In case number 13-13-02, St. Paul Park and Finery Company LLC, Petitioner versus Federal Energy Relatory Commission at L. Mr. Lorenzen for the Petitioner, Ms. Rylander for the Respondents and Mr. Reed for the Intervenor. Good morning, Your Honours. Thomas Lorenzen for the Petitioner, St. Paul Park, for Finery Company. This I think is a relatively straightforward case. And I want to go with just about the other two. Oh my gosh. Yeah, it's hard to follow that act. Nonetheless, let's talk about the few things that I want to cover here today. First, this case is not about whether the 2008 settlement agreement under which the Phase 6 expansion surcharge was established as ambiguous to interpretation. This settlement agreement is clear. We don't just view that. What the case is about is whether the circumstances surrounding the North Dakota pipeline have changed substantially or drastically since the time of the 2008 settlement, and whether that therefore requires revisitation of the settlement to ensure that the Phase 6 surcharge remains fair, reasonable, and in the public interest. And I think the critical things that the court needs to attend to here are the maps on page 7 and 8 of St. Paul Park's opening brief and on page 6 of first brief. They show that the circumstances have in fact changed quite dramatically from 2008 conditions due to the North Dakota pipelines 2013 Bach and Expansion project. That substantially changed the systems configuration, and it did three things
. First, it created a way for some shippers on the pipeline to escape the Phase 6 surcharge, even when they use elements of the Phase 6 expansion for which that surcharge was assessed. Second, it recreated a prior capacity problem on the line because the Western editions 164,000 barrel per day capacity cannot fully serve both the 210,000 barrel per day line to clear a book and the new 225,000 barrel per day beaver lodge loot that serves the Burnt Hold Rail Facility and the Enbridge Bach and Line North to Canada. The fact before we get to further on this with respect to the loop project. Yes. So Mr. Reads brief for the intervener says that this was not the focus of your complaint, that your focus of your complaint was the Burnt Hold Rail Facility, and I must say when looking at the complaint, that is what it looks like to me as well. And it was the focus of the complaint initially. But in the motion to dismiss that was filed by what was then Enbridge North to Canada is now North to Canada pipeline. They specifically said, and wait a minute, this isn't just the Burnt Hold Rail Facility, this is part of this Bach and Expansion Program, which involved the opening of the Burnt Hold Rail Facility, the construction of the beaver lodge, loop and- That was their- That was their pleading. But is there pleading of yours that you can point us to in the appendix, and which you make the argument that you're making today, that significant amount of what would otherwise go to a clear book is going through the loop project and then back north? Is there a- Yes. If you actually look at in the appendix, it's the document that begins at appendix page 338. It is the answer of St. Paul Park refining to the motion of Enbridge pipelines in North Dakota for lead to file a reply to the answer, which is an awfully long document. But page 338 of the appendix is where that starts. Uh-huh. And if you look at that document- Which page- Which sentence- I'm going directly to these sentences. Yeah. Actually a pretty short document in my joint appendix. It is. Hang on a second here. Yeah
. Perfect. Let me get- The reason I'm asking this obviously is that- Of the amount that you're saying is free writing. I'm going to use that just for purposes of your argument. I'm not sure I agree with it, but a lot of it is over this loop project. And if you didn't make that argument, then we can only focus on the parts that you did make. So- Well, I would- Before you to page 338 and 339 of the appendix- Yes. Where St. Paul Park says- The answer of St. Paul Park to the motion to dismiss of Enbridge did not change the focus of that three piece of evidence- Completed. Page 338. 338 and 339. Paragraph. It's paragraph two. Uh-huh. And where does that sentence? Uh- Contrary to the motion of Enbridge, the answer of St. Paul Park to the motion to dismiss did not change the focus of SBPRC's complaint and is proceeding or advance allegations not included in the original complaint. Rather, the motion of Enbridge introduces new and unsupported factual assertions thus creating new initials- material fact for discovery and hearing as discussed below. And then we talk about in the next paragraphs, uh- The fact that, um, shippers from five upstream origin points are using the classic system to reach bird hold. And what happens at the next paragraph? The next paragraph says that the- In fact, the focus of the complaint is actually the diversion to Bertolt. Right? To the Bertolt rail facility. Those are the words, right? It is there, but there is more to that
. I mean, first of all, you have to understand that this is- No, this is before I went before I learned to understand you have to tell me which sentence I would be understanding. Because it does not look okay to me like the- Like, um, the agency understood that you were making the argument that you're now making because the- The chart that they have at the end of their order is really only a comparison of the rail facility, um, um, barrels per day to the Bertolt rail and the barrels per day to clear book. And if they had understood it- So there's two possibilities, either that they completely misunderstood what you were saying. And we should reverse them because they misunderstood or that they did understand or that a reasonable agency would understand, in which case we can't hear that part of the argument. So help me with why the loop is really what we're talking about. Well, first of all, there are a number of things here that talk about- If you look at paragraph five, the very next paragraph, the current motion of N bridge introduces new unsupported factual allegations, creates new issues of material fact. In particular, it asserts the Phase Six Expansion involved no improvements to the line running from reserve in Bernouro. It goes on from there, but also it talks about in paragraph eight about halfway through that the 225,000 barrel per day beaver lodge loop that had been improved by the Phase Six Expansion. So we- We're talking now about the beaver lodge loop. Excuse me. Paragraph eight on page 341 of the appendix. I don't have a page three. The appendix? 341. We have it. We do have it. Okay. I apologize for that. What became clear during the dispute? I should say when the complaint was filed, we understood that there was a bird hold rail facility and there was a beaver lodge loop which was the line, the pipeline that got you there. But what we understood was that the volumes were going off there. What we discovered through the motion to dismiss and what Nbridge said, which North Dakota pipeline said, is that there was in fact another thing, that the majority of the volumes traveling over that line to bird hold were going to other places up this Nbridge-Bachin line to Canada. Bird hold is simply the destination for two different points of departure
