FERC Rejects Colonial Pipeline Rehearing, Blocks Gasoline Shipment Changes

FERC has denied Colonial Pipeline’s rehearing request, maintaining its decision to block proposed changes to gasoline shipment specifications.

(Reuters) — The U.S. Federal Energy Regulatory Commission on March 30 rejected Colonial Pipeline's request for a rehearing after the regulator rejected the company's proposed changes to how the country's largest U.S. fuel artery handles gasoline shipments.

Colonial proposed modifications on specifications for its deliveries, including ending overlapping shipments of different grades of gasoline, and discontinuing shipments of so-called "Grade 5" gasoline sold in some Northeastern states during the winter.

On Nov. 3, the FERC blocked Colonial from that move, saying Colonial had not demonstrated that the changes were just and reasonable.

The company asked for a rehearing, arguing the decision was an error on the regulator's part.

"We continue to find Colonial’s arguments unpersuasive and deny rehearing," the FERC said in a filing.

A group of Colonial shippers, including oil majors ExxonMobil and BP, had protested the proposal, arguing it would harm their businesses by shifting blending margins away from them to Colonial.

The United States is the world's largest gasoline consumer and Colonial Pipeline is the largest refined products pipeline in the country, transporting over 100 million gallons of fuel daily from U.S. Gulf Coast to the East Coast.