Professional Documents
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Enbridge Line 6B Phase 2 Application To MPSC
Enbridge Line 6B Phase 2 Application To MPSC
Michael S. Ashton
mashton@fraserlawfirm.com
(517) 377-0875
Michael S. Ashton
MSA/arb
Enclosures
cc:
All parties of record
Michael
S. Ashton
LANSING
DETROIT
STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
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TABLE OF CONTENTS
I.
INTRODUCTION .................................................................................................. 1
II.
PROCEDURAL OVERVIEW................................................................................ 1
III.
2.
B.
The Phase 2 Project Will Replace All the Remaining Segments of Line 6B ......... 4
C.
D.
The Phase 2 Project Allows Line 6B to Continue to Furnish the Same Utility
Service..................................................................................................................... 6
E.
IV.
1.
2.
3.
4.
The Evidentiary Record Establishes that the Phase 2 Project is Needed .............. 10
1.
2.
B.
C.
The Design of the Pipeline Will Meet or Exceed Current Safety and Engineering
Standards ............................................................................................................... 16
V.
CONCLUSION ..................................................................................................... 16
VI.
ii
I.
INTRODUCTION
On April 16, 2012, Enbridge Energy, Limited Partnership (Enbridge) filed an
application seeking authority from the Michigan Public Service Commission ("Commission")
pursuant to 1929 PA 16; MCL 483.1 et seq. and Rule 601 of the Commissions Rules of Practice
and Procedure, R 460.17601 to construct, own and operate approximately 110 miles of new 36inch diameter pipeline and 50 miles of new 30-inch diameter pipeline, all of which replace
certain 30-inch diameter pipeline segments on its existing crude oil and petroleum pipeline
known as Line 6B in the counties of Berrien, Cass, St. Joseph, Kalamazoo, Calhoun, Jackson,
Ingham, Oakland, Macomb and St. Clair, Michigan. This project is known as the Line 6B Phase
2 Replacement Project (the Phase 2 Project). The Phase 2 Project serves two important
purposes. First, the Phase 2 Project benefits the public by replacing all of the remaining pipeline
segments of Line 6B in Michigan thereby reducing the level of future maintenance activities that
would otherwise be required. Second, the Phase 2 Project will restore and increase Line 6Bs
operating capacity to allow Enbridge to serve the current and forecasted future needs of its
shippers, which includes refineries that serve Michigan and the surrounding region. The
Commission Staff supports the approval of this Application concluding that it is "in the public
interest." (6 Tr 479).
II.
PROCEDURAL OVERVIEW
After due notice, a prehearing conference was held on June, 6, 2012. At the prehearing,
the petitions to intervene of Mr. LeRoy Rodgers, Mr. David Schmick, Mr. Steven Fischer and
The John E. Fetzer Institute, Inc. were granted. Subsequently, the petitions to intervene of the
Joanne Holden Trust and Mr. and Mrs. Jerry and Joanne Mains were also granted.
On November 13, 2012, an evidentiary hearing was conducted. Enbridge presented four
witnesses: (1) Mr. Mark Sitek, the Vice President of Major Projects Execution, who testified as
to need for and public benefits of the Phase 2 Project; (2) Mr. Thomas Hodge, Enbridge's Project
Director, who testified to the design and construction of the Phase 2 Project; (3) Ms. Rachel
Shetka, Enbridge's Senior Environmental Analyst, who prepared and sponsored the
Environmental Impact Report for the Phase 2 Project; and (4) Mr. Douglas Aller, Enbridge's
Land and Right-of-Way Project Manager, who testified as to right-of-way requirements for the
Phase 2 Project.
The Commission Staff presented one witness, Mr. Travis Warner, a Public Utilities
Engineer for the Commission. Mr. Warner testified in support of Enbridge's Application
concluding the Phase 2 Project was necessary and in the public interest. None of the Intervenors
presented any testimony.
III.
