Minnesota Gov. Mark Dayton's administration has called for the approval of a state regulatory board of Enbridge Energy's plan to replace its former Line 3 pipeline in the state.
The Minnesota Department of Commerce said the Utilities Commission was wrong because Enbridge did not file, and the panel did not adequately assess the type of long-range oil demand forecast required by state law.
Dayton, who leaves office Jan. 7, said in a statement he strongly supports the appeal.
He said Enbridge "could not demonstrate that Minnesota needs this pipeline to meet our future oil demand. In fact, most of the product would flow through our state to fuel other states and countries."
Line 3, built in the 1960s, traverses northern Minnesota and a corner of North Dakota on its way to Alberta to the Enbridge terminal in Superior, Wisconsin.
Enbridge says it is increasingly subject to corrosion and cracking and can only carry half of its original capacity.
Environmental, indigenous groups also struggling project
Environmental and indigenous groups opposing the bill argue that replacement will accelerate climate change because it will carry Canadian oil, which generates more climate-heavier carbon dioxide during the production process than ordinary oil.
They also say they risk oil spills in the headwaters of the Mississippi River, including crystalline waters where the ojibuas harvest the wild rice.
These groups filed their appeals earlier this week and welcomed the Commerce Department's decision to join them.
The PUC decided this summer to grant a certificate of necessity and route permission for the project. He unanimously reaffirmed approval of the certificate of need last month and route authorization last week, paving the way for opponents to appeal to the Minnesota Court of Appeals.
"Very disappointing and wrong": Enbridge
Enbridge spokeswoman Judi Kellner said in a statement that Dayton's statement was "very disappointing and erroneous" and that its Commerce Department's claims "are not supported by evidence or by Minnesota law."
Kellner said that Enbridge provided multiple detailed forecasts showing that there will be demand for capacity restored at replacement line 3 in the coming years, and Enbridge believes that the courts will uphold PUC's decisions.
While Dayton has appointed all five committee members, the panel operates independently.
The PUC issued a statement saying it agrees with the decision to grant the certificate of necessity, the central issue in appeals this week. Separate requests for route permission are expected later.
"The commission based its decision on this process on applicable law and a full record of evidence after vigorous contribution and participation of litigants and the public," the panel said.
Construction preparations are underway in Minnesota and the small segments in Wisconsin and North Dakota are already in operation.
Enbridge expects to complete work in Canada by July 1 and commission the full replacement pipeline by the end of 2019.