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Company claims judge erred in decision on pipeline reversal

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A pipeline company is asking state utility commissioners to reject or modify a recommendation that could block the company's plans to reverse part of a gasoline pipeline that crosses Pennsylvania.

In a nearly 50-page filing with the Pennsylvania Public Utility Commission, the company is arguing that an administrative law judge erred last month in recommending against the pipeline reversal.

The filing is the latest flare-up over plans to change direction on part of the Laurel Pipe Line, which carries gasoline between Philadelphia and Pittsburgh. It is operated by Laurel Pipe Line Co., a subsidiary of Texas-based Buckeye Partners LP.

Buckeye wants to reverse a portion of the pipeline in western Pennsylvania so that it flows eastward from Pittsburgh toward a point near Altoona. The company has argued that the move will benefit Pennsylvania consumers by bringing in lower-cost fuel from Midwestern refiners.

Critics have said the move will turn Pittsburgh into a captive market for those same Midwestern refiners, which will not be able to meet the demand, thereby driving up prices.

A PUC administrative law judge ultimately sided with the critics, questioning whether consumers would benefit from a reversal. The ruling is a recommendation, meaning it must be approved, rejected or modified by the full Public Utility Commission before taking effect.

In its filing this week, Laurel said it provided testimony in hearings to support its claims about a drop in gas prices from a reversal, among other points it said should prompt the PUC to reject or change the judge's recommendation.

Other parties have 10 days to reply to Laurel's filing, which is known technically as an exception, according to Nils Hagen-Frederiksen, a PUC spokesperson.

On April 6, meanwhile, Buckeye said it was moving forward with steps to reverse the flow on the Pittsburgh-to-Altoona section of the Laurel pipeline. It has declined to clarify what those steps are.

In a statement at the time, Robert A. Malecky, Buckeye’s president for domestic pipelines and terminals, said: "Buckeye fully respects and remains committed to the ongoing PUC process. We see the addition of eastbound service to the current westbound capability as providing an operational solution for all our customers. This approach provides shippers and suppliers with the choice to supply from either the west or east, while still increasing Pennsylvania consumers’ access to more affordable, lower cost North American-manufactured fuels, and we think it does so in a way that fully addresses the points raised in the recent PUC proceedings."  

Deny Buckeye, a coalition of companies opposed to the reversal, blasted the move, saying in a statement at the time: "We don’t have details, but we’re certainly suspicious of this decision. After over a year of telling the PUC, legislators, media and the public that a reversal is best for Pennsylvania, Buckeye is now trying to take unilateral action that appears to be circumventing the Pennsylvania Public Utility Commission process. Truly embracing bi-directional flow that meets the needs of Buckeye’s current customers — and being open to competition — are contrary to their position for the past 12-18 months. We look forward to hearing more about their plans before taking an official position."

Coalition members include Sheetz, Giant Eagle, Gulf, Guttman Energy, Monroe Energy and Philadelphia Energy Solutions.

Buckeye Partners has been seeking the pipeline reversal since 2016.

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