PUC rejects pipeline's proposal to cut Philadelphia refiners off from Pittsburgh

The Monroe Energy Refinery in Trainer is one of several Philadelphia area fuel producers that use the Laurel Pipe Line to serve customers in western Pennsylvania.

The Pennsylvania Public Utility Commission on Thursday rejected a proposal to abandon east-to-west service on a pipeline that now carries fuel from Philadelphia refineries to Pittsburgh, a critical issue for local refiners who say they want to preserve their access to Western Pennsylvania markets.

The PUC, by a 5-0 vote, rejected a proposal by Buckeye Partners LP to abandon service on part of the Laurel pipeline between Altoona and Pittsburgh. Buckeye asked the commission for permission to reverse flow on the pipeline to give Midwestern refineries access to central Pennsylvania, creating a dead end for Philadelphia refiners at Altoona.

Philadelphia Energy Solutions and Monroe Energy in Trainer joined with Pittsburgh fuel retailers, such as Sheetz and Giant Eagle, to oppose Buckeye’s proposal to cut off East Coast access beyond Altoona. Both the pipeline and the refiners had mobilized public supporters, including many elected officials, to argue that consumers and refinery workers would be harmed by their opponent’s proposal.

The PUC’s decision is unlikely to be the last word on the matter.

Buckeye seems intent on allowing Midwestern refiners, which produce fuel from domestic and Canadian shale-oil reserves, to have more access to Western Pennsylvania.

Buckeye announced in April that it plans to convert the pipeline to bidirectional flow, allowing it to move fuels either from the east or from the west at different times, depending upon market conditions. Under such a scenario, it would not abandon east-to-west service, but would not make access from the East Coast available year-round.

The company, in a statement Thursday, said it will continue to move forward with plans to provide two-way service on the Laurel pipeline, while abiding by the PUC decision.

“Bidirectional service will enhance competition and provide shippers and suppliers with more options while still increasing access to lower-cost North American-produced fuels for Pennsylvania consumers,” it said.