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Guest Opinion: Crude oil pipelines or quality water?

The Minnesota Public Utilities Commission will be holding two hearings on Wednesday, Oct. 25, at the Crosslake Community Center regarding Enbridge Energy's application for a (1) certificate of need, and (2) routing permit if the certificate is approved. The hearings, conducted by Administrative Law Judge Ann O'Reilly, will hear reports by Enbridge (the applicant), the Minnesota Department of Commerce, and the intervening parties. There will be an opportunity for local organizations and units of government, local residents, and members of the public to provide testimony about the project and the pending decisions.

Enbridge Energy Project Manager Paul Eberth made a presentation Dec. 18, 2014 to the Brainerd Lakes Chamber of Commerce members. As reported in the Dec. 31, 2014 Brainerd Dispatch and Echo Journal papers, Eberth said, "We've employed many engineers and scientists to study the route. Barr Engineering did some studies on the route and studied which watersheds we would cross, and which lakes we would potentially impact, should there be an impact, and the results were that we do cross about 14 different watersheds, but really, we only have the connectivity to about 3 percent of lakes in those watersheds."

Eberth also reported that Barr Engineering, a contract engineering firm to Enbridge Energy, identified Norway Lake, the Whitefish Chain and Roosevelt Lake as three lakes within the lakes area that are all hydrologically connected and at risk along the Sandpiper (which is also the proposed Line 3 route).

What is a Certificate of Need (CN)?

Minnesota law and regulations provide the basis for the Certificate of Need decision by the PUC while addressing four (4) primary criteria:

"A certificate of need shall be granted to the applicant if it is determined that:

A. the probable result of denial would adversely affect the future adequacy, reliability, or efficiency of energy supply to the applicant, to the applicant's customers, or to the people of Minnesota and neighboring states, including (1) accuracy of the applicant's forecast of demand,

B. a more reasonable and prudent alternative to the proposed facility has not been demonstrated by a preponderance of the evidence on the record by parties or persons other than the applicant;

C. the consequences to society of granting the certificate of need are more favorable than the consequences of denying the certificate, considering (1) the relationship of the proposed facility to overall state energy needs, and (2) the effect of the proposed facility upon the natural and socioeconomic environments compared to the effect of not building the facility; and

D. it has not been demonstrated . . . that the design, construction, or operation of the proposed facility will fail to comply with . . . relevant policies, rules, and regulations of other state and federal agencies and local governments." Statutory Authority: MS s 216B.08; 216B.2421; 216B.243; 216C.10

Is There a Need?

Minnesota Department of Commerce (DOC), Energy Regulation and Planning and Dr. Marie Fagan, an economist with London Economics International LLC (LEI), reported in early September 2017 that Enbridge has not demonstrated that the "minimal" benefits to Minnesota exceed the "high" socioeconomic and environmental costs. In a press release September 11, 2017 the DOC stated "in light of the serious risks and effects on the natural and socioeconomic environments of the existing Line 3 and the limited benefit that the existing Line 3 provides to Minnesota refineries, it is reasonable to conclude that Minnesota would be better off if Enbridge proposed to cease operations of the existing Line 3, without any new pipeline being built."

The facts about Need are:

• Enbridge Mainline Corridor capacity (six lines); western Canada through Minnesota to Superior to Joliet, Ill.—present capacity of 2,850,000 barrels per day (barrel = 42 gallons)

• The MinnCan line from Clearbrook to the Twin Cities (and not routed to Superior)

• design capacity is 465,000 barrels per day; major supplier to Minnesota

• transports crude from Clearbrook to Flint Hills (Pine Bend) and St. Paul Park refineries, which reportedly operate at 70-80 percent of design capacity

• Superior refinery (formerly Murphy Oil)

• design capacity of 50,000 barrel per day; operating close to 100 percent of capacity

• provides product (e.g. gasoline, diesel fuel, etc) to northern Minnesota

• 85 percent of Western Canada crude oil "passes through" Minnesota; 15 percent serves Minnesota needs

• Need to consider the energy conservation activities and lesser demand for refined crude oil products in next years (DOC/Enbridge used 2019 — 2035)

Are there natural and socioeconomic environments impacts with approving and constructing the proposed Line 3 expansion and replacement pipeline?

Water quality is and remains among the highest priorities for the area. Whitefish Area Property Owners Association (WAPOA), Pine River Watershed Alliance, and Crosslake Design Team planning this past year affirmed that water quality is among the highest priorities for this area.

Travel, tourism, visitors, second homeowners, seasonal residents, and local businesses benefit from the attraction to water and water-based activities, as well as seasonal interests for snowmobiling, four wheeling, hunting, fishing and boating. As shown in data from the University of Minnesota, the local economy benefits from these activities:

• For 2007-2008 the economic impact of water-based activities for Crow Wing County was $294,295,204 from travelers, $135,953,389 in state revenue, and 7,218 full-time jobs (5,029 direct jobs, 2,189 indirect jobs).

• For 2007-2008 the economic impact of water-based activities for Cass Wing County was $245,867,979 from travelers, $113,581,822 in state revenue, and 6,033 full-time jobs (4,202 direct jobs, 1,831 indirect jobs).

Extending this economic analysis to include Aitkin and Hubbard (Park Rapids area), the annual spending is closer to $725 million and tax revenue is $325 million annually.

As noted, Enbridge and Barr Engineering, its subcontractor, three lakes are at risk—Norway Lake, the Whitefish Chain and Roosevelt Lake—with the Enbridge preferred route. Barr Engineering also identified water wells within 200 feet of the proposed route, saying studies over the last 20 or 30 years have shown that the effects of a spill spread up to 400-600 feet.

A major risk as defined by Enbridge is pipeline line oil spills. The lakes of and about the Whitefish Chain of Lakes and the Pine River Watershed are some of the clearest and cleanest in Minnesota. Our water resources, both surface and ground water with shallow aquifers, are extremely vulnerable to these adverse impacts and threats from construction, spills and leaks.

Actual incidents are highly predictable and can be devastating to these public waters. In fact, Enbridge's reported 804 crude oil spills from 1999 to 2010 involving 161,475 barrels of "uncontrolled releases," or 1.3 spill per week, and 200 barrels and 8400 gallons per spill on the Enbridge system. Since 1968, Minnesota experienced a total of 118 crude oil pipeline spills of one barrel or more with a total of 184,332 barrels spilled in Minnesota, or 1,562 barrels per spill with the last reported in 2009 at Staples.

Enbridge touts property tax revenue as a benefit from taxing easement property with utilities located there. They have provided many varied amounts of property tax revenue. However, Enbridge presently has a property tax refund case before the Minnesota Tax Court, which they have done twice previously, objecting to the property valuation for tax purposes and the amount of property tax paid in a number of counties in northwestern Minnesota. Time will tell whether this property tax revenue is actually the benefit presented in their Line 3 application.

Crude oil pipelines or quality water?

That is the question and issue. This matter is really a "benefit/cost" decision for Minnesota and the residents of our area. Water quality is our priority, water and oil don't mix, and WAPOA found the Minnesota Department of Commerce testimony to be accurate at this time—"Enbridge has not demonstrated that the minimal benefits to Minnesota of the proposed project outweigh the high socioeconomic and environmental costs."

Plan to attend the public hearing in Crosslake on Oct. 25 to listen, learn and participate to protect our water and our local economy.

Watson is president of the Whitefish Area Property Owners Association