. One being the rail head, the other being the Nbridge-Bachin line. This came out through the course of the proceedings before a bird and it is referred to in this portion of our answer. We think this is certainly enough to have raised a material question about what was going over this beaver lodge loop and where it was going in the volumes. And I note that also there is a statement in the affidavit of Mr. Steve, that I think is very critical. It's on the appendix of page 288, where he says, the phasic search charge is not applied to the shippers that deliver their crude oil into bird hold, either into the Bachin pipeline going north or the bird hold rail facility. So Nbridge raises this issue in their own factual submissions to- Tell me that again, I'm sorry. Page 288 of the appendix is the affidavit of Mr. Steve that was submitted to support the motion to dismiss. That was very illuminating to St. Paul Park that there was a separate problem here. That it was not simply just the bird hold rail facility that was taking volumes off the line, but there was the whole second thing. There was this Nbridge-Bachin line that previously had been a southward flowing line. The direction of that was reversed by the Bachin expansion program. Now it actually takes volumes off to the north. I see- I guess I can understand that you will- you learn things during this- the questions that Firk understand that you are not- I mean, the principal focus we have here seems to be on the loop. And that- is there some place where you then, after you learned what you learned during litigation below, you told Firk that in fact the real problem here or a big part of the problem is the loop? Well, I think that that is what we say in that last answer to the reply to the answer to the reply is that this is more than just about the rail facility. This is about the Beaver-Lodge loop, which has a 225,000 barrel per day capacity. Remember that the rail facility, according to the first- or to the math that was provided by North Dakota Pipeline, and that is reproduced in first brief at, I believe, page 6, shows that the- the capacity of the rail facility was only 80,000 barrels per day. There is another- another hundred and forty-five thousand barrels per day that are going somewhere. Where are they going? North on this average Bachin line that North Dakota Pipeline created as part of the Bachin expansion program
. And what we contend here is that change to the system. This fundamental change in the configuration of the system is a change to circumstance that justifies re-examination of the fairness and reasonability of these rates. What you've got now, and particularly if you look at the Firk map on page 6 of their brief, you can see that there is a constraint on the system at the western end of the system. Going into Beaver Lodge, the western addition of the Phase 6 expansion has a capacity of 164,000 barrels per day. Thirty-seven thousand barrels per day have one of the two lines in from, I can't remember if it's Grinora, or if it's from Alexander, and 127 from the other one. Yeah, that up you get 164,000 barrels per day. Up until the point of that phase of the Bachin expansion program, all of that western capacity, or almost all of that western capacity, served the North Dakota line through to Beaver, which has an overall capacity of 210,000 barrels per day. Suddenly you open this new line, the Beaver Lodge loop, with its 225,000 barrel per day capacity. Well, just simple math tells you 164,000 barrels per day cannot fully serve both a 225,000 barrel per day new line, and a 210,000 barrel per day line to clearable. You've got a constraint on the system. And what we notice is that immediately upon the opening of that line, the surcharge assessed to Shipper's to clearable quadruple. It went from about 22 cents per gallon to 82 cents per day. February 2013, March 2013, and the surcharge quadruple immediately after that. So I'm looking at the appendix to the agency's order, which has this chart of barrels per day to clear book. Appendix 19. I'm sorry, page 19? Yeah. That's the appendix to the order, right? Yes, it is. So that shows the barrels per day to clear book dropping well before, dropping significantly well before the date you mentioned February 23rd, and actually rising at some point soon after the date you mentioned, not going down. It does start to rise. Absolutely it starts to rise. Now the agency says that so that's not clear that this is what's causing the problem
. What's the answer to this? Well, it's not clear. I mean, that's one thing. First of all, it's not clear. Second is the volumes here, one of the things that is reported in this chart is volumes to the Bertolt rail facility. There is nothing said here about volumes that are going on to this 145,000 barrel per day line. No, I can't. That's what I took to be there, not understanding that that was the argument. Well, this chart is from North Dakota's own submissions. It's just reproduced from their briefs. They clearly understood they had their 225,000 barrel per day line. They brought it into the case by referring to the Bach and expansion program by explaining what it was. But in any event, what explains the fact that it was dropping significantly before the date you mentioned and then start rising from the point? Well, it may well be, well, we don't know. I mean, this is what one of the things we wanted to discovery about is what was going on here. North Dakota Pipeline says, look, the drop in volumes is due to the fact that some users may prefer rail now under then present economic conditions to pipeline transportation because it's simply cheaper. Volume starts rising, but it never rises to the levels that North Dakota Pipeline assumed would be there, which was about 160,000 barrels per day. Also, when North Dakota Pipeline itself adds a rail facility, it exacerbates the problem because it creates another outlet for those volumes to go somewhere else that could have gone through to clear. Well, I guess what I'm asking is if I look at this chart and your position is, if nothing had happened after February 2013, that would be, you wouldn't have a complaint, right? If February 2013 hadn't happened, then you wouldn't have any complaint. If they had not opened this new one. Absolutely. If only it had rise and fall and rates rise and fall. Yes, but so by that date, you are already at 96,038 barrels per day without any impact caused by the expansion
