Page 4 - NorthAmOil Week 48 2021

NorthAmOil COMMENTARY NorthAmOil

Enbridge fights pipeline

battles on two fronts

The Canada Energy Regulator rejected pipeline operator

Enbridge’s proposal to change how it allocates capacity on

its Mainline system this week, while a separate dispute over
its Line 5 continues in Michigan

NORTH AMERICA CANADA’S Enbridge is fighting battles related monthly basis as before. However, the plan has
to two of its major pipelines – the Mainline sys- now been rejected by the CER.
WHAT: tem and Line 5. Last week, the Canada Energy In a written ruling, the regulator said the plan
The CER rejected pipeline Regulator (CER) rejected Enbridge’s proposal to would “dramatically” change how shippers gain
operator Enbridge’s change how it allocates capacity on its Mainline access to the Mainline.
proposal to change how it system. Meanwhile, the next stage of a fight with “The commission noted that while certain
allocates capacity on its Michigan Governor Gretchen Whitmer over the companies would benefit from long-term stabil-
Mainline system. fate of Line 5 is unfolding via legal action. ity, others would lose access to the pipeline,” the
regulator stated. “This would not meet the CER
WHY: Mainline plan rejected Act’s common carriage obligation. This means
The regulator ruled Enbridge’s plan to overhaul capacity allocation that a pipeline company must provide service to
that the plan would on the Mainline system has been on the table anyone who wants to ship their products on the
dramatically change how for two years, with the company having applied pipeline, within reason.”
shippers gain access to for the change in 2019. At that time, demand for A new proposed framework for setting tolls to
the Mainline, in some use of the Mainline exceeded its capacity as the move oil on the system would also “excessively”
cases to their detriment. broader Western Canadian pipeline network favour those with contracts, the regulator found.
struggled with takeaway capacity shortages. “Overall, Western Canadian oil producers
WHAT NEXT: The congestion has since eased, first thanks could suffer too many negative consequences,”
Meanwhile, Michigan to the coronavirus (COVID-19) pandemic last the CER said.
Governor Gretchen year, which led to production curtailments, The Mainline has a capacity of 3mn barrels
Whitmer has withdrawn including in Canada’s oil sands, and then thanks per day (bpd) of crude and is Canada’s longest
her federal court case to new capacity, including Enbridge’s Line 3 oil pipeline system, carrying the crude from
over Line 5, and will replacement, entering service. Western Canada to refineries in Eastern Can-
instead concentrate on a Under Enbridge’s Mainline proposal, 90% ada and the US Midwest. It accounts for around
state lawsuit. of the capacity would have been sold under 70% of the total takeaway capacity out of West-
long-term contracts rather than allocated on a ern Canada.

P4 www. NEWSBASE .com Week 48 02•December•2021