Two Minnesota Refineries Object to Pipeline SurchargeTwo Minnesota oil refineries say they shouldn't have to help pay for a pipeline from North Dakota to Wisconsin that they won't use.
MINNEAPOLIS — Two Minnesota oil refineries say they shouldn't have to help pay for a pipeline from North Dakota to Wisconsin that they won't use.
Calgary, Alberta-based Enbridge Energy this month proposed a surcharge to finance the $2.5 billion, 618-mile "Sandpiper" pipeline, which will carry more oil from the Bakken fields in western North Dakota across Minnesota to a terminal in Superior, Wis.
Flint Hills and Northern Tier Energy, the respective owners of refineries in Rosemount and St. Paul Park that rely partly on North Dakota crude oil, have told federal regulators they oppose the deal. Their major complaint is 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, the Star Tribune reported Thursday.
Enbridge says all oil shippers stand to gain because the project will end the bottleneck on an existing North Dakota-Minnesota pipeline. Fifteen other shippers have signed letters in support of the project.
Flint Hills contended in its filing that the new pipeline may be not be fully utilized if other rail and pipeline projects are built in North Dakota, and that it opposed being forced to insulate the pipeline from the financial risk of underutilization.
Northern Tier Energy said in its filing that Enbridge's existing North Dakota pipeline already is making too much money at 18 percent over the cost of service.
North Dakota officials, including Gov. Jack Dalrymple, support the Sandpiper line, which would carry 225,000 barrels per day by 2016. His state is now the No. 2 oil producing state behind Texas.