CALGARY, Alta. - Pipeline tariffs are set to surge for Canada's oil producers after Enbridge Inc. won a key battle against oil sands companies that have criticized the company for building what they called an unnecessary pipeline to the United States.
The U.S. Federal Energy Regulatory Commission (FERC) ruled against Suncor Energy Inc., which wanted to avoid paying additional tolls for the new $3.7-billion line. Suncor argued that Enbridge should not have built the pipeline, and its argument was supported by a number of other producers.
FERC sided with Enbridge, which wants to raise the tolls on its network of crude pipelines on April 1 in order to pay back the costs of building and operating the line, which runs 1,607 kilometers from Hardisty, Alta., to Superior, Wis.
The ruling means Enbridge tolls will increase by 97 cents, a 33-per-cent hike, over 2009 levels, Enbridge said. About three-quarters of that increase is because of Clipper costs.
That's not enough to significantly impact oil producers' profits, since it's a small percentage of the price of crude. But had Enbridge lost against Suncor, "it would have been a negative for Enbridge earnings," said UBS Securities analyst Chad Friess.
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