Enbridge has not demonstrated a need for its proposed Line 3 replacement in Minnesota, the state’s Commerce Department said Monday. State law requires projects such as Line 3 to receive the certificate before they proceed.

The announcement reflects the findings of an oil market analysis prepared by London Economics International, a global energy economics consulting firm. That analysis determined that refineries in Minnesota and the Upper Midwest “have been operating at high levels of utilization, which indicates both they are not short of physical supplies of crude oil, and that they have little room to increase total crude runs.”

“The age of growth in fossil fuel demand is over,” said Steve Morse, executive director of the Minnesota Environmental Partnership. “We don’t need increased fossil fuel capacity.” Instead, “We need to get about the business of abandoning and cleaning up the existing Line 3.”

A regional business group believes the opposite is true.

“Jobs for Minnesotans firmly disagrees with the Minnesota Department of Commerce opinion on the need for the Enbridge Line 3 Replacement Project. No state is an island when it comes to energy and critical infrastructure. As we move toward more sustainable sources of energy, our state is unequivocally dependent on oil to meet the demands of our state now and into the future. We cannot flip a switch and turn off our reliance on liquid fuels, so it is imperative we ensure our infrastructure continues to be safe for the environment and workers," Jobs for Minnesotans said in a Tuesday statement.

The London Economics analysis said that Enbridge did not provide a sufficient analysis of future demand, and independently finds that “Minnesota demand for refined products appears unlikely to increase in the long term.” The Minnesota Commerce Department said in its announcement.

A Wisconsin segment of the project already has been controversial, with opponents holding at least five demonstrations in rural Douglas County. Several participants have been arrested for disorderly conduct or resisting arrest.

“We commend the Department of Commerce for taking a hard look at the data and carefully considering the criteria that are in law for this type of project," Morse said. "The department found that this pipeline is not needed for Minnesota, that it does not benefit Minnesota, and is not good for Minnesota.” 

The Commerce Department received testimony and information from Enbridge, the independent oil market analysis, an insurance study and the environmental impact statement prepared for the proposed project.

“The testimony also recommends that if a certificate of need is issued, regardless of its decision about removal of the existing Line 3 for its entire right-of-way, the PUC should (where it has regulatory authority) require Enbridge to remove all 223 segments (8,496 feet) of exposed pipeline in Minnesota,” the Commerce Department said.

Line 3 is a critical piece of infrastructure that will be replaced with state-of-the-art materials and modern technology operated by trained individuals, noted Jobs for Minnesotans.

"It is an integrity-driven project to ensure our state can continue to safely transport energy to the people and businesses who depend on it for all aspects of our daily lives. Furthermore, our state will gain 6,500 local Minnesota jobs over two years and will benefit from more than $2 billion in economic impact, according to a recent University of Minnesota Duluth study. To say this project is not needed reflects a short-sighted outlook on the future well-being of business, labor and community in our state. This perspective will be shared as our organization continues to participate in the review process for this integral project,” the pro-business group said.

A public comment period is scheduled this fall. The process will include a series of public hearings presided over by an administrative law judge. The judge will also hold an evidentiary hearing in Saint Paul for testimony and cross-examination of witnesses by official parties to the proceeding.

After those hearings, the judge will submit a report to the PUC with findings of facts, conclusions of law and recommendations about issuing a certificate of need and a route permit for Line 3.

The final environmental impact statement was issued without recommendation last month by the Commerce Department. It can be found on the Internet by clicking here.

Enbridge officials were not immediately available for comment.