Sandpiper oil pipeline through upper Midwest states likely dead as investors look elsewhere, environmental groups said. File Photo by smereka/Shutterstock
ST. PAUL, Minn., Aug. 4 (UPI) -- Environmental groups in the U.S. Midwest claimed a win after an investment decision by pipeline company Enbridge likely ruled out a controversial oil project.
Enbridge Energy Partners and Marathon Petroleum Corp. said they established a new joint venture to acquire a stake in the Bakken Pipeline system, a system that links the North Dakota oil fields to regional networks. Once the acquisition is cleared, the companies said they'd give up on their options for the Sandpiper pipeline, a project under environmental review.
Sandpiper would stretch 616 miles from North Dakota oil basins, through Minnesota and to an Enbridge terminal in Superior, Wis. It would then transfer oil to other pipelines for delivery to the United States and Canadian refinery markets.
State regulators in Minnesota in a 3-2 decision reached two years ago called on Enbridge to study the environmental issues surrounding six alternative routes through the state proposed by outside groups.
Jane Kleeb, the president of advocacy group Bold Alliance, said in an emailed statement the decision from Enbridge and Marathon shows energy companies are "finally catching up" with sentiments on the ground.
"Our country does not need any more pipeline infrastructure to meet our energy needs," she said.
North Dakota is the No. 2 oil producer in the nation. The rate of growth in the state's Bakken shale reserve basin was more than existing pipeline infrastructure can handle, forcing many in the industry to turn to rail as an alternate transit method.
A federal report found crude oil transit by rail was down by almost 50 percent from last year in part because of the addition of new pipelines and declining production from North Dakota and other states. Crude oil production in North Dakota in May, the last full month for which data are available, was 15 percent lower than the all-time high from December 2014.
With Marathon out as the major investor in Sandpiper, the advocacy groups said it's unlikely another investor would move in to take its place. Nevertheless, with Enbridge one of the largest pipeline operators in the region, they said its continued investments in other networks was representative of "the death warrant of fossil fuels."