Energy regulator shocks industry by blocking Enbridge’s ‘open season’ process

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The decisions will cause significant changes to the day-to-day operations of the energy sector

CALGARY – The Canada Energy Regulator surprised the oil industry Friday by blocking a proposed change to how a major oil export system operates, a move that will likely have an effect on the spot price for crude.

The CER found that Enbridge is currently “in a dominant position in the market” and the regulator expressed its “concerns regarding the fairness” about the move to re-contract the line now, when “many potential shippers may have little choice” but to participate. The decision was welcomed by the small- and mid-sized oil and gas producers represented by Explorers and Producers Association of Canada.

After a one-day hearing Wednesday, the CER issued its decision two days later without providing the rationale for the decision. The CER said TC Energy can implement the new system beginning Sept. 30. Nally said that there had previously been divisions within the gas sector about how to fix the issue of extreme volatility in the domestic gas market, where AECO natural gas prices fluctuate between $3 per thousand cubic feet and 10 cents per mcf in the same week.

 

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Regulator to rule on ‘abuse of market power’ complaints against Enbridge’s oil pipeline contractsFriday’s decision will affect future of spot market for domestic oil, but could have major implications for Enbridge
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