CALGARY – The National Energy Board said Friday it has approved Enbridge Inc.’s plan to reverse the flow of part of an oil pipeline in southern Ontario.
The federal watchdog says it has imposed 15 conditions on the $16.9-million project, mainly having to do with pipeline integrity.
Line 9 currently flows from Montreal to Sarnia, Ont., but Enbridge (TSX:ENB) wants to reconfigured it so it flows from west to east.
Refiners in central and eastern Canada want to use cheaper Canadian crude instead of pricker oil imported by tanker from overseas.
The NEB approval pertains to the section of pipe between Sarnia, Ont., and West over, Ont., near Hamilton.
In May the board held hearings where it heard concerns from the public about possible spills from the pipeline.
Labour Minister Lisa Pratt, a former natural resources minister, said the NEB decision is “quite important” as it helps improve pipeline access to Canada’s coasts and customers in the U.S.
Raitt said the reversal reflects what customers want and need and keeps Canada’s oil flowing in a way that is most economic, adding that customers on the east coast will be able to receive cheaper crude from North America rather than have to import it from abroad.
“Energy is a matter of national importance and the government welcomes efforts to better utilize our energy assets for the benefit of Canadians from coast to coast to coast,”
“So in this respect the expansion and the diversification of our energy markets is one of our priorities.”
Enbridge rival TransCanada Corp. (TSX:TRP) is also working on a plan to ship western Canadian crude east. It’s looking at converting its gas mainline, which is running part-empty, to gas service. It could ship between 400,000 and 900,000 barrels per day of oil, depending on customer demand.
Two years ago, an Enbridge pipeline in southern Michigan ruptured and spilled some three million litres of crude into wetlands, a creek and the Kalamazoo River.
The river was recently re-opened for recreational use.
A report by the National Transportation Safety Board earlier this month likened Enbridge’s handling of the spill to that of the “Keystone Kops.”
Enbridge announced late Friday that it had contained a spill from a pipeline running through Grand Marsh, Wisconsin.
A news release said the spill of roughly 1200 barrels was confined to a field that is part of the pipeline right-of-way.
“Enbridge is treating this situation as a top priority,” said Richard Adams, vice president of Enbridge’s U.S. operations.
“Our immediate focus is on keeping our workers and the public safe as we work to remove the oil and clean up the site,” he said.
Adams said the cause of the spill was being investigated and that the pipeline had been shutdown until further notice.
The line, built in 1998, can move up to 317,600 barrels per day, and is used primarily to transport light crude oil to Chicago area refineries.
Enbridge wants to build a pipeline between Alberta and the West Coast so that Canadian crude can be shipped overseas to Asia by tanker and garner a higher price. The Northern Gateway proposal met stiff resistance from B.C. First Nations groups and others.
The company recently announced a slate of safety improvements, such as thicker pipe and better monitoring, that pushed the project’s pricetag by $500 million to $6 billion.
Northern Gateway is at the centre of an argument between B.C. Premier Christy Clark and Alberta Premier Alison Redford over how to fairly divvy up the project’s risks and rewards.