The National Energy Board has given Enbridge Inc. the all-clear to open its reversed Line 9 pipeline, providing western oil producers with direct access to Quebec refineries for the first time in 17 years.
The approval came as the oil sands industry and its governmental backers won a long-fought battle in Europe to avoid punitive treatment on fuel regulations aimed reducing carbon emissions, a victory that could allow for Canadian crude exports to the continent.
The energy regulator approved the Line 9 reversal last March, but then held up the project citing deficiencies in Enbridge’s safety plan. It said Friday that the number and placement of emergency shut-off valves on the 300,000-barrel-a-day pipeline is now “appropriate.”
The pipeline reversal provides much-needed access for western crude producers, though the two refineries in Quebec – Suncor Energy Inc.’s plant in Montreal and Valero Energy Corp.’s one near Quebec City – can process only limited quantities of heavy, oil sands bitumen. Enbridge spokesman Graham White said the company supports the safety and operating conditions imposed by the regulator, and will fulfill them. It expects the mixture of light crude from Canada and the U.S. will begin flowing to Quebec refineries by this spring.
With crude prices at depressed levels, producers are particularly eager to drive down their transportation costs and access new markets.
Enbridge has succeeded in pushing forward with the Line 9 project while many other pipeline proposals remain stalled, notably the Keystone XL project in the U.S. and Enbridge’s Northern Gateway in British Columbia.
TransCanada Corp. is also facing growing challenges on its proposed Energy East pipeline, which would carry 1.1-million barrels a day of crude to eastern refineries and export terminals.
In Ontario, First Nations want the regulatory process halted until they can be more fully consulted, while in Quebec, the provincial government has raised concerns about the potential impact on endangered beluga whales from a planned export terminal on the St. Lawrence River at Cacouna. Energy East president Francois Poirier said Friday the company is studying its options with regard to the Quebec terminal, and will announce by the end of March whether it will proceed at Cacouna, move it to another location on the St. Lawrence, or drop the plan for a Quebec terminal altogether.
With Energy East and Line 9, western producers are targeting not only eastern Canadian refineries but U.S., European and Asian markets. The Canadian industry won a victory in Europe on Friday when its parliament effectively passed an emission-reducing fuel quality directive which had been amended to reflect concerns raised in Canada over its proposed punitive treatment of oil sands imports.
The European Union decision “opens the door further for Canadian companies to compete on a level playing field for new markets in Europe and abroad,” said Tim McMillan, president of the Canadian Association of Petroleum Producers.
Line 9 originally ran from west to east but was reversed in 1998 to give access to imported crude for Ontario refineries and the petrochemical centre at Sarnia. Enbridge has already reversed the Ontario portion of Line 9 to bring western crude to Imperial Oil Ltd.’s refinery at Nanticoke.Report Typo/Error
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