After years of political jostling, environmental groups celebrated President Obama’s Nov. 6, 2015, rejection of the Keystone XL pipeline. “America is now a global leader when it comes to taking serious action to fight climate change,” he said.
As he spoke, another pipeline known as the Alberta Clipper was already transporting some 800,000 barrels per day (BPD) of tar sands crude—the same type and essentially the same volume of oil as the proposed Keystone—to U.S. refineries.
While Keystone has monopolized public outrage, the State Department has quietly allowed a similar project to move ahead. The Clipper is one link in a broader network of pipelines, operated by Canadian oil giant Enbridge, Inc., that extends from the Alberta tar sands all the way to refineries on the Gulf Coast. Environmental groups warn that this could lead to a dramatic increase in the production of tar-sands oil—one of the dirtiest and most environmentally hazardous types of fuel— with little public scrutiny.
Keystone and the Clipper
Keystone and the Alberta Clipper, or Line 67, were both proposed at roughly the same time for the sampe purpose: transport tar sands oil from the Alberta tar sands to the United States in huge quantities. But while Keystone was condemned to regulatory purgatory and eventually blocked, the Clipper and its associated projects have been allowed to go ahead.
Keystone’s biggest regulatory liability was the fact that it was a single 2,000-mile long stretch of pipeline that would cross a national border and various state boundaries. The fact that it stretched across both Canada and the United States meant both governments would have to agree to the environmentally sensitive project, while its sheer scale meant it was bound to attract unwanted attention and controversy.
Enbridge, meanwhile, appears to have deftly avoided these problems. Rather than one massive pipeline project, Enbridge has instead built or proposed many smaller, seemingly disparate pipeline projects from the Upper Midwest southward.
The Alberta Clipper, or Line 67, is the centerpiece of Enbridge’s crossborder pipeline network. The challenge of exploiting Albertan tar sands oil is that it is not only relatively remote, but land-locked. Upon extraction, it has to be transported to be refined, processed and exported. This was the purpose of the Clipper, which was meant to move the oil from the Alberta tar sands across the U.S.-Canada border to a distribution terminal in Superior, Wisconsin. However, under federal law, any infrastructure project that crosses a U.S. border first requires a federal permit and an accompanying environmental review—the same process that doomed Keystone.
A brief history of the Clipper
Enbridge’s legal maneuvering began from the start. In 2007, the company proposed, and the State Department approved, a permit for the Clipper to operate strictly at 450,000 barrels per day (BPD)—even though Enbridge had built the pipeline with a design capacity of almost double that.
When the State Department carried out an environmental impact statement (EIS) for the project, it only considered the potential impact of the first, smaller capacity—not the pipeline’s full capacity. Several environmental groups challenged the permit in court in 2009 on the basis that the EIS was inadequate. According to those involved, it was known that Enbridge aimed to use the pipeline’s full capacity down the line.
“Enbridge had already made it clear to investors that that was the plan,” says Doug Hayes, staff attorney with the Sierra Club, who was involved in the original lawsuit.
Nonetheless, Enbridge denied they had any current plans to expand, and the judge sided with them and the State Department. The permit for 450,000 BPD was allowed to proceed. By October 2010, Line 67 was operational and was sending this quantity of tar sands oil over the Canadian-U.S. border—around the same time Keystone XL began to capture national attention.
Despite its denials, two years after Line 67 was up and running, in November 2012, Enbridge informed the State Department that it did indeed wish to operate the pipeline at its full design capacity of 800,000 BPD, for which it would need a new permit. This time, however, it would have to go through the process in a post-Keystone America.
In the two years since the Alberta Clipper began transporting oil, Keystone had gone from a little-known project to a full-fledged political controversy. Anti-Keystone protesters had been arrested outside the White House, and celebrities like Mark Ruffalo and Julia Louis-Dreyfus were speaking out against the pipeline.
Sure enough, Enbridge began to feel the pressure. Crowds of protesters turned out for Minnesota’s Public Utilities Commission’s proceeding on the pipeline, and there was massive involvement in the first public comment period held by the State Department in 2013.
On top of this, the permitting process for the Clipper dragged on for more than a year with no progress. Enbridge had already applied for approval from Stephen Harper’s oil-friendly Conservative government to start pushing 800,000 BPD of crude through the 670 miles of Line 67 that lay on Canada’s side of the border. It just needed the State Department’s approval for the project to go ahead.
“Enbridge saw what happened to Keystone XL and some of these other pipelines, and … they decided to avoid this public review process,” says Hayes.
The Clipper “switcheroo”
It was at this point, in 2014, that Enbridge switched tack and utilized what some environmental activists have called an “illegal switcheroo.” Instead of relying on Line 67 to transport 800,000 BPD of crude oil across the U.S.-Canada border, the company would briefly divert the crude to another existing pipeline called Line 3. This segment would then transport the oil across the border before it was ultimately transferred back to Line 67 in Minnesota.
In June 2014, Enbridge’s lawyers outlined the project in a letter to the State Department. They cited the more than year-long “unforeseen Line 67 project permitting delay” as the reason for the project, but also presented Enbridge as a custodian of the public interest. The company had a duty to shippers and refiners, they explained, who would be hit with higher transportation costs if Enbridge didn’t step up its capacity, as well as to ordinary consumers, who might see domestic oil prices spike. Enbridge’s lawyers wrote that the company would proceed with this plan “whether or not a new Presidential Permit is issued.”
This dubious maneuver relied on what critics say was an additional sleight of hand: another new segment of pipeline to carry the crude across the border, packaged as an update to Line 3. In February and March 2014, Enbridge informed the State Department it planned to undertake a “maintenance-driven replacement” of the nearly 50-year old Line 3, which stretched from Edmonton to Superior. But rather than swapping it with an identical but improved replacement, it proposed an entirely new pipeline of a larger diameter that would travel through a different route for 238 miles.
