Enbridge gets $14.7M federal refund over Northern Gateway pipeline project

Enbridge is getting a $14.7-million refund on fees it paid Canada's federal energy regulator for a pipeline it won't build.

The Northern Gateway pipeline was supposed to connect Alberta's oilpatch to a port in Kitimat, B.C., but the plan started to come apart when the federal Liberals banned tankers carrying large amounts of crude oil from British Columbia's north coast.

Without tankers to serve the port, there would be no point constructing more than 1,100 kilometres of pipeline to send Alberta bitumen to Kitimat.

Then the Federal Court of Appeal ruled in June 2016 that when the federal government approved the pipeline, it hadn't adequately consulted Indigenous peoples the pipeline would affect. A few months later, in late November, the Liberals decided to revoke the approvals given to let the project get as far as it had.

Enbridge had paid the National Energy Board $14.7 million in regulatory fees to monitor the pipeline's construction and operation. That was about 0.2 per cent of the estimated $7.9-billion cost of building it.

In February, the energy company asked for a refund. Just before Christmas, Prime Minister Justin Trudeau's cabinet agreed, saying in a formal decision that "it is just and reasonable to remit the funds."

"In this case, (the Northern Gateway Pipeline) did not begin construction and the project will never move into operation," the decision says.

The refund will be paid out of the government's general account.

Enbridge says it is still out $373 million in lost costs for the cancelled project. Spokeswoman Tracie Kenyon said Thursday the company has no other outstanding claims for reimbursements or refunds.

The bill banning crude oil tankers from northern B.C. has passed the House of Commons and is in the Senate.

Tankers carrying other fuels are allowed on B.C.'s north coast, and a $40-billion project for a pipeline feeding a liquefied-natural-gas terminal in Kitimat is going ahead.

Crude-oil tankers are also allowed along the province's south coast, including in the waters near Vancouver.

Oil supply is 365,000 barrels above pipeline capacity, NEB says

Western Canada's oil supply is 365,000 barrels above the amount of oil flowing daily in existing pipelines, according to a new report on Western Canadian crude oil supply, markets, and pipeline capacity released Thursday by the National Energy Board (NEB).

Alberta's NDP government estimates the province is losing $80 million a day just due to the difference in the price of Western Canadian Select oil relative to the benchmark West Texas Intermediate (WTI) alone. That gap hit around $50 in late October due to a lack of pipeline capacity to get Alberta oil to market.

In early December, Premier Rachel Notley announced a temporary 8.7 per cent oil production cut, or decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen starting Jan. 1, 2019.

Notley said the cuts will remain in place until the 35 million barrels of processed oil currently in storage is shipped to market, likely by the spring.

The reduction will drop to an average of 95,000 barrels a day until curtailment ends at the end of 2019, when Enbridge's new Line 3 pipeline starts operating.

The Alberta government also expects to acquire locomotives and rail cars by the end of next year to transport 120,000 barrels a day.

The country's crude oil is mainly shipped through pipelines but also moves by rail and truck.

Crude-by-rail exports hit a series of record highs in 2018. In October, crude-by-rail exports hit 327, 229 barrels per day, nearly 2.4 times higher than a year earlier, and up from a record 269,829 barrels per day in September.

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