(Bloomberg) -- Enbridge Inc.’s Line 3 crude oil pipeline replacement project is facing another potential setback in Minnesota.
The state’s new governor, Tim Walz, announced that his commerce department will petition the Public Utility Commission to reconsider its approval of Line 3, prolonging a process begun by his predecessor Mark Dayton.
“Projects like these don’t just need a building permit to go forward, they also need a social permit,” Walz said in a tweet.
The Public Utility Commission approved Enbridge’s plan to replace and expand its Line 3 oil pipeline last year, clearing the way for the project to move ahead. The line will carry 370,000 more barrels a day of crude, including heavy oil sands oil, from Hardisty, Alberta, to Superior, Wisconsin.
The company has said the line will start service by the second half of 2019 and any delay could prolong a Western Canadian pipeline bottleneck that’s lasted more than a year and sent heavy Canadian crude prices to the widest discount against West Texas Intermediate futures in a decade. The situation grew so extreme that the Alberta government announced mandatory production curtailments starting in January and extending until year end. With reduced Canadian exports, prices of heavy crude have surged on the U.S. Gulf Coast amid new sanctions on Venezuelan oil.
Enbridge spokeswoman Juli Kellner said the governor’s decision is "unfortunate," but doesn’t impact the timing of Line 3’s construction. The company continues to work toward bringing the line into service by year-end and "believes the Commission will deny petitions for reconsideration as they have in the past,” Kellner said in an email.
The Minnesota division of the American Petroleum Institute criticized the governor’s decision.
“Governor Walz’s decision goes against all of the decisions to date made by the Public Utility Commission and even the Obama Administration -- both of whom recognized the critical need this project meets for Minnesotans and expressed their support for Line 3 replacement,” the trade organization said in an emailed release.
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