A Canadian pipeline company's plan to add a surcharge to all North Dakota oil piped into Minnesota has drawn objections from key energy interests.
Two Twin Cities oil refineries and others are protesting Enbridge Energy's plan to add the surcharge, which would pay for an additional $2.5 billion pipeline to carry even more oil.
Calgary, Alberta-based Enbridge this month proposed the commercial terms for the 618-mile "Sandpiper" pipeline to bring more oil from western North Dakota, across Minnesota to a terminal in Superior, Wis.
But the owners of refineries in Rosemount and St. Paul Park that rely partly on North Dakota crude oil have told federal regulators that they oppose the deal. The deadline for comments to the Federal Energy Regulatory Commission was Tuesday.
The major complaint: All oil shipped from the Bakken fields into Minnesota would pay a $1.45 per barrel surcharge, even if it didn't travel on the new line to Superior. Another concern is that the new pipeline -- designed to eliminate a bottleneck in northern Minnesota -- may be not be fully utilized if other rail and pipeline projects are built in North Dakota.
"Flint Hills has never opposed paying for its fair share of the cost of expansion," the owner of the Rosemount refinery said in its filing. "But Flint Hills does oppose being forced to insulate the pipeline from the risk of underutilization of new capacity designed largely ... to serve new markets connected to other pipelines."
The St. Paul Park Refinery, owned by Northern Tier Energy, alleged that Enbridge's existing North Dakota pipeline already is making too much money -- 18 percent over the cost of service. It also said Enbridge's surcharge is based on an "unjustified" 15-year accelerated depreciation and would "aggravate the harm" to interests such as the refinery.
Northern Tier also has 166 company-operated and 67 franchised SuperAmerica stores, which it acquired with the refinery from Marathon Oil Corp. in 2010. Northern Tier and Flint Hills jointly own a pipeline from Clearbrook to the Twin Cities that is the major source of their crude oil.