Overview of Line 6B
The Phase 2 Project Will Replace All the Remaining Segments of Line 6B
On December 6, 2011 and May 24, 2012, this Commission issued orders approving the
Michigan portion of Enbridges Line 6B Maintenance and Rehabilitation Program. The
Commissions December 6, 2011 Order in U-16856 approved the replacement of three noncontiguous segments of Line 6B, each of which were approximately five-miles in length and
located in the counties of Cass, St. Joseph and Calhoun, Michigan. The Commissions May 24,
2012 Order in U-16838 approved replacement of two contiguous segments of Line 6B with the
combined length of approximately fifty-miles. These two segments span from Enbridges
Stockbridge Pump Station and Terminal Facility in Ingham County to Enbridges Ortonville
Station in Oakland County.
If approved, the pending Phase 2 Project will replace all the remaining 210 miles of Line
6B and also result in improvements and upgrades at various pumping stations.3 The first 50
miles of the Phase 2 Project are known as Segment Nos. 1A and 2A, and are located in Indiana
and, thus are not the subject of this Application. (6 Tr 291.) The remaining replacement segments
2
6 Tr 290.
This Application addresses the installation of new station facilities at the existing station sites of
Niles Pump Station in Cass County; Mendon Pump Station in St. Joseph County; Stockbridge
Pump Station and Terminal Facility in Ingham County; Howell Pump Station in Livingston
County; Ortonville Station in Oakland County; and St. Clair Station in St. Clair County,
Michigan.
3
are located in Michigan and are referred to as Segment 2B in Berrien and Cass Counties;
Segment 3A in Cass and St. Joseph Counties; Segment 4A in Kalamazoo and Calhoun Counties;
Segment 5A in Calhoun, Jackson and Ingham Counties; and Segment 8 in Oakland, Macomb and
St. Clair Counties. (Id.) The overall description of the Phase 2 Project is set forth in Table No. 1:
Table No. 1
Overall Project Description
Segment No.
Begin
End
Mileage
Counties Crossed
State
Segment 1A
470.5
499.5
29
IN
Segment 2A
504.7
525.8
21.1
IN
50.1
Segment 2B
525.8
538.3
12.5
Berrien, Cass
MI
Segment 3A
543.5
577
33.5
MI
Segment 4A
582
607.7
25.7
MI
Segment 5A
612.7
650.6
37.9
MI
Segment 8
701
751
50.0
MI
159.6
(6 Tr 293.)
C.
Each Michigan municipality crossed by the Phase 2 Project is a municipality where Line
6B is already located and operating. (6 Tr 298-9.) No municipality sought intervention in this
proceeding.
D.
The Phase 2 Project leaves unaffected the nature of the service to be furnished by Line
6B and will continue to be part of the same common-carrier crude oil pipeline system described
above. (6 Tr 300.) When the Phase 2 Project is completed, Enbridge will continue to own and
operate the pipeline and related facilities. (Id.)
E.
From Griffith to Stockbridge (which include Segments 2B, 3A, 4A, 5A located in
Michigan), Enbridge will replace those segments with a new 36-inch diameter pipeline. (6 Tr
357-9.) This is consistent with the same size of pipeline that the Commission approved for the
three five-mile segments in MPSC Case U-16856. This new 36-inch diameter pipeline will not
only restore the original capacity of Line 6B but also allow Enbridge to meet the forecasted
future transportation needs of its shippers, including delivery to the Marathon Refinery in Detroit
and the BP Refinery near Toledo, Ohio both of which are served indirectly by Line 6B through
Line 17 and (the soon to be constructed Line 79). (6 Tr 304 -5.) Enbridge will replace the
segment from the Ortonville station to the St. Clair River (Segment 8) with a new 30-inch
diameter pipeline, which is consistent with the same size of pipeline approved by this
Commission for the 50-mile segment from Stockbridge to Ortonville in Case U-16838. (6 Tr
359.)
2.
