Terminal Operator Access to Crude Oil Pipeline - Connecting the Dots

Regulatory, North America

Pipeline regulatory agency involvement was required when a terminal operator sought to blend a heavy crude oil into a light sour crude oil shipped on a common carrier pipeline. Baker & O'Brien identified the regulatory requirements and determined the economic impact of the proposed crude oil blending. We submitted expert reports to assist the regulatory agency in evaluating the issue, which was decided without oral hearings.

Baker & O'Brien was engaged in a pipeline regulatory matter to prepare evidence addressing a terminal operator's application for permission to receive and deliver crude oil from and to the pipeline. Specifically, the pipeline operator sought permission from the regulatory agency to conduct blending operations, including blending a heavy oil component into the light sour crude oil shipped on the pipeline.

Baker & O'Brien focused on two major areas: 1) the impact to crude oil refiners and producers from the crude oil blending while still meeting the light crude oil specifications, and 2) regulatory involvement with pipeline blending.

We calculated the impact of blending on the crude oil's value to a refiner operating a cracking refinery. Concerning regulatory involvement in pipeline blending, Baker & O'Brien found that in similar pipeline systems, the various industry participants govern and manage the crude oil price equalization process without regulatory involvement.

Baker & O'Brien's expert reports were submitted to the regulatory agency as evidence to assist with its decision.

Kevin G. Waguespack

Chief Executive Officer

Transportation and Storage
Standard of Care / Litigation / Expert Witness Testimony / Product Quality / Crude Oil Valuation
North America