. Well, that is clearly, you know, if volumes are rising and falling on that line through no fault of North Dakota Pipeline, through no intervention by then, that's on us. That's on St. Paul Park. That's why it makes no sense for FERC to say in their order, looks St. Paul Park didn't complain when rates rose and fell previously. Of course not, because that was just normal market fluctuations. What happened in February of March 2013 is that the configuration of the system changed dramatically. A new line was open. Volumes could go elsewhere. Volumes are going elsewhere. They admit that at least 6.5 percent of the volume from Trenton Alexander is going on to this new line. There is the additional question that even if the reductions in the volume are due to normal market fluctuations, these entities that are shipping over the Beaver Lodge loop are using portions of the phase of the Westman edition of the Phase 6 expansion. They admit at least 6.5 percent. That's just from Trenton Alexander. We don't know. They're using 6.5 percent of the expansion, is that what you said? They're using, they say right in their pleadings and I'll get you the quote. It is in, um, Emberage is replied to St. Paul Park's answer begins at epenics 325, but I'm going to refer you to specifically to page 30
. I just want to get the number here. It's 6.5 percent. Right. Yes. The level of volume moving from Alexander and Trenton to Bertolt is small, comprising less than 6.5 percent of total volume moving on the average amount of the system. So that much of a claim about changed circumstances if you were restricted to that 6.5 percent would you? Well, it's, that only covers one of the two branches of the Western edition. There's a second branch from Granora that they do not address at all. If you look at, again, at the map, you'll see that there are two branches of the Western edition that come into Beaver Lodge loop. They only address the volumes of one. They don't mention at all what's happening on the other. Second, they don't mention what's happening with the 100,000 barrel tank that was installed at Beaver Lodge as part of the Phase 6 expansion. And whether these shippers on the Beaver Lodge loop are using that, certainly whether volumes are rising or falling on the Western edition, people who are using the Phase 6 expansion or portions of it should be paying a portion of those costs. But instead, all falling on St. Paul Park and the other shippers three to make sure those branches were part of the Phase 6 expansion. There was additional capacity added to those as part of the Phase 6 expansion. If you read, again, let's see, I have the volumes in here. That's actually not in dispute that there was additional volume added to those things. Pardon me a second, I will get you that, that foreshadowed it
. What about on J8328, it says, the Phase 6 expansion involved no improvements to the lines running from the reserve in Granora stations? What's, let me see. What the, the pleadings also say, Epinix page 284, the Phase 6 expansion added capacity of approximately 40,000 barrels per day of capacity into Mono, North Dakota, from the western end of the pipeline system. You're on 284? 284. This is the affidavit of Mr. Steve. And approximately 51,000 barrels per day of capacity from Mono to the eastern end. So we're focusing on the 40,000 additional barrels of capacity into Mono. We don't know exactly where all those chains were made. We know that additional piping, pumping stations were upgraded. We know that drag reducing agent facilities were added. We know that this 100,000 barrel tank was added at Beaver Lodge. All those things are portions of the western addition. And there is an admission here that the shippers on Beaver Lodge Lou are using portions of that western addition. We don't have full information. This is why we want to discover it. There were clearly disputes of material fact here. And what we had was, FERC essentially adopting the factual environments of the move and or dismissal or some way judgment rather than assuming that- But you didn't introduce any affidavits that countered them, right? We didn't have to because their own affidavits talk about this 145,000 barrel per day line to Canada. The reversal of the direction of that line, the addition of the railhead, the addition of the Beaver Lodge Lou, that's from their own pleadings. We don't have to counter their own affidavits when they support us. They support the allegations in our complaint that volumes are being diverred from clear book. So what was in dispute? Pardon? What was in dispute then? What is in dispute is, well, the essential question in here is, is the addition of the fate of the Beaver Lodge Lou and the Bachan expansion, a changed circumstance? But that's not the factual dispute
. That's- that's fate. Well, the fact- Well, the fact- The judgment to be made based on the fact- Very good. Then the factual disputes, I get that question here, honor, is our first of all, how much of the volume is being diverted onto the Beaver Lodge Lou, whether it's destined for the Bertol Rail Facility or for the Enbridge Bachan Line? How much of the Western addition of the Phase 6 expansion lines in from Grenoira and Alexander to Beaver Lodge Lou as well as the 100,000 barrel tank at Beaver Lodge are being used by those shippers. What percentage of the capacity and therefore what percentage of the search charge should they be bearing in order to make this- this search charge once again fair, reasonable, and in the public interest? That is the essence of the dispute. And that is why we think that for error- Well, isn't it dispute or you just would like some discovery on the question? The- their position is it's small. Where's your evidence that it's big? Well, the- the very fact that it's there, it doesn't matter if it's small or big, that the fact- Well, it has to be a disputed fact, not just a fact you'd like to know about, right? So you hear that. Well, we know that they are using it. Uh-huh. We know that they're all using it. That's not disputed. They agree that they're using it. But we don't know how much. And that is a disputed fact. It's not a disputed fact because you're not disputing it. I mean, if you want- if you wanted to say it was ex amount and they wanted to say it's why amount, you would have a dispute. But you're not disputing it. Isn't your argument really- I'm sorry. No, no, no. Please, your argument, or I guess the point that- that- that