- Associated Press - Friday, August 21, 2020

MINNEAPOLIS (AP) - A member of Gov. Tim Walz’s Cabinet faced sharp questioning at a confirmation hearing Friday for approving an appeal over a controversial pipeline project in a dispute that could cost him his job.

Commerce Commissioner Steve Kelley is under fire because his agency on Wednesday appealed a decision by the independent Public Utilities Commission to approve Enbridge Energy’s plan to replace its aging Line 3 crude oil pipeline across northern Minnesota. It was the second time that the PUC had approved the project, and the agency’s third appeal in an approval process that began more than five years ago.

The plan is popular among Republicans who control the Senate and construction unions that have previously backed the Democratic governor. Environmental and tribal groups oppose the project, citing climate change and spill risks.

Senate Republicans essentially fired Labor and Industry Commissioner Nancy Leppink last week amid a dispute over how Walz uses emergency powers to respond to the coronavirus pandemic, and they’re threatening the same fate for Kelley over Line 3. Other potential targets are Minnesota Pollution Control Agency Commissioner Laura Bishop, who will get a hearing on Monday, and PUC Commissioner Joe Sullivan, who noted at his hearing Tuesday that he voted for Line 3.

The commerce committee chairman, GOP Sen. Gary Dahms, of Redwood Falls, noted that the senators couldn’t vote on Kelley on Friday because the Legislature isn’t in session. But he predicted that if they could have voted, they would have forwarded his nomination without a recommendation, a potentially ominous sign.

Kelley defended the appeal, saying that as commerce commissioner he’s obligated to enforce statues that the Legislature has passed. He reiterated that the department does not believe Enbridge met a statutory requirement for producing a long-range oil demand forecast - a complex legal issue that remains in dispute - to help determine if a project is needed.

“Forces in society have lined things up, regrettably, so that this comes across as a conflict between environmental advocates and working people who are looking for jobs,” Kelley testified. “The statute does not take that side - either side of that. The statute that we’re looking at is not related to the environment and it’s not related to jobs.”

The PUC concluded both times when it approved the project that Calgary, Alberta-based Enbridge met all the legal requirements. Republican Sen. David Osmek, of Mound, argued that the PUC got it right. He said Kelley’s position “bother’s me to no end, and it makes me question whether you are in a position that you should be within the administration.”

Democratic Sen. Scott Dibble, of Minneapolis, defended Kelley as “an amazing, incredibly qualified commissioner.” He denounced the proceedings as a “kangaroo hearing” with “curated questions” and little chance for Democrats to weigh in.

“If his confirmation doesn’t stand, we’ll know that this decision was made somewhere else for other reasons,” Dibble said.

Republican senators also questioned Kelley about his department’s implementation of recent state laws governing pharmacy benefit managers and workers compensation for essential workers who contract COVID-19, and how it has required insurance companies to report to the state on claims arising from the unrest that followed George Floyd’s death. They could use those issues to frame a broader case against Kelley based on his job performance.

The Senate can’t vote on Kelley’s or additional confirmations unless Walz calls the Legislature back for another special session. The governor has called one each time he has extended his emergency powers for the pandemic by 30-day increments, so the next chance would come in mid-September. Up until now, he has chosen to interpret the state’s emergency powers statute as requiring a special session to give lawmakers a chance to rescind his orders.

But Walz has raised the possibility - most recently right after Leppink’s ouster - that he might not really need to keep calling lawmakers back. He said there’s “very much a gray area” in the law. That could shield his appointees from being picked off one by one until next year - when Walz and other Democrats hope to control the Senate.

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