that is currently operating at about half capacity. The new 36-inch pipeline would traverse a similar, but altered, 337-mile route through north-Central Minnesota, passing through the Mississippi Headwaters region before reaching a terminal in Superior, Wisconsin. It would carry about 760,000 barrels of oil per day.

Enbridge still needs a few state permits and approval from the Army Corps of Engineers before it can begin Line 3 construction. The company had hoped to start building earlier this year, but extended its timeline to November. Enbridge’s timeline could now be pushed even further back if the PUC takes a harder look at the potential impact of spills near Lake Superior. An Enbridge spokeswoman did not say if the company would appeal the decision.

Here’s what the court order means for the future of the project:

It’s a victory for Line 3 opponents — but a narrow one

State law requires environmental review for projects like Line 3. The PUC uses that study to help decide whether to grant a route permit and a Certificate of Need for the plan, which are critical approvals.

For the Line 3 EIS, a specialized branch of the state Department of Commerce modeled the potential spread of oil from seven sites along potential pipeline routes, chosen to “represent a diversity of environmental conditions,” says the court ruling. Three of those sites were on the Mississippi River, but none was in Lake Superior’s watershed.

Florey, the judge, dismissed that idea, saying there would be “little point” in doing environmental review if its requirements for evidence-based decisions “could be ignored and replaced by cursory oral assertions during the adequacy hearing before the commission.” He said concern over an oil spill that could flow into Lake Superior was raised during public comments and not addressed with evidence.

That was the extent of the appellate court’s decision, however. The ruling shot down eight other arguments made by tribal or environmental groups about why the EIS for Enbridge’s project was deficient.  

For example, Friends of the Headwaters said the environmental review did not fully analyze the potential impacts Line 3 would have on greenhouse gas emissions. The court ruling says, however, the review adequately researched Line 3’s climate impact, and estimated a 30-year “social cost of carbon” from the greenhouse gas emissions at more than $120 billion.

The court also ruled the environmental review did enough to research Line 3’s potential impact to “historic and cultural resources,” including tribal property and culture. The White Earth, Red Lake and Mille Lacs bands of Ojibwe argued the study should have included a survey of “traditional cultural properties” under the National Historic Preservation Act.

The judge’s ruling said state law requires some analysis of impacts to tribes but doesn’t prescribe a specific approach to that research. The EIS “addresses historic and cultural resources in several chapters,” the ruling says.

Line 3 would cross some tribal land after Enbridge struck a deal with the Fond Du Lac Band of Lake Superior Chippewa. The pipeline would also also pass through ceded treaty land where other tribes hunt and fish. Winona LaDuke, executive director of Honor the Earth, another group that is part of the lawsuit, said they were considering an appeal of the decision, in part because of the judge’s ruling on the cultural survey. “Our wild rice and waters must be protected,” she said.

It’s probably a delay, not a death blow

Because the judge ruled against the environmental review on one point, Enbridge and others largely painted the court ruling as just another step to complete before starting construction, not a threat to the project as a whole. More spill research won’t necessarily lead the PUC to judge the project any differently in the end.

Juli Kellner, a spokeswoman for Enbridge, said the company was disappointed with the ruling, but noted it affirmed “eight of the nine disputed aspects of the analysis and decision” related to the environmental review, and only “identified one issue for further analysis.”

“We are in the process of a detailed analysis of the court’s decision and will consult with the MPUC and other state agencies about next steps,” Kellner said.

In a written statement sent to media, Jobs for Minnesotans, a coalition of business and labor groups working to promote mining and projects like Line 3, described the court ruling as vindication of the vast majority of the environmental review, “with one exception.” Once that new research is completed, the project can move forward, the collective argued.

So far, the PUC has agreed there is a need for Line 3. Its members have publicly argued the project is necessary to protect against a spill from the old pipeline it would replace.

The commission is considered quasi-judicial and has three Democrats, one Republican and one commissioner with no party affiliation. Four members were chosen by former Gov. Mark Dayton, and current Gov. Tim Walz picked one. Walz sidestepped candidates for the job with direct lines to the Line 3 debate and picked Valerie Means, a mediator who once represented public utilities and telecom companies at the PUC and in state and federal courts.

Strand, the attorney representing Friends of the Headwaters, said Monday’s order was still significant even if the appeals court didn’t agree with all their arguments. The PUC will have to do more research on spills and decide again whether to approve the project, he said. The new information will be factored into their decision, Strand said, and he predicted it would show an oil spill that contaminates Lake Superior would be “extremely difficult and very expensive” to clean up. And in the meantime, the Line 3 project won’t be able to move forward, he said.

Other lawsuits remain

The lawsuit over the environmental review is just one of the legal challenges to Line 3. The route permit and Certificate of Need are also facing scrutiny in the judicial system in cases that have yet to be decided.

Perhaps the most high-profile legal challenge is one led by the state Department of Commerce. The agency has argued Enbridge did not prove there’s a demand for crude oil that would be supplied by Line 3. “It is too soon to say how, if at all, the decision will affect other pending cases,” said Emma Bauer, a spokeswoman for the Commerce department, in an email Monday.

Friends of the Headwaters, Honor the Earth and the Sierra Club have also filed a lawsuit over the Line 3 route permit, alleging the PUC did not choose the path with the least environmental risks, among other arguments.