State regulators back controversial northern Minnesota oil pipeline

State regulators on Friday approved the proposed Sandpiper pipeline, a controversial project designed to run 225,000 barrels per day of North Dakota crude oil across Minnesota.

The unanimous decision by the Minnesota Public Utilities Commission allows Canadian pipeline company Enbridge to move forward on the project. However, it could take months for the commission to discuss and approve the pipeline's specific route.

The company's preferred route crosses northern Minnesota near the headwaters of the Mississippi River, which prompted opposition from environmental groups and tribal groups.

But rather than rejecting a certificate of need as those groups had requested, the PUC will instead consider the company's route as well as an alternative route that some of the state's environmental experts have said would be less risky.

The PUC came close to including a second alternative route — one that would avoid the headwaters. Enbridge opposed that option because it would not connect to its terminal in Clearbrook, Minn.

But Commissioner Nancy Lange changed her vote, saying she was concerned analyzing and evaluating the additional route would be too time consuming and costly.

The PUC also made major changes to the 100-page document an administrative law judge issued in April endorsing Sandpiper, weakening some of the judge's assertions that the pipeline would give Minnesota direct economic benefits and could sharply reduce or even eliminate rail congestion.

The commission added requirements for environmental review of the pipeline's route, including a study of the cumulative impacts of both the Sandpiper and Enbridge's Line 3, a line that carries oil from Alberta's tar sands region, which the company hopes to relocate along the Sandpiper route.

Enbridge officials said they were pleased with the commission's decision. Spokeswoman Lorraine Little said the company hopes the route decision will be complete by the end of next year in time for the pipeline to be built and in service in 2017.

"The decision today is really a reflection of the great support the project has," Little said, noting that 95 percent of private landowners along the route have signed easement agreements with the company.

The Minnesota Agriculture and Energy Alliance also applauded the decision.

"We are pleased that the Commission recognized that this project will provide a benefit to the economy, public safety and efficiency in delivering energy," said Lance Klatt, a member of the alliance and executive director of a group that represents Minnesota gas stations and convenience stores.

But environmental groups and tribal groups expressed deep disappointment.

Melanie Benjamin, chief executive of the Mille Lacs Band of Ojibwe, lamented the lack of formal hearings on reservation lands.

"The Commission took this action despite concerns from tribal communities that live adjacent to the proposed route," she said. "This is another example of the voices of American Indians being disregarded in favor of the rich and powerful."

Friends of the Headwaters, the group that proposed several alternatives to the pipeline, said the commission's decision only explores one slightly different route than what the company proposed, and that the modified route still goes through the Mississippi River headwaters.

"The commission had an opportunity to give the public a real voice in the location of pipelines in Minnesota," said Kathryn Hoffman, the group's attorney. "Instead they decided that the only voice that counts is that of the company's."

Pipeline opponents have the option of appealing the commission's decision.

MPR News reporter Dan Kraker contributed to this report.