Enbridge Line 3 replacement project, the largest the company has attempted, is the most recent in a line of pipeline projects that have been held up due to anti-fossil fuel sentiment.
The company’s plans to replace the current pipeline have been complicated by disruption by local activists and government procedures. According to Reuters, Enbridge Executive Vice President Guy Jarvis told investors that they expected Line 3 to be operational in the latter half of 2019. The project has been objected to by the Minnesota Department of Commerce who found that the company had not sufficiently proven the need for the new pipeline, saying that “serious environmental and socioeconomic risks and effects outweigh limited benefits [of the new pipeline]”. They added that, even if a need was proven, there were ‘reasonable alternatives’ to a new pipeline.
Enbridge has countered by proposing the economic benefits for communities along the line (which represents an almost €6 billion investment for the company) in terms of job creation and investment in local infrastructure.
However, this comes as the company is also under scrutiny of their management of their Line 5 pipeline, which travels under the Great Lakes. Enbridge failed to report damage to the line’s outer coating for two years, receiving calls for greater transparency and some to suspend operations.
It’s not just activists and local governments who have challenged new pipelines. French insurance giant, Axa, announced 12 December that they were divesting from coal and tar sands pipelines.
CEO of Axa, Thomas Buberl said in a statement that “Unsustainable business will become un-investable and uninsurable business,” adding “in the spirit of the Paris Agreement, we want to accelerate our commitment and confirm our leadership in the fight against global warming”. The company is also upping its green investments to €12 billion from the original €4 billion it pledged in 2015.
In a seperate move, World Bank also anounced that it would no longer finance upstream oil and gas after 2019. The organisation did give the exception of the poorest countries where they was obvious need and if the investment was compatable with the country in question's Paris Agreement commitments.
In 2013 a report produced by Oxford University studied the effects of divestment in fossil fuel industries, commenting that although direct effects might be negligible (for example , in the face of growing demand from emerging economies), effects of stigmatisation on subjective valuations of companies have the potential to be substantial.
Enbridge’s Line 3 joins Trans Canada’s Keystone Pipeline and Kinder Morgan’s Trans Mountain Pipeline as the latest project delayed due to activism and difficulties with government, local and otherwise.
Article was updated 16:20 13/12/2017 to include World Bank's announcement that it would cease funding upstream oil and gas after 2019.