The Phase 2 Project will be designed, constructed, installed, operated and maintained to
meet or exceed applicable pipeline safety requirements including, but not limited to, those
specified in 49 CFR Parts 194 and 195 to protect the public health and safety and minimize
6
environmental impact. (6 Tr 362.) The Phase 2 Project will have the following pipeline
specifications as shown on Table No. 2 of Exhibit A-2:
Table No. 2
36-inch Diameter
Pipeline
Pipeline Specifications
Diameter
Wall thickness
Coating
1400 psi
N/A
N/A
1260 psi
Pipe
3.
Upon completion of the Phase 2 Project, Enbridge will have replaced Line 6B in its entirety
from Griffith, Indiana to the St. Clair River in Marysville, Michigan. (6 Tr 294.) This will enable
Enbridge to establish new maximum allowable operating pressures and capacity levels in
accordance with federal pipeline safety regulations, specifically 49 CFR Parts 194 and 195 and
applicable national technical standards. (6 Tr 296-8.) Without replacement, Line 6B is expected
to continue to operate at pressures below the previous maximum operating pressure and the
available pipeline capacity on Line 6B is reduced as a direct result. (Id.) By replacing the
remaining segments of Line 6B with new pipeline, Enbridge will be able to achieve its original
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ultimate capacity and also provide the pipeline capacity necessary to meet its shippers current
and forecasted future transportation requirements. (6 Tr 297.) Table No. 3 shows the existing and
post construction capacity of Line 6B:
Table No. 3
PostConstruction
PostConstruction
36-Inch (BPD) **
889,000
30-Inch (BPD) **
583,333
800,000
525,000
550,000
550,000
500,000
500,000
1400 psi
1260 psi
Existing Line 6B
Pipeline Capacity
30-Inch (BPD)*
Maximum Operating
Pressure (72% of
maximum yield strength)
450,000*
Ranged from 400,000
(bpd) to 410,000
(bpd)*
624 psi*
(6 Tr 364.)
4.
Right-Of-Way Requirements
The permanent
right-of-way is needed to maintain an offset or buffer from its existing Line 6B and the new
pipeline, and a buffer between the new pipeline and the edge of the right-of-way to prevent harm
from encroachments and third party excavations.(Id.) In addition, to the temporary workspace
needed for construction, there may be areas along the Phase 2 Project where Enbridge will need
to acquire additional temporary workspace to avoid encroachments, or certain land or
environmental features. (Id.) In limited situations, a route deviation may be necessary to address
a special landowner requirement or to avoid special land or environmental features. (Id.) In those
cases, Enbridge will need to acquire a new 60-foot permanent right-of-way easement. Enbridge
will work with its affected landowners to make those minor route adjustments on a case-by-case
basis. (Id.) The typical permanent right-of-way requirements and temporary workspace required
during construction of the Phase 2 Project are shown on Table No. 4 below.
Table No. 4
Typical Construction Footprint and Right-of-Way Requirements
Typical Construction Footprint
Land Type
Typical
Survey
Corridor
Typical
Construction
Footprint
Temporary
Work
Space
Use of
Existing
Permanent
Right-of-Way
New
Permanent
Right-of-Way
Additional
Temporary
Work Space
at
Crossings
Right-of-way requirements where the new pipeline segments will be co-located within or abutting the existing
Line 6B. /1
Upland
250 feet
105 feet
55 feet
Varies **
Wetland
250 feet
80 feet
30 feet
Varies **
Varies up to
50 feet
Varies up to
50 feet
75 feet
Right-of-way requirements where the new pipeline segments will not be co-located with the existing Line 6B. /2
Upland
250 feet
105 feet
45 feet
Wetland
250 feet
80 feet
20 feet
Not Applicable
(6 Tr 368.)
60 feet
75 feet
IV.
