Pipeline “poison approvals”: a new trend?

When it comes to pipeline regulatory decisions, we’re seeing a significant new trend: “Poison approvals”

The thing about inertia is that it’s pretty hard to resist, especially when it’s been in place for decades. When it comes to oil and gas pipeline permits, the inertia in place for government agencies at all levels to simply rubber stamp approvals runs deep. When most state and federal regulatory bodies were established many decades ago, little thought was given to environmental risk or public opinion for pipelines, and certainly no consideration of climate change. Approval was the default option.

But ever since Keystone XL sparked a national firestorm of public opposition over the environmental and social threats posed by pipeline projects, cracks in the edifice have appeared. . The inertia to approve dirty and dangerous infrastructure has been weakening and a new normal of increased scrutiny is emerging. This seems to have diminished the inevitability of getting approvals for tar sands pipelines, even if greater scrutiny is yet to succeed in blocking pipelines carrying fracked oil, such as the Dakota Access pipeline, or fracked gas, which have seen dozens of approvals in recent months.

This week, a decision by an Administrative Law Judge regarding the Line 3 tar sands pipeline in Minnesota became the latest in the trend.The decision, at first glance, looks like an approval for Enbridge to build a new tar sands pipeline (“Line 3”) through Minnesota. But at second glance, the picture is far less clear. The Judge recommended that Enbridge’s preferred route be denied, and that the 7th (yes, you read that right, the SEVENTH) alternative route be the only one considered for ultimate approval by the Minnesota Public Utilities Commission.

That seventh alternative route requires Enbridge to dig up the existing Line 3 pipeline, which is 50 years old and is no longer safe, and build a new larger Line 3 in what would be the vacant trench – a task Enbridge estimates would cost an extra $1.28 billion. Enbridge’s preference is to have a new corridor approved for the new Line 3 and to literally abandon the existing pipeline, leaving it in place, unused, for years to come. The Judge said that would be of no benefit to Minnesotans.

The Judge determined that to abandon the existing pipeline in-place would put Minnesota taxpayers on the hook for any remediation deriving from the degradation of the pipeline in Minnesota soil, meaning that the only option in which Minnesotans would benefit is one in which the existing pipeline is dealt with by Enbridge. While we would contend that pipeline companies should always be required to clean up the mess they leave behind, this is nevertheless an important admission by the Judge.

The Judge wrote:

Applicant seeks to decommission and abandon its old Line 3 in place. That would mean nearly 300 miles of steel infrastructure being abandoned in Minnesota, where it will remain for hundreds, if not thousands, of years. In addition, the easements that Applicant has obtained from landowners for the new Line 3 allow it to “idle in place” the new line, thereby signaling to the Commission that Applicant also intends to someday abandon the new Line 3 when it no longer serves Applicant’s needs.

The abandonment of the old Line 3 and the creation of a new corridor leaves open the possibility of thousands of miles of Enbridge pipelines someday being abandoned in- place when they are no longer economically useful to Applicant. This is particularly true in a carbon-conscious world moving away from fossil fuels; a move that Minnesota aspires to follow.

Though there’s some things to like in the judge’s decision, suggesting that Alternative Route 7 would have a net public benefit for Minnesotans is, of course, a problematic position to take. Firstly, the existing pipeline runs through the reservation lands of the Leech Lake Band of Ojibwe, who stand firmly opposed to the project. Recent reporting suggests they’ve got a strong case to stop this option. Secondly, the very purpose of the new Line 3 project — to increase the transport of tar sands bitumen — flies in the face of the imperatives presented by climate change. We know that we can not afford expansion of the tar sands or any new fossil fuel infrastructure if we are to meet our climate goals.

Despite this, the Judge’s recommendation for  an alternative pipeline route that even the company itself is unsupportive of is strikingly similar to another recent state PUC decision for a controversial tar sands pipeline: Keystone XL.

One of President Trump’s first actions as President was to resurrect Keystone XL from its previous rejection. He seemed entirely unaware at the time, that the Nebraska Public Services Commission needed to approve the route through the state before Keystone XL could move forward. When the PSC issued its decision in November 2017, it decided to approve an alternative route rather than TransCanada’s proposed route. This new route requires new agreements with landowners, may require a new environmental impact statement, and a lengthy delay before any pipeline construction can begin, if it ever in fact does. In fact, a recent lawsuit brought by landowners suggests the approval of an alternative route may not have even been a legal decision by the PSC. TransCanada, meanwhile, has to this day held off on issuing a final determination as to whether it will build the pipeline.

The similarities between the “approvals” of alternative routes in the Keystone XL and Line 3 pipelines indicate an emerging shift in the regulatory consensus around pipeline approvals. No longer is it a foregone conclusion that oil and gas pipelines will get what they want, with no regard for public safety, climate concerns, or other impacts. The pressure regulatory bodies are under is no longer one-sided. But much more remains to be done.

The proposed alternative for Line 3 will be more costly than the original plan, by a large margin. Given the economics of pipelines and tar sands projects, these costs represent a major hit to the viability of the project. So the question remains: can Enbridge actually move forward with Line 3 under this scenario? And similar to Keystone XL, are there legal questions yet to be resolved??

The Minnesota Administrative Law Judge was clear that the so-called “need” for the pipeline did not outweigh the costs in any other scenario, and the scenario suggested by the Judge is one not without its own major issues. Was the Judge trying to say “no” without using the letters “N” and “O”, perhaps?

The moves in Nebraska and Minnesota clearly indicate that the decision makers were very uncomfortable with approving these projects, having been exposed to the full suite of evidence, from a very engaged and concerned public..

In the Minnesota case, the Judge talks about the need to move away from fossil fuels in the context of climate change and the fact that the pipeline will only benefit tar sands producers and not Minnesotans. Yet, despite this clear recognition of the costs of this project, the Judge still decided to put forward an approved route that she perhaps knew Enbridge has little interest in pursuing. A poison approval of sorts.

So the inertia still remains, albeit of much less force. Inertia is a hard thing to buck, but pipeline fighters and water protectors are showing they’re up to the task. Now it is up to the five members of the Minnesota Public Utilities Commission – the next decision makers on this project – to face reality and reject the Line 3 pipeline outright.