Rebuttal Evidence Reaffirms Need for Line 3 Pipeline Replacement Project
October 11, 2017
Today, Oct. 11, 2017, Enbridge submitted rebuttal testimony in support of the Line 3 Replacement Project (Project) before the Minnesota Public Utilities Commission (MPUC) that clearly demonstrates the need for this project to ensure future adequacy, reliability and efficiency of energy supply in Minnesota and neighboring states.
Enbridge’s submission includes additional independent expert testimony that addresses the conclusions drawn by London Economics International, whose testimony on behalf of the Department of Commerce (DOC) was narrow in scope, based on flawed analysis that does not address all the factors in the decision to replace Line 3, and fails to take into account the immediate negative economic and supply consequences to Minnesota were Line 3 to be shut down.
As a state with no source of local supply, the Enbridge system is the exclusive pipeline source of crude supply for Minnesota refineries. There is no excess capacity on Enbridge’s system and demand for capacity is expected to grow even under the most conservative forecasts. The incremental capacity restored by replacing Line 3 will address that growth, help regional refineries remain competitive and meet the energy needs of Minnesotans for decades to come.
Enbridge’s rebuttal testimony addresses a number of key topics:
- Shutting Down Line 3:The suggestion that Line 3 can be shut down without any impact on Minnesota is simply not true. Apportionment and property tax reductions would have an immediate effect on Minnesota. Reduced pipeline capacity would increase rail shipments, with as many as 32 additional mile-long trains every day crossing Minnesota. Additional rail facilities would also be required for refineries to utilize rail shipments. The impact on Minnesota’s agricultural economy would be costly and disruptive as evidenced by the agricultural commerce curtailed in 2013-2014 due to increased crude by rail movements.
- Apportionment: Contrary to the DOC testimony, the Enbridge system, which includes Line 3, is currently full and in apportionment. This means demand for capacity exceeds what’s available, and refineries in Minnesota and the Midwest cannot obtain all the crude supply they request. When refiners can’t get the supply they need, they are either forced to produce less or source it through other more costly modes of transportation, like rail, which drives up costs and impacts their competitiveness. Line 3 will ensure an adequate supply for refiners and enable them to continue to provide the energy Minnesotans need.
- Crude production forecast: Additional independent analysis using multiple crude oil supply forecasts was submitted as part of the rebuttal testimony and shows that even under the most conservative forecasts, Enbridge’s system will remain fully utilized after replacement.
- Alternative pipeline scenarios: None of the pipeline systems identified by the DOC as possible alternatives to a new Line 3 are commercially viable. More importantly, none of the alternatives serve Minnesota or would even supply significant crude oil to refineries in the upper Midwest. Regardless, further analysis included in Enbridge’s rebuttal testimony demonstrates that incremental capacity provided by the Line 3 replacement will be needed even if alternative pipelines are built or expanded.
- Refined product demand: The DOC expert testimony wrongly suggests that reduced demand for gasoline due to increased electric vehicle (EV) utilization will reduce the need for further pipeline capacity. The DOC did not take into account demand for refined products like diesel, jet fuel and asphalt – all products that are important to Minnesota and require refining.
Enbridge’s rebuttal testimony clearly and unequivocally demonstrates that Line 3 is critical energy infrastructure required to meet the energy needs of Minnesota and the Midwest in the years ahead.
This project will involve a $2B investment in Minnesota and result in significant safety and economic benefits to Minnesota and neighboring states. It has the support of communities, landowners, labor and elected officials and is essential to helping ensure Minnesota families and businesses have reliable access to affordable energy now and in the years ahead.
Enbridge has built a robust case that meets the criteria for the Certificate of Need and we look forward to a full and fair hearing of all the evidence.