I don't want to put words in his mouth, but that you judge garlic as making is that your argument is really more akin to whether there was kind of a reasonable basis for them to conclude that the facts were as they thought that they were, as opposed to that there was a dispute. You see- I get your point. Yes. And, you know, ultimately this does boil down to whether there are changed circumstances. Is there enough of a question here that volumes are leaving the system before clear a book that otherwise might have gone there and whether people are using the Phase 6 expansion facilities without paying surcharge for them? There is a dispute as- it is certainly clear that they are using portions of that system, that volumes are going off. That's not in dispute. It's admitted. What is in dispute or what remains to be discovered is how much volume is going off. And how much of the Western addition to the Phase 6 expansion are these shippers using? Those are the factual disputes that we think entitled St. Paul Park Refining Company to a hearing and to discovery to determine these things. You know, it's quite possible we'll find that they incalculating how much volume was going to move through to Clearbrook for 2013 and 2014 took into account how much volume would be moving off the system onto the river lodge loop. We don't know because we don't have access to those sorts of records of North Dakota pipeline without discovery. Those are the things that we think we were entitled to and that we didn't get because Furt dismissed this without that chance. Okay. Thank you. We'll hear I think from Furt now, right? Good morning. May it please the court Elizabeth Rylander for Furt with made council tables Stephen Greed and Glen O'Reilly for interday in North Dakota pipeline. Judge Garland, do you ask whether the commission understood St. Paul Park's argument and resolving the complaint? Again, you have to lean in a little bit. Oh, I'm sorry, honors this better. Much better. Thank you. Many of the arguments that St. Paul made to this court this morning were raised for the first time not in the complaint but in subsequent leadings
. And, you know, ultimately this does boil down to whether there are changed circumstances. Is there enough of a question here that volumes are leaving the system before clear a book that otherwise might have gone there and whether people are using the Phase 6 expansion facilities without paying surcharge for them? There is a dispute as- it is certainly clear that they are using portions of that system, that volumes are going off. That's not in dispute. It's admitted. What is in dispute or what remains to be discovered is how much volume is going off. And how much of the Western addition to the Phase 6 expansion are these shippers using? Those are the factual disputes that we think entitled St. Paul Park Refining Company to a hearing and to discovery to determine these things. You know, it's quite possible we'll find that they incalculating how much volume was going to move through to Clearbrook for 2013 and 2014 took into account how much volume would be moving off the system onto the river lodge loop. We don't know because we don't have access to those sorts of records of North Dakota pipeline without discovery. Those are the things that we think we were entitled to and that we didn't get because Furt dismissed this without that chance. Okay. Thank you. We'll hear I think from Furt now, right? Good morning. May it please the court Elizabeth Rylander for Furt with made council tables Stephen Greed and Glen O'Reilly for interday in North Dakota pipeline. Judge Garland, do you ask whether the commission understood St. Paul Park's argument and resolving the complaint? Again, you have to lean in a little bit. Oh, I'm sorry, honors this better. Much better. Thank you. Many of the arguments that St. Paul made to this court this morning were raised for the first time not in the complaint but in subsequent leadings. And I think it is fair to say that what the commission understood St. Paul Park's argument to be is that the exclusion of volumes to Burthoff from the FASIC settlement surcharge is inconsistent with the intent of the settlement. The commission found in St. Paul Park does not dispute today that the settlement is clear and unambiguous and the intent really doesn't matter. The commission also found that this found no merit to St. Paul Park's evident argument that the surcharge application may unduly discriminate against clear bookshippers. The commission found that there was no evidence to support these allegations in its order. And while St. Paul Park requested discovery, because of the allegations for unsubstantiated, the commission found that it was not required to host a fishing expedition and to further investigate allegations that had no basis. Moreover, what St. Paul Park has asked the commission to do is something exceptionally rare, which is to overturn an uncontested settlement. The commission as well as this court, spoken to the need for stability and predictability in contractual arrangements such as the settlement at issue here. The bar to overturning a settlement is very, very high. It requires a showing of change circumstances that make the settlement no longer just unreasonable under the interstate conversation. The commission reasonably found that in light of the lack of evidence, St. Paul Park had not supported its argument that the settlement was no longer just unreasonable and should no longer stand. If the court has no further questions. I take it you would agree that if, say, St. Paul were the only remaining company that was shipping on that line, because everybody else was going out at clear water, that that would be a substantially change circumstance. Your Honor, the settlement is drafted in a- I clear a book, I'm sorry. I understand, Your Honor