LEGAL ANALYSIS
In considering an Act 16 application, the Commission examines whether there is a need
for the project and if the proposed pipeline is designed and routed in a reasonable manner, which
meets or exceeds current safety and engineering standards. In Re Wolverine Pipeline, Case U13225, Opinion and Order dated July 23, 2002, the Commission stated:
Act 16 provides the Commission with broad jurisdiction to approve
the construction, maintenance, operation, and routing of pipelines
delivering liquid petroleum products for public use. Generally, the
Commission will grant an application pursuant to Act 16 when it
finds that the applicant has demonstrated a public need for the
proposed pipeline and that the proposed pipeline is designed and
routed in a reasonable manner, which meets or exceeds current
safety and engineering standards. (Id., at pages 4-5.)
The evidence presented in this case demonstrates that there is a public need for the Phase 2
Project and that the proposed pipeline is designed and routed in a reasonable manner, which
meets or exceeds current safety and engineering standards. As a result, the Commission should
approve this Application.
A.
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public interest because it minimizes the amount and frequency of maintenance activities. (Id.)
Additionally, the Phase 2 Project represents an efficient, alternative integrity management
approach that is environmentally responsible and has the least long term recurring impacts to
landowners and local communities. (Id.) Replacing these pipeline segments benefits the public
as it reduces future integrity excavations and maintenance activities, which otherwise would be
needed. (Id.) It also provides the added public benefit of minimizing impacts from recurring
disruptions to landowners, local communities and the environment over the long term. (Id.)
The Commission Staff has reviewed Enbridges Phase 2 Project and agrees that
replacement of these segments of Line 6B is in the public interest. On behalf of Staff, Mr.
Warner testified that the proposed replacement was a proper method to address the integrity
issues on Line 6B. Mr. Warner concluded that any integrity issues present in the current Line
6B would be eliminated if it is replaced by a new pipeline and the existing segments are
rendered inactive. (6 Tr 469) As a result, Staff concluded that replacement is a better
alternative because with the number of repairs needed on the pipeline, Enbridge would routinely
be in the right-of-way causing ongoing long-term issues for landowners. (6 Tr 470.)
No party presented any evidence to contradict Enbridges or the Staffs conclusion that
the Phase 2 Project is an environmentally responsible and efficient method to maintain the
integrity of Line 6B. Further, even if these segments were not replaced and continued to be
operated under Enbridges maintenance and rehabilitation program, as discussed below, the
pipeline capacity on Line 6B will not meet shippers current and forecasted transportation
requirements.
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2.
The Phase 2 Project provides a substantial public benefit by providing the needed
common carrier pipeline capacity on Line 6B necessary to meet Michigans and the regions
petroleum needs. Shippers have a current need for additional pipeline capacity on Line 6B. This
is evidenced in part by the fact that Line 6B is operating under periodic apportionment.4 (6 Tr
297.) This is also evidenced by support by shippers and regional refineries, for the expanded
capacity created by the Phase 2 Project. (6 Tr 297-8.) Based on these undisputed factors, there is
a need for additional pipeline capacity on Line 6B.
Enbridge is forecasting continued transportation demands, which will result in increased
shipper apportionment on Line 6B absent replacement from Griffith to Stockbridge with 36-inch
diameter pipe and certain facility installations, and replacement from Ortonville to the St. Clair
River with 30-inch diameter pipe. (6 Tr 303.) This growing demand is largely driven by ongoing
and planned refinery upgrades and expansions in Michigan and Ohio and near-term anticipated
demand increases by eastern Canadian refineries for growing crude supplies produced in parts of
North America that are connected to the Enbridge Mainline System. (Id.) Based on this growing
demand for capacity on Line 6B, the additional pipeline capacity afforded by the Phase 2 Project
is in the public interest because it will alleviate the current and anticipated capacity constraints
on Line 6B. (Id.) Thus, shippers are reliant upon the Phase 2 Project to meet their transportation
requirements for increased incremental pipeline capacity from Griffith to Stockbridge, and
further to Ontario and eastern United States markets. (Id.)
