Enbridge Inc., the largest shipper of Canadian crude to the U.S., is seeking to limit liability in case the oil in its system is deemed unexportable.
The Calgary, Alberta-based company added “whether shipper’s crude petroleum is eligible for export” to a list of things it isn’t liable for unless caused by Enbridge’s direct negligence, according to tariff filings with the Federal Energy Regulatory Commission.
“What we are doing is disclaiming remote, but potential liability that could arise as a result of our shippers’ downstream arrangements over which we have no control,” Graham White, a spokesman for the company, said by e-mail.
The tariff filings come as companies including Valero Energy Corp. have received licenses to re-export foreign crude from the U.S. Commerce Department. It approved 105 oil-export licenses from October through April, the majority of which were for re-exports. The Department approved 66 such licenses in 2012.
Shippers must prove foreign oil “has not been commingled with oil of U.S. origin” to meet re-export requirements under federal law.
Commingled Oil
“Carrier shall not be liable to shipper for changes in gravity, exportability or quality of shipper’s crude petroleum which may occur from commingling or intermixing shipper’s crude petroleum with other crude petroleum in the same common stream while in transit,” Enbridge said in its tariff filing for a storage facility in Patoka, Illinois.
The company also submitted filings for its Toledo pipeline, which carries 100,000 barrels of oil a day to Oregon, Ohio, from Stockbridge, Michigan, and its Ozark pipeline, which can move 215,000 barrels a day to Wood River, Illinois, from Cushing, Oklahoma.
“We have procedures in place to minimize commingling of Canadian and U.S.-domestic crude oil for quality assurance and customs purposes,” White said. “Canadian- and U.S.-originated crude oils are kept in separate tanks and are batched to maintain segregation.”
Other Pipelines
Enbridge’s Mainline system can bring 2.5 million barrels of petroleum a day to the U.S. from Alberta, home to much of Canada’s crude production and oil sands mining operations. TransCanada Corp., Kinder Morgan Inc. and Spectra Energy Partners LP also operate major pipelines out of the region.
Spectra’s Express-Platte system, which transports up to 280,000 barrels a day from Alberta to various locations in the Rocky Mountains and Midwest, might address exportability in its tariffs in the future, Houston-based spokesman Phil West said by e-mail.
Kinder Morgan’s Trans Mountain pipeline, which can carry 300,000 barrels a day of crude and products from Alberta to the Pacific coasts of Canada and the U.S., hasn’t received any requests from shippers to verify the exportability of Canadian crude from U.S. ports, Andy Galarnyk, a Calgary-based spokesman, said. Shippers on the line have access to waterborne markets via the Westridge Marine Terminal in Vancouver.
TransCanada’s Keystone pipeline, which can carry up to 590,000 barrels a day, tells shippers they must maintain their own documentation to comply with laws and regulations, Shawn Howard, a Calgary-based spokesman, said by e-mail.
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