. And I think it is fair to say that what the commission understood St. Paul Park's argument to be is that the exclusion of volumes to Burthoff from the FASIC settlement surcharge is inconsistent with the intent of the settlement. The commission found in St. Paul Park does not dispute today that the settlement is clear and unambiguous and the intent really doesn't matter. The commission also found that this found no merit to St. Paul Park's evident argument that the surcharge application may unduly discriminate against clear bookshippers. The commission found that there was no evidence to support these allegations in its order. And while St. Paul Park requested discovery, because of the allegations for unsubstantiated, the commission found that it was not required to host a fishing expedition and to further investigate allegations that had no basis. Moreover, what St. Paul Park has asked the commission to do is something exceptionally rare, which is to overturn an uncontested settlement. The commission as well as this court, spoken to the need for stability and predictability in contractual arrangements such as the settlement at issue here. The bar to overturning a settlement is very, very high. It requires a showing of change circumstances that make the settlement no longer just unreasonable under the interstate conversation. The commission reasonably found that in light of the lack of evidence, St. Paul Park had not supported its argument that the settlement was no longer just unreasonable and should no longer stand. If the court has no further questions. I take it you would agree that if, say, St. Paul were the only remaining company that was shipping on that line, because everybody else was going out at clear water, that that would be a substantially change circumstance. Your Honor, the settlement is drafted in a- I clear a book, I'm sorry. I understand, Your Honor. The settlement is drafted in such a way that a single ship or could be responsible for the entire basic surcharge. So what would be a substantially changed circumstance? That is real, that is not clear from the record, and there are very few, there are very few guideposts in previous commission orders that would lead us to an answer to that question. But given what was presented to the commission, the commission reasonably found that there was no- there was no substantially changed circumstance here. So the subsequent construction on the pipeline that was foreseeable to the parties in which St. Paul Park admits is foreseeable was not a substantially changed circumstance. The evidence that St. Paul Park discussed today, and I point specifically to Appendix PH-288, the arguments regarding draining volumes off of the classic line to the back of line was first raised not in the complaint, but in subsequent pleadings. And in fact, the arguments regarding the reversal of flow in the back of line were not presented to the commission at all, but only to this court. So the commission has not- Which ones were not at all presented? The reversing of the line? The contention is regarding the reversal of flow and the draining of volumes away from Clear Brook. That was first raised as far as at least where I can find it in picture. I'm sorry, is that one argument or two? It's their two inter-rated related arguments. As I understand St. Paul Park's argument, what they're saying is that when the direction of flow on the former portal line, which is now called the back-in-line, is changed, volumes were diverted from the classic system and taken by a circular route away from the classic system to Clear Brook by other means. What, where is that going? It's going north, or Canada, but- Is there a refinery out there? No, Your Honor. There's additional pipeline capacity in Canada. So the back-in-line can take some volume off of the classic system and north to Canada to join the end-bridge main line. So it goes essentially around a loop, but still ends up at Clear Brook. But the argument that this- Well, if it ends up in Clear Brook, it doesn't not count? It's not that it doesn't count, Your Honor. Those lines are not subject to the Phase 6 surcharge. They are subject to the back-ins, to the rate component of the back-in-line, applicable to the back-in-line that pays for the- that pays for the expansion of the system, that pays for that part of the expansion of the system. There's no-there's no way that I can see to avoid paying a surcharge for expansion of the system
. The settlement is drafted in such a way that a single ship or could be responsible for the entire basic surcharge. So what would be a substantially changed circumstance? That is real, that is not clear from the record, and there are very few, there are very few guideposts in previous commission orders that would lead us to an answer to that question. But given what was presented to the commission, the commission reasonably found that there was no- there was no substantially changed circumstance here. So the subsequent construction on the pipeline that was foreseeable to the parties in which St. Paul Park admits is foreseeable was not a substantially changed circumstance. The evidence that St. Paul Park discussed today, and I point specifically to Appendix PH-288, the arguments regarding draining volumes off of the classic line to the back of line was first raised not in the complaint, but in subsequent pleadings. And in fact, the arguments regarding the reversal of flow in the back of line were not presented to the commission at all, but only to this court. So the commission has not- Which ones were not at all presented? The reversing of the line? The contention is regarding the reversal of flow and the draining of volumes away from Clear Brook. That was first raised as far as at least where I can find it in picture. I'm sorry, is that one argument or two? It's their two inter-rated related arguments. As I understand St. Paul Park's argument, what they're saying is that when the direction of flow on the former portal line, which is now called the back-in-line, is changed, volumes were diverted from the classic system and taken by a circular route away from the classic system to Clear Brook by other means. What, where is that going? It's going north, or Canada, but- Is there a refinery out there? No, Your Honor. There's additional pipeline capacity in Canada. So the back-in-line can take some volume off of the classic system and north to Canada to join the end-bridge main line. So it goes essentially around a loop, but still ends up at Clear Brook. But the argument that this- Well, if it ends up in Clear Brook, it doesn't not count? It's not that it doesn't count, Your Honor. Those lines are not subject to the Phase 6 surcharge. They are subject to the back-ins, to the rate component of the back-in-line, applicable to the back-in-line that pays for the- that pays for the expansion of the system, that pays for that part of the expansion of the system. There's no-there's no way that I can see to avoid paying a surcharge for expansion of the system. It's just a question of which one you paid. No, I understand that. And this is merely a question of my not understanding the contract. But I thought it said everything that exits at Clear Brook is charged, is that right? Yes, that's correct. So if it started to the West in this Western edition area and ended up in Clear Brook through the circuitous method you were just describing where it goes all the way north and then comes all the way south, would it be subject to the surcharge? I believe that would-because that would flow over the Beaver-Lodge loop, that that would be subject