Enbridge Inc. (ENB), Canada’s largest pipeline owner, won regulatory approval to reverse and expand a portion of its Line 9 system, allowing for more shipments of western crude oil to refineries in Quebec.
The approval is subject to 30 conditions, such as requirements that Enbridge take steps to ensure the integrity of the pipeline and guard against spills, the National Energy Board said in a statement today.
The reversal of the 639-kilometer (397-mile) section, known as Line 9B, is part of Enbridge’s effort to provide refineries in eastern Canada with lower-priced North American crude from Alberta’s oil sands and North Dakota’s Bakken. The line from Westover, Ontario, to Montreal currently is capable of sending about 240,000 barrels a day of overseas oil west.
Refiners along the Atlantic Coast have lost money as they pay more than their U.S. competitors for crude, much of which they get from the North Sea. Western Canada Select, a heavy oil blend, traded at $77.52 a barrel today while Brent oil, an international benchmark price tied to the U.K.’s North Sea production, cost $107.88. West Texas Intermediate, the U.S. benchmark, traded at $100.86.
The reversal is part of C$36 billion ($33 billion) in spending Calgary-based Enbridge has planned for the coming years, including expansion of oil pipelines across the continent, such as the Northern Gateway.
Enbridge also won permission today to expand part of the line’s capacity to 300,000 barrels a day. The pipeline was reversed once before, in 1998, to give refiners access to cheaper foreign oil supplies.
Concern about potential spills from the pipeline prompted one group to call for civil disobedience in response to the government’s decision.
“With an over 90 percent risk of rupture, a spill from Line 9 is a matter of where and when, not if it will happen,” Shirley Ceravolo of activist group Rising Tide Toronto said in an e-mail today. “Rising Tide is calling for civil disobedience to show opposition to Line 9 and tar sands expansion.”
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