Page 15 - NorthAmOil Week 02 2021

NorthAmOil PIPELINES & TRANSPORT NorthAmOil

Enbridge battles over

pipelines on two

different fronts

NORTH AMERICA CANADA’S Enbridge has been battling over two
separate issues related to its pipelines recently. In
Canada, the company has come under fire from
the former chairman of the National Energy
Board (NEB), Roland Priddle, over an applica-
tion to change how capacity is allocated on its
Mainline system. Separately, in the US, Enbridge
is embroiled in a fight with the State of Michigan
over its twin Line 5 pipelines, which run through
the Straits of Mackinac, and has said it will defy
an order to shut down the pipelines.
Enbridge’s push to overhaul how its Mainline
oil pipeline system operates comes because it
wants “to retain Mainline volumes and reduce
its long-term volume risk” in the face of mount-
ing competition from new pipeline projects. For
the past 70 years, all of the capacity on the Main-
line – over 3mn barrels per day (bpd) – has been
available for spot shipments on a monthly basis.
Now, however, Enbridge is proposing to shift to
90% long-term contracts for shippers wishing to
use the system, which carries oil from Alberta to
refineries in the US Midwest, as well as Ontario
and Quebec. the ageing twin pipelines in the Straits of Mack-
The proposal has drawn the ire of some of inac, building a new tunnel to house them under
the oil companies using the system, with whom the Straits instead. However, Michigan Gover-
Enbridge has already been engaged in a fight nor Gretchen Whitmer ordered Enbridge to
over the planned changes for some time. shut down the pipelines altogether, citing safety
Indeed, Priddle’s criticism came in a filing on concerns and alleged violations of the terms on
behalf of a group of large Canadian oil compa- which the company operates in the Straits.
nies, reported by the Financial Post to include Enbridge was given 180 days – until May 12 –
Enbridge is Canadian Natural Resources Ltd (CNRL) and to shut down the pipelines. However, Enbridge’s
MEG Energy. He now works as a consultant president for liquids pipelines, Vern Yu, said in a
proposing to shift on pipeline issues. Priddle filed evidence last letter this week that the company was challeng-
to 90% long-term month before the NEB’s successor, the Canada ing the order in the US District Court. Yu gave
Energy Regulator (CER), and argued that there a point-by-point-response to the state’s termi-
contracts for was “absolutely no justification” for approving nation notice, arguing that Michigan lacks the
authority to terminate the easement that allows it
Enbridge’s application.
“The support that Enbridge has marshalled to operate in the Straits. He added that Enbridge
shippers wishing for the application does not represent the Cana- would not close Line 5 until a replacement was
to use the dian public interest: it is biased in favour of US in service.
Mainline system. refineries and against the Canadian crude oil Line 5 is part of Enbridge’s Lakehead net-
producing interests, which had previously been work, which carries oil and liquids from West-
the only or the dominant counterparty in settle- ern Canada to refineries in the US and Ontario.
ment negotiations,” he said in his submission. The pipeline moves about 23mn gallons (87mn
This was a reference to the fact that not all ship- litres) per day and Enbridge says that the section
pers on the Mainline oppose Enbridge’s plan. that passes through the Straits of Mackinac has
Enbridge is expected to respond to opponents never leaked despite the concerns raised recently
including Priddle in CER filings due on Febru- over its safety.
ary 1, after which the regulator is anticipated to “The governor’s notice is actually based
make a decision on the pipeline firm’s proposal. on inaccurate and outdated information that
South of the border, meanwhile, Enbridge’s ignores the current condition of the dual pipe-
fight with Michigan appears no closer to being lines,” Enbridge’s vice-president of US opera-
resolved. The company is proposing to replace tions, Mike Koby, told ABC News.™

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