to the Beaver-Lodge loop expansion component of the rate. Even though in the end it exits at Clear Brook? Even though it goes to Clear Brook eventually, I would, however, suggest Court ask that question to the intervener who is probably better positioned to explain the details. So he's eager to get up here, so. But again, here on our same-Saint Paul Park has not raised some of these arguments before the commission whatsoever, and these are these contentious about the effect of reversing flow of that particular line or not presented to the commission at all. So the commission certainly didn't understand that argument. The commission never had an opportunity to consider it. So you think they were obligated then to file a particular agreement? So the conclusion or they just haven't exhausted their administrative revenues? This is a very odd jurisdiction situation we have. But usually you have to file a rehering request for us to have jurisdiction that this is under the ICI, so I guess you don't. Yes, Your Honor. I agree that it is a strange situation. I think if St. Paul Park had arguments concerning the effect of reversing that line, it should have raised them before the commission and it's complaint. But to any extent that it had difficulty with the latter two pleadings filed before the commission that it discussed this morning, the commission did not consider those or cite them in its order whatsoever. And if St. Paul Park had concerns with the commission having decided, having made its decision in the apparent absence of considering those pleadings, then yes, it certainly should have filed a request for rehering. Further questions? Thank you. Thank you
. It's just a question of which one you paid. No, I understand that. And this is merely a question of my not understanding the contract. But I thought it said everything that exits at Clear Brook is charged, is that right? Yes, that's correct. So if it started to the West in this Western edition area and ended up in Clear Brook through the circuitous method you were just describing where it goes all the way north and then comes all the way south, would it be subject to the surcharge? I believe that would-because that would flow over the Beaver-Lodge loop, that that would be subject to the Beaver-Lodge loop expansion component of the rate. Even though in the end it exits at Clear Brook? Even though it goes to Clear Brook eventually, I would, however, suggest Court ask that question to the intervener who is probably better positioned to explain the details. So he's eager to get up here, so. But again, here on our same-Saint Paul Park has not raised some of these arguments before the commission whatsoever, and these are these contentious about the effect of reversing flow of that particular line or not presented to the commission at all. So the commission certainly didn't understand that argument. The commission never had an opportunity to consider it. So you think they were obligated then to file a particular agreement? So the conclusion or they just haven't exhausted their administrative revenues? This is a very odd jurisdiction situation we have. But usually you have to file a rehering request for us to have jurisdiction that this is under the ICI, so I guess you don't. Yes, Your Honor. I agree that it is a strange situation. I think if St. Paul Park had arguments concerning the effect of reversing that line, it should have raised them before the commission and it's complaint. But to any extent that it had difficulty with the latter two pleadings filed before the commission that it discussed this morning, the commission did not consider those or cite them in its order whatsoever. And if St. Paul Park had concerns with the commission having decided, having made its decision in the apparent absence of considering those pleadings, then yes, it certainly should have filed a request for rehering. Further questions? Thank you. Thank you. We'll hear from Mr. Reed. Thank you, Your Honor. Mr. Steven Reed for North Dakota Pipeline as intervener. Let me start with the question, which Ms. Rylander hunted to me about why the search arch does not apply to the volumes that go around the distributors route to get the clear route. It's because those pipelines going north out of a birthold and around into Canada are all separate companies. Those are not owned by or operated by North Dakota Pipeline. And so the settlement only covered North Dakota Pipelines. It's only the delivery's binore to Dakota Pipeline to Clearbrook that are covered by the Phase 6 search arch. I want to briefly really address three points, and I'll be very brief on the first one since Ms. Rylander I think I already covered it. This is an extraordinary step that St. Paul Park is asking the Court to take to overturn a order upholding a previously approved settlement against the claim of change circumstances. In fact, St. Paul Park cites no precedent from this court or any other court doing that act, and we were not able to find one either. I think there's enormous difference given to the commission's policy that settlements are sacrosanct and the absence of extraordinary change circumstances. The commission certainly did not find to be the case here. Secondly, there's been a lot of discussion about this, and I think it's clear from this argument that St. Paul Park has retooled its case from what it presented to the commission and its complaint to what it argued in its later pleadings to the commission and what it's arguing to the Court of Appeals here
. We'll hear from Mr. Reed. Thank you, Your Honor. Mr. Steven Reed for North Dakota Pipeline as intervener. Let me start with the question, which Ms. Rylander hunted to me about why the search arch does not apply to the volumes that go around the distributors route to get the clear route. It's because those pipelines going north out of a birthold and around into Canada are all separate companies. Those are not owned by or operated by North Dakota Pipeline. And so the settlement only covered North Dakota Pipelines. It's only the delivery's binore to Dakota Pipeline to Clearbrook that are covered by the Phase 6 search arch. I want to briefly really address three points, and I'll be very brief on the first one since Ms. Rylander I think I already covered it. This is an extraordinary step that St. Paul Park is asking the Court to take to overturn a order upholding a previously approved settlement against the claim of change circumstances. In fact, St. Paul Park cites no precedent from this court or any other court doing that act, and we were not able to find one either. I think there's enormous difference given to the commission's policy that settlements are sacrosanct and the absence of extraordinary change