4
When nominations on a pipeline exceed available capacity in a given month, the volumes
nominated are allocated amongst those shippers that nominated in a month in accordance with
the specific, nondiscriminatory, procedures detailed in the FERC Rules and Regulations Tariff
on file and in effect. The allocation of capacity when nominations exceed available capacity is
referred to as apportionment.
12
The Phase 2 Project not only meets current and forecasted future capacity requirements
of its shippers, but also provides a secure and reliable crude oil and petroleum supply to local and
regional refineries, who serve the daily requirements of Michigan residents for refined petroleum
products such as gasoline, jet fuels and other petroleum by-products.(6 Tr 304.) It is important to
note that the incremental capacity provided by replacing Line 6B with a 36-inch pipeline
between Griffith and Stockbridge is necessary to meet the forecasted future demand at the
Marathon Detroit and BP-Husky Toledo refineries, the refineries in Ontario, Canada as well as
the refinery in Warren, Pennsylvania. (Id.) Accordingly, the Phase 2 Project is designed to
provide needed capacity to meet the foreseeable future needs in Michigan; northern Ohio;
Ontario, Canada; and western Pennsylvania. (6 Tr 305.)
3. The Phase 2 Project Provides Additional Economic Benefits to
Michigan
The estimated cost of the Phase 2 Project is approximately $1.295 billion. (6 Tr 305.)
Based on this estimated cost and current property tax schedules, this amounts to as much as $23
million dollars in incremental annual property taxes within Michigan beginning in 2014. (Id.)
Additionally, Enbridge anticipates that the Phase 2 Project will provide temporary beneficial
impacts on the local economy during construction. Depending on the availability of local skilled
workers, the general pipeline contractor typically draws upon approximately one-half of the
workers from Michigan and surrounding states. (Id.) As a result, unemployment in the area
would be temporarily reduced and payroll taxes would temporarily rise. (6 Tr 306.) Local
businesses would also benefit from the temporary demand for goods and services generated by
the workforces need for food, lodging and supplies. (6 Tr 306.) The total economic benefits of
the Phase 2 Project are estimated at $3.1 billion during the same year of construction. (6 Tr 305.)
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The proposed pipeline route is reasonable because the Phase 2 Project follows the path of
the existing Line 6B pipeline. Both Enbridge and Staff support the reasonableness of the route.
Mr. Hodge concluded that the proposed route was the "superior route corridor" and explained:
Enbridge believes that the pipeline route selected for the
replacement segments, as submitted in its Application, is in the
public interest and the superior route corridor. The pipeline route
minimizes unavoidable environmental impacts by constructing, to
the extent feasible, immediately adjacent to Enbridges existing
and previously disturbed right-of-way, which will result in fewer
impacts on natural resources, such as cultural and historic
resources, wetlands, waterways, forested areas, drains, agricultural
land, and prime farmland. The Project is the most environmentally
acceptable and is the most practical route from an engineering,
construction, and operational aspect, and also takes into
consideration the minimization of impacts and inconveniences to
affected landowners. (6 Tr 369.)
Similarly, Staff testified that Enbridge's proposed route "is the most logical option from the
perspective of long-term environmental and land-owner impacts." (6 Tr 475.) Staff explained:
From an environmental standpoint, the replacement segment will be
in or adjacent to existing right-of-way for the majority of the
project. These areas have been previously disturbed due to the
original construction of Line 6B. Enbridge has also performed
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The Design of the Pipeline Will Meet or Exceed Current Safety and
Engineering Standards
Materials Safety Administrations Office of Pipeline Safety (PHMSA) is the agency that is
responsible for the enforcement of the design, construction and safety of the pipeline. (6 Tr 464.)
As testified by Mr. Hodge, the pipeline will be designed, constructed, installed, operated and
maintained to meet or exceed applicable pipeline safety requirements including, but not limited
to, those specified in 49 CFR Parts 194 and 195 to protect the public health and safety and
minimize the environmental impact. (6 Tr 362.) Pursuant to MCL 483.6, Enbridge also makes an
explicit authorized acceptance of 1929 PA 16, as amended. (6 Tr 311.)
