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Enbridge gets rough ride on pipeline Company runs into new resolve from National Energy Board, questions on placement of valves in proposed re-direction of Line 9B Gary Park For Petroleum News
If Enbridge’s initial push to send more western crude - oil sands bitumen and Bakken production - into Canada’s major refinery centers were seen as a simple dress rehearsal for TransCanada’s Energy East project it’s time to rethink.
When Enbridge announced its intention to “re-reverse” the flow direction of Line 9B to pump 300,000 barrels per day into Ontario and Quebec and start weaning Canada of its crude imports, the C$700 million undertaking was quickly placed in the “easy peasy lemon squeezy” category by most observers.
That may have underestimated what could be a new resolve by Canada’s National Energy Board to reinforce its role in protecting the environment.
Line 9B was supposed to have been in business any time soon.
Now Enbridge executives won’t even take a stab at setting an in-service date.
“It’s clear from our second look that we should have done a much better job of explaining our approach to the placement of valves along the route,” a chagrined Chief Executive Officer Al Monaco told analysts. “And the NEB, I think, was right to question us on it.”
The matter is “essentially in the NEB shop. We’re ready to roll,” he said.
But when, and if the line can start operations depends on whether the NEB accepts Enbridge’s plan to add 15 remote-control valves to the system, raising the total to 60 to ensure protection of 320 water crossings.
Monaco said Enbridge believes it has “gone beyond what’s required ... because we know that’s what the public expects of us.”
Two bruising lessons That’s a long way from the old days when pipeline companies simply said “trust us,” and the NEB often did, while the public paid little or no attention.
If nothing else Enbridge has absorbed two bruising lessons from its benchmark pipeline rupture which spewed 20,000 barrels of crude into a tributary of the Kalamazoo River in Michigan and its inability to either win over or stifle opponents to Northern Gateway.
What seemed to startle Enbridge was the tone of a letter from NEB secretary Sheri Young telling the company that the federal regulator was “not persuaded” the conditions of an initial approval in March had been met.
The NEB said only that permission to start filling the pipeline will be delayed for several months because Enbridge failed to properly explain its criteria for identifying a “major water crossing” and only installed valves at six of the 104 it did indentify.
Enbridge hopes it can satisfactorily explain its rationale for determining a major water crossing.
New resolve The apparent new resolve in the NEB was apparent in August when it summoned Plains Midstream Canada to a meeting after high-profile spills in Alberta in 2011 and 2012.
“Our objective with the Line 9B project has always been to meet, if not exceed, regulatory requirements and to assure our stakeholders of our commitment to operate our pipeline safely and protect the environment,” Monaco said.
“We have responded to the board’s request for clarification of our approach and additional information. We continue to work with the board to understand and respond to its questions and to meet its requirements.”
What Enbridge and other pipeline companies must also have grasped is that the NEB will no longer accept their word on matters of public stewardship.
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