Canadian regulator rejects Enbridge plan to sell oil pipeline space

The Canada Energy Regulator on Friday rejected Enbridge Inc’s plan to sell nearly all space on its Mainline oil pipeline under long-term contracts, rather than rationing it on a monthly basis.

The regulator (CER) said in a written ruling that the change would have dramatically changed how shippers gain access to the 70-year-old Mainline, benefiting some with contracts while hurting others who lack them.

“Overall, Western Canadian oil producers could suffer too many negative consequences,” the CER said.

A new proposed framework for setting tolls to move oil would also “excessively favor” those with contracts, the regulator said.

Enbridge planned to sell 90 per cent of space under long-term contracts on the 3 million barrel per day Mainline, Canada’s longest oil pipeline system, which moves oil from Western Canada to refineries in Eastern Canada and the US Midwest.

Enbridge applied for the change in 2019 when demand for the Mainline greatly exceeded its capacity. That congestion has since eased.

Enbridge said it was reviewing the decision and would comment further after completing the review.

A party can appeal the decision to the Federal Court of Appeal within 30 days, if it demonstrates that the CER erred, said CER spokesperson Ruth Anne Beck.