Friday, March 22, 2013

US Regulatory Body Denies Enbridge Permit for the Sandpiper Project; A Huge Win For Rail

Link here to The Globe and Mail:
The U.S. Federal Energy Regulatory Commission has blocked plans by Enbridge Inc. for a massive new pipeline to carry oil out of North Dakota’s fast-growing Bakken field.
In a decision released Friday, FERC denied an application by Enbridge to set tolls, or costs to move oil, through its $2.5-billion (U.S.) Sandpiper project. By blocking those tolls, it has at best delayed the project, as Enbridge will now have to present an alternative way to pay for the large new pipeline, which would carry oil 603 kilometres from North Dakota to Minnesota.
And so it goes. 
A number of companies involved in moving oil out of the Bakken had loudly protested Enbridge’s proposed tolls. EnWest Marketing LLC told FERC that “the amount of [Sandpiper] capacity was not necessary in view of rail and pipeline alternatives.” Another protestor, WPX Energy Marketing LLC, accused Enbridge of staging “an attempt to double the price of transportation while receiving a risk-free guaranteed rate of return.”
Others said the Enbridge proposal would force shippers to shoulder the full extent of increased costs if Sandpiper is not filled to capacity. They also argued that Enbridge sought to pay off the pipeline in 15 years instead of the standard 30 and, they said, few supported the project.