circumstances. The commission certainly did not find to be the case here. Secondly, there's been a lot of discussion about this, and I think it's clear from this argument that St. Paul Park has retooled its case from what it presented to the commission and its complaint to what it argued in its later pleadings to the commission and what it's arguing to the Court of Appeals here. And I think that is inconsistent with the doctrine of exhausting remedies. I think first of all, if they had found things as they alleged during the course of the case, they thought were significant. They could have amended their complaint. Raised those, we would have had a chance to answer in the commission presumably have addressed those issues. That was not done. They could theoretically have sought rehearing, although it's not required. It is certainly available as an administrative remedy. If they thought there was something they had presented, the commission had an address. At the commission doesn't make a point of this, but it is clear under the commission's rules. They're only required to look at what's in the complaint. Rule 343.3C of the commission's rules specifically provides the commission can only take action on a complaint based on the issues in the complaint. So if St. Paul Clark wanted to raise the issues, I think it was incumbent on them to exhaust the appropriate remedies to do that. And the result of this change is that we're now faced with a case presented to this Court that's faced entirely on raw speculation about facts that are not in the record. Many of which are incorrect. I'll just point out one. It was represented this morning that there was nothing in the record to say that there was not an improvement to the Grinora Reserve line as part of phase six. But we put in an affidavit of Mr. Steed and it's cited in our brief at appendix 329 to 330 specifically saying there were no improvements to the lines running from reserve and reserve and Grinora majoring phase six. So any volumes moving over that line are not relevant to the phase six search charge at all
. And I think that is inconsistent with the doctrine of exhausting remedies. I think first of all, if they had found things as they alleged during the course of the case, they thought were significant. They could have amended their complaint. Raised those, we would have had a chance to answer in the commission presumably have addressed those issues. That was not done. They could theoretically have sought rehearing, although it's not required. It is certainly available as an administrative remedy. If they thought there was something they had presented, the commission had an address. At the commission doesn't make a point of this, but it is clear under the commission's rules. They're only required to look at what's in the complaint. Rule 343.3C of the commission's rules specifically provides the commission can only take action on a complaint based on the issues in the complaint. So if St. Paul Clark wanted to raise the issues, I think it was incumbent on them to exhaust the appropriate remedies to do that. And the result of this change is that we're now faced with a case presented to this Court that's faced entirely on raw speculation about facts that are not in the record. Many of which are incorrect. I'll just point out one. It was represented this morning that there was nothing in the record to say that there was not an improvement to the Grinora Reserve line as part of phase six. But we put in an affidavit of Mr. Steed and it's cited in our brief at appendix 329 to 330 specifically saying there were no improvements to the lines running from reserve and reserve and Grinora majoring phase six. So any volumes moving over that line are not relevant to the phase six search charge at all. Similarly, there's an assertion in the briefs now, which was not present in the complaint and wasn't even argued to the commission below, that somehow the reversal of the line going north into Canada was to change circumstance. But the record is pretty clear to the extent there is any record on this when the commission considered that project in 2010, be issued an order approving it. And in that order, it specifically recites that the line going north was closed in 2006, two years before the 2008 settlement. So there can't be a change in circumstance based in the 2008 settlement based on something that happened in 2006. And lastly, this argument that they have advanced that what's really relevant here are the facilities west of the line. Do you just said you said that that line that they say reverse direction is closed? It was closed in 2006, it was reopened as part of this project during the winter. But there was no oil flowing into clear brook from that line previously, so no flow was cut off that existed at the time of the settlement. And finally, they focus now on the portions of the phase six facilities west of Beaver lodge that allegedly feed into these two pipelines. But the fact is at the time of the settlement is admitted in the pleadings there was an upstream destination which was Beaver lodge. And so it was always possible that volumes would go to Beaver lodge over some of these very modest facilities upstream that would not pay the phase six search cards. That was part of the settlement when it was approved. That's not a change if their volume is doing that today. As we pointed out and it was decided by council, the volume is going to the birth of rail facility through those facilities were less than six and a half percent of the total volume. That does not come anywhere close to matching the kinds of change circumstances that would be required to overcome the commissions exercise of its discretion in this case not to hold the hearing. There were no disputed issues of material fact. This is simply a legal policy question that the commission was entitled to resolve on the pleadings. Questions from the panel? Thank you, Mr. Reed. No time left, right? I'll give you another two minutes as we said. Thank you. Thank you
