MONTREAL _ A pipeline operator has begun formally arguing its case to send oilsands crude flowing from the Alberta oilpatch to Eastern Canada, in a controversial proposal to reverse the flow on one of its lines.
The National Energy Board hearings into the proposal by
Enbridge Inc. (
TSX: T.ENB,
Stock Forum) have kicked off at a time when Canada is struggling to find ways to ship Alberta bitumen to foreign markets amid stiff opposition fuelled by safety and environmental concerns.
Representatives for Enbridge made their case in Montreal as hearings began Tuesday, insisting the plan would benefit Canadians across the country.
Enbridge counsel Douglas Crowther opened by saying the project ``would redeploy an existing pipeline in a safe, efficient and economical way to the benefit of refineries in Quebec, oil producers in Western Canada and the broader Canadian public interest.''
The Calgary-based company hopes to reverse the flow and increase the capacity of its existing Line 9, an initiative that would pump oilsands crude across southern Ontario and Quebec.
The project would uncork an important outlet for Alberta oil producers as they search for ways to get their product to market.
Prime Minister Stephen Harper has been engaged in an increasingly bitter dispute with U.S. President Barack Obama over the proposed Keystone XL pipeline by
TransCanada Corp. (
TSX: T.TRP,
Stock Forum) to send oilpatch crude south to the Gulf of Mexico.
Ottawa is also facing significant resistance within Canada to Enbridge's Northern Gateway proposal to ship bitumen through the B.C. backcountry to tankers on the Pacific coast.
In the face of such bottlenecks, use of rail has skyrocketed in transporting oil.
The National Energy Board hearings on Line 9, which runs from Sarnia, Ont., to Montreal, are occurring in a climate where alternative means of transporting oil face significant scrutiny, particularly following last summer's rail disaster in Quebec.
The Line 9 hearings, which will feature presentations from around 40 interested parties on different sides of the debate, will continue over the next few days in Montreal before moving to Toronto next week. The panel has up to three months to deliberate and is expected to reach a decision by early 2014, at the latest.
This would be the second change in direction for Enbridge's line.
Oil initially flowed east from Sarnia to Montreal through the four-decade-old Line 9 but, since market conditions changed in the 1990s, imported crude has been piped in the other direction.
The new plan calls for oil to be pumped eastward once again along the 831-kilometre-long stretch of pipeline and for its daily capacity to be increased to 300,000 barrels, up from the current 240,000 barrels.
The company argues the Line 9 project would provide refineries in Ontario and Quebec with a more secure oil supply from Western Canada at a lower price than foreign product they currently buy. The reversal, Enbridge says, would create jobs and boost provincial revenues.