Costly pipeline delay
Slow regulatory approval puts tax revenue and jobs at risk in Northern Minnesota.
Enbridge, the Calgary-based energy company, has announced plans to invest a $1.5 billion stake in the Dakota Access pipeline, likely putting at risk the company’s Sandpiper Pipeline Project, its effort to transport oil across northern Minnesota from the Bakken oil field to a terminal in Superior, Wisconsin.
The Dakota Access pipeline should provide enough new capacity to decrease Enbridge’s mid-term need for the Sandpiper pipeline.
Enbridge has been trying to gain approval to build the Sandpiper pipeline for three years, three times the typical approval timeline, according to Peter Nelson, vice president and senior policy fellow at Center of the American Experience.
“Minnesota is clearly not open for business,” he said. “That’s the message Minnesota regulators are communicating to any business paying attention to this process.”
Nelson called it 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 the pipeline would pay to revenue-strapped northern Minnesota communities.”
It also means an uncertain future for 1,500 construction jobs, Nelson said.
The approval process for the Dakota Access pipeline in states surrounding Minnesota exposes just how excessive and burdensome Minnesota’s regulatory process is.
The 1,172-mile Dakota Access pipeline will transport Bakken oil to Patoka, Illinois, through the Dakotas, Iowa and Illinois, bypassing Minnesota entirely. Permit applications for the Dakota Access pipeline were filed a year after Enbridge began the permitting process for the Sandpiper pipeline in Minnesota.
“And all this delay is over a pipeline that will largely rest alongside pipelines in existing utility corridors,” Nelson said. “Only a quarter of the pipeline’s path will blaze new trail.”
The accompanying table 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,” Nelson said. “But that is in fact the case.”
This map 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?