To complete the plan, Enbridge would construct four totally new pipeline interconnections between Line 67 and its new “replacement” Line 3: two at the company’s Gretna, Manitoba station in Canada, and two more in the United States just south of the border.
Because Enbridge already regularly constructed interconnections between adjacent lines “in the event of unforeseen events or contingencies, such as power outages or maintenance,” it argued, it didn’t need a permit for these interconnections.
Ultimately, the State Department acceded to these changes without requiring new permits or environmental reviews. In November 2014, a coalition of tribal and environmental groups filed suit against the department, claiming that it had violated federal preservation and environmental laws and calling for an injunction on the bypass project until it went through the full permitting process.
Emails between Enbridge’s lawyers and the State Department, made public in April 2015 as part of the suit, show staffers apparently working to help Enbridge tiptoe around regulations.
“Enbridge needs to do the horizontal drilling under the 2 rivers in the border segment for Line 3 … two weeks from now,” Ona Hahs, attorney-advisor for the State Department’s Office of the Legal Advisor told State staff in one email. “So we’re running out of time on that one.”
On December 9, the federal judge ruled in favor of Enbridge and the State Department, arguing that the State Department’s decision is not subject to judicial review. For the groups who filed the suit, one option will be to appeal the decision.
As with Keystone, Obama or the State Department could step in and tell Enbridge it needs a permit to keep pumping 800,000 BPD of oil over the border. If left to their own devices, they’re unlikely to do so.
“Through the Keystone campaign, America learned that it could fight pipelines,” says Andy Pearson, Minnesota350’s Midwest tar sands co-ordinator. “The normal has changed. You’re not going to be able to put a pipeline without facing opposition, anywhere in the country.”
In the meantime, Enbridge has already completed construction of the new border segment that connects to the Alberta Clipper, which, since mid-2015, has allowed the company to transport increased volumes of tar-sands crude over the border without further delay.
In an emailed statement, Enbridge spokesperson Lorraine Little told In These Times: “The United States Department of State is well aware of our replacement of Line 3 at the border for maintenance reasons and has advised us that that replacement was consistent with our existing Line 3 permit and requires no further approval and/or environmental review by the Department. … Our operation of Line 67 at the border is likewise fully consistent with the capacity allowed for that line by the existing presidential permit. Further, the Department has acknowledged that is has no regulatory authority beyond the area near the border and our interconnects are located outside that area, thus raising no question as to their legality.”
Enbridge’s end game
Ken Rumelt, staff attorney at Vermont Law School’s Environmental and Natural Resources Law Clinic, says that Enbridge’s endgame has always been clear: Even though projects have been proposed piecemeal, they constitute one large network capable of ramping up transport of Canadian tar sands to the Gulf Coast. More than 50 percent of U.S. refining capacity and most of U.S. heavy crude processing capacity is located on the Gulf.
To that apparent end, Enbridge has a number of other pipeline projects either already in existence or in the works, which form links in this network. The rest of the Line 3 replacement, for one, is due to go online in 2017, at which point it will open up a new corridor for tar sands oil to flow in through the Upper Midwest.
Then there’s Line 61, a huge, 42-inch pipeline built in 2007 that runs from Superior to Flanagan, Ill. Enbridge wanted to triple its currently approved capacity to a massive 1.2 million BPD, which would make it the largest tar sands pipeline in North America. Rather than building anew, Enbridge plans to simply pump more oil through the pipeline, and in September 2015 it was finally able to break ground on the 13th and final additional pumping station. The expansion is expected to go online in summer 2016. Enbridge also has plans to build a “twin” for Line 61 to help carry the flood of extra oil pumped by the Line 3 expansion.
The final links in this tar sands chain have been around for some time. Two pipelines will run nearly 800,000 BPD from Flanagan to Cushing, Okla., where they link up with Enbridge’s 500-mile long Seaway pipeline and its 850,000 BPD capacity “twin.” These pipelines extend all the way to the Gulf Coast.
Two days before Obama’s Keystone rejection, Enbridge announced plans to build import and export facilities at the Gulf of Mexico region. With Congress and President Obama having lifted the United States’ 40-year ban on oil exports in December, Enbridge is now perfectly positioned to export tar sands oil through the Gulf.
“It’s Keystone times two,” says Rumelt
Enbridge’s incremental approach to pipeline building, critics charge, has helped obscure its endgame of connecting the pipelines into one vast transportation network. By only proposing small local and interstate projects, Enbridge has skirted the much more stringent federal regulation process, while also keeping pipeline fights localized and out of the national press.
This strategy has worked. TransCanada fought and lost a very public, five-year long battle with the federal government over Keystone. When was the last time you heard about Enbridge’s pipelines?
Stonewalling and seizures
To get these projects off the ground, Enbridge has often resorted to underhanded tactics.
“Enbridge has a history of strong arming individual landowners … threatening eminent domain and a slew of other threats and forms of intimidation,” says Elizabeth Ward, the Sierra Club’s conservation programs coordinator.
Eminent domain, the seizure of private property without the owner’s consent for public use, has traditionally been employed by the government for the “public use” of land, such as building highways or schools. In 2004, however, the Supreme Court ruled that private entities could also be granted this power if their plans brought “public benefit”—in other words, if they created jobs or brought other economic gains. While Enbridge prefers to negotiate with landowners over the fair price of their property, if they dispute the price or refuse to sell, the company can use eminent domain to take it—a tactic it has a history of using.
The company has also been accused of stonewalling environmental groups, local tribes and communities, and, in some cases, governmental bodies, keeping projects under a strict veil of secrecy. Several people I spoke with have said the company outright refuses to engage with them about their concerns.
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