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Regulatory delay in approving pipeline puts tax revenue and jobs at risk in northern Minnesota

Enbridge—the company trying to gain approval to build the Sandpiper oil pipeline across northern Minnesota—just announced it is buying a $1.5 billion stake in the Dakota Access pipeline.   The purchase, according to the Star Tribune, puts the future of the Sandpiper pipeline “in doubt.”  That’s because the Dakota Access pipeline should provide enough new capacity to decrease Enbridge’s mid-term need for the Sandpiper pipeline.

This is a huge blow to northern Minnesota’s economy.  An uncertain future for the Sandpiper pipeline means an uncertain future for $25 million in annual property taxes a new pipeline would contribute to revenue strapped northern Minnesota communities.  It also means an uncertain future for 1,500 construction jobs.

Minnesota is clearly not open for business.   That’s the message Minnesota regulators are communicating to any business paying attention to this process.

A permit process that normally takes one year is now well into its third year.  And all this delay is over a pipeline that will largely rest alongside pipelines in existing utility corridors.  Only a quarter of the pipeline’s path will blaze new trail.

The approval process for the Dakota Access pipeline in states surrounding Minnesota exposes just how excessive and burdensome Minnesota’s regulatory process is.

Permit applications for the Dakota Access pipeline—the pipeline now reducing the capacity demand for the Sandpiper pipeline—were filed a year after Enbridge began the permitting process for the Sandpiper pipeline in Minnesota.  The table below shows that all of the state permits necessary for the Dakota Access pipeline were approved within a year and half, and two of the four were approved in under a year.  By contrast, the time to approve the Minnesota permit for the Sandpiper pipeline just surpassed 1,000 days with no clear end in sight.

There’s simply no reasonable justification for the Minnesota permitting process to take three times as long as the process in surrounding states, but that is in fact the case.

Permit Approval Timeline for the Dakota Access Pipeline
Date Filed Date Approved Elapsed Time
Iowa October 29, 2014 March 10, 2016 498 Days
South Dakota December 15, 2014 November 30, 2015 350 Days
North Dakota December 22, 2014 January 20, 2016 394 Days
Illinois December 22, 2014 December 16, 2015 359 Days
Permit Approval Timeline for the Sandpiper Pipeline
Date Filed Date Approved Elapsed Time
North Dakota October 30, 2013 June 25, 2014 238 Days
Minnesota November 8, 2013 In Process 1,001 Days and Counting

The picture below shows the route for the Dakota Access pipeline.  The pipeline’s route takes it within about 15 miles of Minnesota.  Of course, it’s no coincidence the pipeline avoids the state.  The picture illustrates quite plainly the problem with Minnesota’s regulatory process and prompts an important question: Just how many businesses across other industries are avoiding Minnesota to avoid the state’s excessive regulatory burdens?

Dakota Access Pipeline Route

Dakota Access

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