In a victory for Line 3 oil pipeline opponents, the Minnesota Court of Appeals on Monday reversed the state Public Utilities Commission's approval of the Line 3 replacement project's environmental review, saying it didn't adequately address the potential impact of a spill in the Lake Superior watershed.

Last June, the PUC approved Enbridge Energy's plan to replace its aging Line 3 oil pipeline, which has been transporting oil across northern Minnesota from Alberta, Canada, since the 1960s.

As part of that process, the PUC approved an environmental impact statement — a review of potential impacts the project might have on the surrounding environment.

The environmental groups Friends of the Headwaters and Honor the Earth, as well as the Mille Lacs Band of Ojibwe, the White Earth Band of Ojibwe and the Red Lake Band of Chippewa Indians appealed the PUC's decision to approve that environmental impact statement. They argued that the environmental review of the Line 3 project did not adequately analyze the potential impacts of oil spills along the route or the potential harm to tribal resources.

At the same time that it rejected the review's treatment of a spill near Lake Superior, the court also upheld the majority of the more than 3,000-page environmental impact statement. It also rejected most of the arguments made by pipeline opponents, including their contention that the study didn't sufficiently take into account the climate impacts of the pipeline, and didn't adequately analyze impacts on tribal cultural resources.

Supporters of the project say they're heartened that the court upheld the majority of the environmental study's findings.

"While no one likes further uncertainty, what's important is the court reaffirmed on numerous counts that the [Public Utilities] Commission acted correctly and produced a final [environmental impact statement]," said Kevin Pranis, marketing manager for the the Laborers International Union of North America.

Ben, a Line 3 pipeline opponent who only wants his first name to be used, hangs from a tripod in the middle of a downtown St. Paul street, just outside the state PUC offices. Evan Frost | MPR News 2018

"They rejected unanimously nearly all the arguments that were made against it," he said.

Pipeline opponents' reactions to the ruling were relatively muted. The opposition groups involved in the case say they are considering filing appeals to the Minnesota Supreme Court on the arguments that the appeals court rejected.

"We are grateful to the court for recognizing the need to protect Lake Superior," said Winona LaDuke, executive director of Honor the Earth, one of the plaintiffs in the case. "But let us protect all water ... We will seriously consider an appeal of a decision that will only worsen the impacts of climate change in Minnesota."

Enbridge could also appeal the decision to the Minnesota Supreme Court.

The environmental impact statement will likely be sent back to the state Public Utilities Commission to determine how to proceed. The court's ruling throws into question the PUC's approval last year of a certificate of need and route for the pipeline, because the findings of the now-rejected environmental impact statement factored significantly into both.

The PUC declined to comment on the court's decision or on the next steps in the process.

Scott Strand, an attorney representing Friends of the Headwaters, said the PUC would likely ask the Minnesota Department of Commerce to complete the additional work on the environmental impact statement. The department prepared the initial analysis for the commission.

It will be up to the PUC to determine that process moving forward, but it would likely include a scoping period to determine what should be included in the new environmental analysis, as well as an opportunity for public comment on both a draft and final analysis.

"We certainly think it needs to be a robust process that includes opportunities for public comment," said Strand.

If the PUC were to approve a new, supplemental environmental impact statement, opponents would again have an opportunity to appeal.

In addition, several groups — including the state Department of Commerce — have filed separate challenges seeking to overturn the PUC's approval of a certificate of need for Line 3. Oral arguments in that case before the Minnesota Court of Appeals are expected this fall.

Appeals have also been filed to block the commission's granting of a route permit for the pipeline.

"The fight to stop Line 3 is far from over," said Joe Plumer, attorney for the Red Lake and White Earth Ojibwe bands.

Labor unions, industry groups and many local officials have supported the project, saying it would create thousands of construction jobs and generate millions of dollars in property tax revenue for the northern Minnesota counties the new pipeline will cross. They also argue that the new line would be safer than the current Line 3 because it would replace an existing, aging pipeline.

Supporters and opponents of the Line 3 oil pipeline line up outside of the Public Utilities Commission in St. Paul. Evan Frost | MPR News 2018

"The Line 3 replacement has been subject to unprecedented review, and I hope will proceed without further interference once the environmental impact statement is finalized," state House Minority Leader Kurt Daudt, R-Crown, said in a statement Monday.

Enbridge has said that it plans to begin construction on the new pipeline in 2020, and have it in operation sometime in the second half of that year.

It's unclear what impact Monday's ruling will have on that timeline, if any. An addition to the regulatory process could take another six months or longer. And the company still needs several state and federal permits before it can break ground on the project in Minnesota.