October 17, 2011 / 9:24 PM / in 6 years

Regulator demands details on Enbridge line reversal

CALGARY, Alberta (Reuters) - Canada's energy regulator has asked Enbridge Inc to explain whether a proposed pipeline reversal is part of a bigger plan to export crude, a concern expressed by environmental groups seeking a more thorough review of the project.

The National Energy Board has asked Enbridge to provide more details of its Line 9 Phase 1 project, the initial part of a plan to reverse the flow of its Montreal to Sarnia, Ontario, oil pipeline to allow Quebec and Atlantic Canadian refineries access to western crude.

The board, which must decide on the level of review the project is subject to, made the requests at the end of an extended public comment period that attracted nearly 100 submissions from landowners, environmentalists, aboriginal groups and oil companies.

In a letter, the NEB asked Enbridge to explain by October 21 the relationship between Phase 1, future stages and a previously proposed plan called Trailbreaker, which would have moved oil sands-derived crude to the U.S. Atlantic Seaboard.

The NEB also wants to know if any of the phases is dependent on another, as well as the current status of the Trailbreaker project, which Enbridge floated three years ago, regulatory documents show.

It noted that many of the comment letters suggested possible linkages between Phrase 1 and Trailbreaker.

The C$17 million ($16.7 million) first phase, which includes a reversal of flow between Sarnia and Westover, Ontario, has become the latest target for environmental groups opposed to development of the Alberta oil sands and infrastructure aimed at moving the crude to more markets.

Enbridge wants the project vetted under a section of the NEB Act allowing for a less intensive review, saying the first phase has minimal land disturbance and no adverse environmental or socioeconomic impact.

Green groups, led by Environmental Defense, want the board to deny the exemption from a full review, arguing that Phase 1 is just the beginning of a resurrection of Trailbreaker, which would have included a full reversal of the 240,000 barrel a day Line 9, as well as a pipeline that runs to Montreal from Portland, Maine, allowing oil to be loaded onto tankers.

"This is a good step," said Gillian McEachern, climate and energy program manager for Environmental Defense.

"It's forcing some more transparency and accountability about what the goal of the project is - and the game changes if you're looking at the impacts of the entire project that was Trailbreaker versus the pipeline reversal in Ontario."

In its letter, the NEB said it wants Enbridge to provide additional details "regarding the purpose of the project as it relates to business demands of shippers and refiners, including how they would benefit."

Earlier this month, Enbridge Chief Executive Pat Daniel told Reuters that his company is seeking a deal to reverse the flow of the Portland pipeline due to demand for light crude from the Bakken region among Philadelphia-area refineries.

Reporting by Jeffrey Jones; editing by Rob Wilson

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