V.
CONCLUSION
Enbridge's Application should be approved because the Phase 2 Project is needed, the
pipeline route is reasonable and the replacement pipeline will meet or exceed current safety and
engineering standards. The Phase 2 Project is needed because it is an environmentally
responsible and efficient method to maintain the future integrity of Line 6B. Maintaining Line
6B is necessary because Line 6B serves as a vital transportation link, providing refineries with
the crude oil needed to meet a significant portion of Michigan and the surrounding regions
refined petroleum needs.
forecasted future transportation requirements of the shippers who use Line 6B. Without restoring
and expanding the capacity of Line 6B, the refineries serving Michigan and the surrounding
region will not have access to the level of feedstock supplies needed to serve Michigan and other
consumers. The route is reasonable because it follows the corridor of the existing pipeline, which
will minimize the impact to the environment and landowners. Finally, the pipeline will be
16
designed, constructed, installed, operated and maintained to meet or exceed applicable pipeline
safety requirements.
After its review, the Commission Staff supports approval of Enbridge's Application. The
Commission Staff has determined that the Phase 2 Project is needed, the route reasonable and
that the Phase 2 Project is designed to meet or exceed current safety and engineering standards.
No other party has filed testimony specifically challenging the need for the Phase 2 Project or
proposing an alternative route for this needed Phase 2 Project. Further, no party has challenged
the safety or engineering standards proposed for the Phase 2 Project. As a result, the Commission
should grant Enbridge's Application.
VI.
RELIEF REQUESTED
WHEREFORE, Enbridge Energy, Limited Partnership respectfully requests that this
Honorable Commission, acting under its authority pursuant to 1929 PA 16, as amended, and
Rule 601 grant the following relief:
A. Approve and grant Enbridges Application for the Phase 2 Project;
B. Find and certify that the Phase 2 Project is just, reasonable and in the public interest;
C. Issue its Order granting Enbridge the authority to design, construct, install, test,
operate, maintain, repair and own the replaced Segment Nos. 2B, 3A, 4A, 5A and 8
and the related appurtenances for the transportation of crude oil and petroleum as
described herein, including the Niles Pump Station, Mendon Pump Station,
Stockbridge Pump Station and Terminal Facility, Howell Pump Station, Ortonville
Station and St. Clair Station; and
D. Grant such further relief as the Commission deems necessary and appropriate.
17
Respectfully submitted,
Michael
S. Ashton
Dated: December 19, 2012
______________________________________
Michael S. Ashton
Fraser Trebilcock Davis & Dunlap, P.C.
124 West Allegan, Suite 1000
Lansing, Michigan 48933
(517) 377-0875
mashton@fraserlawfirm.com
18
STATE OF MICHIGAN
BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION
IN RE ENBRIDGE ENERGY, LIMITED
PARTNERSHIP
APPLICATION PURSUANT TO 1929 PA
16; MCL 483.1 et seq. and Rule 601 of the
Michigan Public Service Commissions
Rules of Practice and Procedure, R
460.17601 to Replace, Construct and
Operate Certain Pipeline Segments for the
Transportation of Crude Oil and
Petroleum in Berrien, Cass, St. Joseph,
Kalamazoo, Calhoun, Jackson, Ingham,
Oakland, Macomb, St. Clair Counties,
Michigan
)
)
)
)
)
)
)
)
)
)
)
)
)
)
PROOF OF SERVICE
Angela R. Babbitt certifies that on the 19th day of December, 2012, she served a copy of
Enbridge Energy, Limited Partnership's Initial Brief and this Proof of Service in the above
docket on the persons identified on the attached service list by electronic mail.
Angela R.
Babbitt
______
Angie R. Babbitt
Steven Fischer
12199 Dutch Settlement Rd.
Three Rivers, MI 49093
Profile42@frontier.com