After surviving another legal challenge, line 3 is almost ready – .

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After surviving another legal challenge, line 3 is almost ready – .


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Waiting a long time for a much-anticipated event to arrive can seem a bit like marking the days before the start of summer vacation.

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For Canadian oil producers, that moment is approaching as the completion of Enbridge’s Line 3 replacement project is finally in sight.

Earlier this week, the project withstood another legal challenge in the United States, as the Minnesota Supreme Court ruled that it would not hear appeals from opponents of the pipeline receiving the necessary approvals from regulators, which has brought line 3 closer to its completion.

Enbridge CEO Al Monaco recently said the project is expected to start operating in the fourth quarter. The company filed for the toll supplement with regulators earlier this month, which could go into effect as early as September 15, Bloomberg News reported.

It won’t be until 18 days, although it might take a little longer before the pipeline is fully operational.

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“It’s about moving from a future theoretical concept to something physical, which has always been the challenge for pipelines,” Kevin Birn, analyst at energy consultancy IHS Markit, said on Friday.

“There have been a lot of projects in the past, but very few have reached the finish line. “

It took, on average, more than seven years for the two remaining pipeline projects in Western Canada – Line 3 and the Trans Mountain expansion – to pass from initial regulatory filings to planned completion, Birn said.

In other words, this is usually the time it takes for a newborn to reach the first year.

Based on this timeline, a new greenfield pipeline project launched today would not reach the arrival zone until 2028, which seems highly unlikely given the ongoing energy transition and growing climate considerations, as well as financial risks.

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Like virtually all of the major Canadian oil pipelines proposed over the past decade, the Line 3 proponents had to navigate difficult regulatory, legal and political currents to get there.

Unlike Northern Gateway, Energy East, and Keystone XL, it survived.

Energy Minister Sonya Savage, who worked at Enbridge almost seven years ago when the company initially submitted the project to Canadian regulators, said it took a long time for the line 3 is as close to being completed.

Minister of Energy Sonya Savage Photo par AMBER BRACKEN /The Canadian Press File

“For producers, it’s important. This helps remove bottlenecks and should improve the distribution on the Enbridge Mainline, ”Savage said in an interview Friday.

“It is certainly a great relief and real pressure value for the industry to have this additional capacity. “

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The project replaces the pipe in the system that was originally commissioned in the 1960s and which connects Alberta to Superior, Wisconsin. When completed, the project will allow the line’s capacity to increase to 760,000 barrels per day (bpd) from approximately 390,000 bpd.

Calgary-based Enbridge initially filed its project application with the National Energy Board (now known as Canada’s Energy Regulator) in 2014.

In November 2016, Prime Minister Justin Trudeau gave the green light to development, while Line 3 is expected to be completed by 2019.

The $ 5.3 billion Canadian segment of the Line 3 replacement project was completed almost two years ago. But it was south of the border that the $ 4 billion development met the most opposition, mainly in Minnesota, from environmental groups and some Indigenous communities.

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Construction began in Minnesota last December, while protests continued, including Wednesday in the state capital. Tuesday’s court ruling continued recent legal advancements for Enbridge, supporting the project’s certificate of need, environmental impact statement, and route permit.

“The most studied pipeline project in Minnesota history has passed another hurdle,” Enbridge spokeswoman Tracy Larsson said in a statement.

The company said some legal challenges remain in the Minnesota Court of Appeals and in a U.S. federal court, but it is important that the project has reached the distance to the finish line.

While Keystone XL, Northern Gateway and Energy East failed to move forward, oil sands production has increased in Alberta.

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US President Joe Biden canceled Keystone XL’s license on his first day in office on January 20. Photo by Andrew Burton / Getty Images Files

The supply of crude oil in Western Canada jumped nearly 650,000 barrels per day between 2015 and 2019, while pipeline export capacity only increased by 340,000 bpd, according to IHS Markit .

Without the construction of Line 3, Birn predicts that western Canadian oil production available for export could exceed existing pipeline capacity by the end of this year.

The former executive of TransCanada Corp. Dennis McConaghy, who wrote a book in 2019 on the country’s pipeline debate, said Line 3 was initially seen as a development that would add some capacity to the overall oil transportation system.

But it was expected that larger export pipelines like Keystone XL (KXL) would also be needed to handle the additional production from western Canada that was to flow.

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“What should have been a shallow exercise stretched almost as long as KXL, and the sad part is that the increase may be enough to deal with the additional oil production,” said McConaghy, who worked on the Keystone XL project.

“It’s very welcome, but it’s still a sad litany of how long it took. “

Line 3 is not the only Canadian pipeline moving forward, as the Trans Mountain expansion is still under construction. Work on the $ 12.6 billion project, which is owned by the Canadian government, is now more than 30 percent complete.

Pieces of the Trans Mountain pipeline project are in a storage lot outside of Abbotsford, British Columbia.
Pieces of the Trans Mountain pipeline project are in a storage lot outside of Abbotsford, British Columbia. Photo de Cole Burston/AFP via Getty Images

A Trans Mountain official said on Friday that construction of the pipeline would be complete by the end of 2022, with commercial operations starting shortly thereafter.

Canadian Energy Pipeline Association CEO Chris Bloomer noted that Line 3 and the Trans Mountain were proposed at a different time by developers, but they have proven that such projects can be built.

Ultimately.

“It’s kind of like you can’t hold your breath forever, so we held our breath a few times and had to breathe in between,” Bloomer said.

“But once we’re on the other side of that, there’s going to be a lot of thinking about where we’re from to get there. “

Chris Varcoe is a columnist for the Calgary Herald.

[email protected]

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