In a decision which could have far-reaching consequences for the North American pipeline landscape, the independent National Energy Board (NEB) of Canada has given conditional approval Enbridge's application to replace its 1,660 km Line 3 oil pipeline between Alberta and Wisconsin.
This would allow the company to ship 760,000 barrels per day through the new line with a 91-centimeter pipe, providing new shipping opportunities into the United States for Canadian oil producers. The company currently ships about 390,000 bpd through the existing line. Cost of the replacement has been estimated at $7.5 billion, which would be the highest in Enbridge's history.
Still, the proposal requires regulatory approval by the Canadian Federal Government. Federal Natural Resources Minister Jim Carr released a statement that said the federal government will now undertake an additional review of upstream oil and gas emissions, before issuing its decision on the project in fall 2016. And American regulators must also give their approval as the pipeline would cross into the United States. Enbridge is currently overseeing this process.
“The hearing panel is of the view that replacing the existing Line 3 pipeline is an important step in the lifecycle of the pipeline,” NEB chief environment officer Robert Steedman said.
The pipeline is currently operating at about half capacity after the company voluntarily reduced pressure because of reliability concerns. Enbridge argues that a new pipeline would help to mitigate environmental risks.