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Enbridge Inc. will consider several options for its Mainline crude pipeline system, including a modified version of its previous toll agreement, after Canada’s energy regulator denied the company’s bid to convert the system to long-term contracts.

The Commission of the Canada Energy Regulator, or CER, made its decision last Friday almost two years after Enbridge filed a proposal that would have seen oil companies enter into long-term agreements for 90 per cent of Mainline’s capacity, leaving 10 per cent available for spot capacity.

Currently, 100 per cent of the pipeline is open access. The commission said Western Canadian oil producers “could suffer too many negative consequences” should the change go ahead.

In a statement Sunday, Enbridge said it would reach out to companies that use Mainline – and non-shippers – for input on alternatives for the pipeline’s commercial framework. It will also include industry input on whether there’s any appetite to expand the pipeline in the future.

Mainline is the longest oil pipeline in Canada, stretching from Alberta to the U.S. border in Manitoba, and re-entering Canada in Ontario. It connects Canadian producers to refineries and other pipelines in Canada and the United States.

It also ships the most petroleum products of any Canadian pipeline, at about three million barrels a day – around 70 per cent of Canada’s total ability to ship oil from Western Canada to market.

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Enbridge said Sunday it has heard “significant concerns from industry over continuing Mainline apportionment, due to growing Western Canadian production and lack of sufficient egress.”

However, it said there seems to be no consensus on what a new commercial structure should look like; some shippers want contracting, others would prefer to maintain the status quo.

Mainline’s most recent tolling agreement expired in June. Interim tolls will remain in place until the CER approves a new agreement. Enbridge said it would likely begin consultations with industry in the coming weeks, but doesn’t expect a CER decision until 2023.

By Monday afternoon, Enbridge shares on the Toronto Stock Exchange had dipped by close to 3.5 per cent following Friday’s decision before closing down 2.11 per cent. The company said Mainline’s eventual alternative commercial model “will be manageable,” and is not expected to affect its financial results.

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