Colonial Pipeline Defends Gasoline Shipment Changes & Rejects Shipper Protests

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Colonial Pipeline Defends Gasoline Shipment Changes & Rejects Shipper Protests

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Tanks with the logo of Colonial Pipeline Company in Pelham, Alabama (© Shutterstock/Cavan-Images)
Tanks with the logo of Colonial Pipeline Company in Pelham, Alabama (© Shutterstock/Cavan-Images)

Colonial Pipeline on Monday urged the U.S. Federal Energy Regulatory Commission (FERC) to dismiss protests from shippers regarding proposed alterations to its gasoline transportation methods. The company asserted that the changes align with industry standards and fall within its operational authority.

The request comes after major oil companies, including Exxon Mobil, Chevron Corp. and BP Plc, filed protest notices with FERC last week. They objected to Colonial's proposal to cease simultaneous shipment of varying gasoline grades and to decrease the total number of grades transported on the pipeline.

The oil majors, which utilize the 5,500-mile (8,851 km) Colonial system to move gasoline from the U.S. Gulf Coast refining hub to East Coast consumer markets, expressed concerns about potential harm to both shippers and consumers, alleging the changes were designed to increase Colonial's profits.

In its response, Colonial refuted these claims, attributing the protests to the shippers' focus on their own financial interests. The company argued that the proposed modifications would enable an increase of up to 10,000 barrels per day in gasoline transport on its primary gasoline pipeline, which typically operates at full capacity, thus benefiting both shippers and consumers.

Colonial further stated that reducing the number of gasoline grades and eliminating overlapping shipments would mitigate pipeline slowdowns and shutdowns, thereby enhancing system integrity and reducing the risk of mechanical failures.

"The changes that Colonial seeks to implement through the Filing, which are squarely within its legal authority to make and consistent with industry practice, will enhance pipeline integrity and reliability and create more capacity for shippers," Colonial stated in its filing.

While acknowledging that the changes would facilitate an expansion of its own fuel-blending operations, Colonial emphasized that FERC has explicitly stated that blending activities are outside the regulator's jurisdiction.