Canadian Mainline to continue to offer 100 per cent uncommitted capacity to all shippers
The Commission of the Canada Energy Regulator did not approve Enbridge’s application to enter into long-term contracts on the Canadian Mainline pipeline for 90 per cent of the system’s capacity. The commission noted that the proposal would have caused a foundational shift in oil transportation, leaving less than 20 per cent of total pipeline capacity out of Western Canada for monthly oil shipments.
The Mainline is Canada’s largest oil pipeline system, moving over three million barrels per day of petroleum products to market. The pipeline provides approximately 70 per cent of the total oil pipeline transportation capacity out of Western Canada. In part, several parties supported the application because the pipeline’s demand has exceeded available capacity over the past few years. Enbridge highlighted that firm contracts would give them more predictable access to the pipeline.
Others, including many Canadian oil producers, argued that the proposed change would worsen the existing capacity constraints and have other negative consequences such as lower oil prices.
After considering the evidence, the commission found that the proposal would dramatically change access to the Mainline. The commission noted that while certain companies would benefit from long-term stability, others would lose access to the pipeline. This would not meet the CER Act’s common carriage obligation. This means that a pipeline company must provide service to anyone who wants to ship their products on the pipeline, within reason.
The Canadian Mainline will continue to operate on existing interim tolls.
- Enbridge filed the Canadian Mainline Contracting Application on December 19, 2019.
- This is the first time a major, existing Canadian oil pipeline applied to switch a large portion of its capacity to long-term contracts, in the absence of a major proposed project.
- Along with Enbridge, 39 intervenors participated, and 28 parties sent letters of comment. Participants included refiners, producers, and integrated companies from Canada and the U.S and the Government of Saskatchewan.
- The Canadian Mainline, which includes approximately 6,600 km of CER-regulated assets, originates in Edmonton, Alberta. It extends east across the Prairies and crosses the Canada-US border near Gretna, Manitoba, where it joins the Lakehead System.
- In addition to protecting the safety of Canadians and the environment, the CER has been tasked with building a regulatory system that enhances Canada’s global competitiveness.
The Canada Energy Regulator (CER) works to keep energy moving safely across the country. We review energy development projects and share energy information, all while enforcing some of the strictest safety and environmental standards in the world. To find out how the CER is working for you, visit us online or connect on social media