. Similarly, there's an assertion in the briefs now, which was not present in the complaint and wasn't even argued to the commission below, that somehow the reversal of the line going north into Canada was to change circumstance. But the record is pretty clear to the extent there is any record on this when the commission considered that project in 2010, be issued an order approving it. And in that order, it specifically recites that the line going north was closed in 2006, two years before the 2008 settlement. So there can't be a change in circumstance based in the 2008 settlement based on something that happened in 2006. And lastly, this argument that they have advanced that what's really relevant here are the facilities west of the line. Do you just said you said that that line that they say reverse direction is closed? It was closed in 2006, it was reopened as part of this project during the winter. But there was no oil flowing into clear brook from that line previously, so no flow was cut off that existed at the time of the settlement. And finally, they focus now on the portions of the phase six facilities west of Beaver lodge that allegedly feed into these two pipelines. But the fact is at the time of the settlement is admitted in the pleadings there was an upstream destination which was Beaver lodge. And so it was always possible that volumes would go to Beaver lodge over some of these very modest facilities upstream that would not pay the phase six search cards. That was part of the settlement when it was approved. That's not a change if their volume is doing that today. As we pointed out and it was decided by council, the volume is going to the birth of rail facility through those facilities were less than six and a half percent of the total volume. That does not come anywhere close to matching the kinds of change circumstances that would be required to overcome the commissions exercise of its discretion in this case not to hold the hearing. There were no disputed issues of material fact. This is simply a legal policy question that the commission was entitled to resolve on the pleadings. Questions from the panel? Thank you, Mr. Reed. No time left, right? I'll give you another two minutes as we said. Thank you. Thank you. Just very briefly, as Ms. Reiland her said, the FERC itself recognizes that these arguments that that St. Paul Park raises here were in fact raised before FERC in the subsequent pleadings. What about the reversal of directions? The reversal of direction is something that was described by Anne Bridge. Now, don't look at a pipeline in the affidavit of Mr. Steed and in their own motion to dismiss. And then did you like the reversal of the line if you're talking about the fact that it was closed previously? No, no. She said the reversal of the flow and what I'm describing is the securitous root to clear root. We're not presented to FERC at all. Well, there's this securitous root to clear root. I don't know if that was raised or not, but the reversal of the direction of the line, but what we have here is a line that as Mr. Reed said was closed in 2006. It was not on the way. After 2003, so it could not draw volumes away from clear root before the 2013 expansion project. The bucket exception. I think I understand the geography, which is actually pretty good about that. But my question is, did you argue specifically to the agency that that reopening the line, reversal line, et cetera, was itself a change circumstance? Well, we argued that the fact that there was 225,000 barrels per day that could come off. And only 80,000 barrels were going to be for large loop. The other 145 were going somewhere onto this line is the only place it could go. We all have the maps, the maps were before FERC. It could see the directions of the line
. Just very briefly, as Ms. Reiland her said, the FERC itself recognizes that these arguments that that St. Paul Park raises here were in fact raised before FERC in the subsequent pleadings. What about the reversal of directions? The reversal of direction is something that was described by Anne Bridge. Now, don't look at a pipeline in the affidavit of Mr. Steed and in their own motion to dismiss. And then did you like the reversal of the line if you're talking about the fact that it was closed previously? No, no. She said the reversal of the flow and what I'm describing is the securitous root to clear root. We're not presented to FERC at all. Well, there's this securitous root to clear root. I don't know if that was raised or not, but the reversal of the direction of the line, but what we have here is a line that as Mr. Reed said was closed in 2006. It was not on the way. After 2003, so it could not draw volumes away from clear root before the 2013 expansion project. The bucket exception. I think I understand the geography, which is actually pretty good about that. But my question is, did you argue specifically to the agency that that reopening the line, reversal line, et cetera, was itself a change circumstance? Well, we argued that the fact that there was 225,000 barrels per day that could come off. And only 80,000 barrels were going to be for large loop. The other 145 were going somewhere onto this line is the only place it could go. We all have the maps, the maps were before FERC. It could see the directions of the line. In fact, if you look at the map that's in FERC's brief, which is just a reproduction of the map from North Dakota's brief before FERC, it shows 145,000 barrels heading up that line to Canada. As Mr. Reed said, the volumes that travel on that line up to Canada and back down to Clearbrook do not bear any of the Phase 6 expansion search charge. So that itself is a fundamental change in circumstances. Yes, there was a very small exit at Beaver Lodge before this 2013 Bach and Expansion project. But as they say in their own pleadings in the Affine-Aid of Mr. Steve, the primary purpose of the Phase 6 expansion project was to benefit Shippers to Clearbrook. Once you reopen that line, change its direction, take volumes off of Beaver Lodge, you really can't say anymore that the primary purpose of that Phase 6 expansion is to serve Shippers to Clearbrook. It serves Shippers to Beaver Lodge and then some go to Clearbrook, some head northward. Those that are heading northward are getting the benefits of the Western edition of the Phase 6 expansion without paying any portion of the search. What do you say about the footnote to the settlement that says Enbridge reserves the right to propose a different plan for expansion? Yes, absolutely. They have the right to expand. There is no question they have the right to expand. There are constraints on the system. And, you know, as production from the Bach and increases, there is going to be the need for additional pipeline service to various destinations. The problem was created not by just the construction of the Beaver Lodge Lou, with its 225,000 barrel per day capacity, but the fact that they didn't do a course on expansion of the Western edition at the same time. That means you have a new constraint on the system. That's the change circumstance. You can't fully serve both the Beaver, pardon me, both the Clearbrook Shippers and the Beaver Lodge Loupe Shippers from that Western edition anymore because there is that constraint. 164,000 barrels per day remains the incoming capacity of those Western editions. For the questions on the panel
. Thank you, everyone. Thank you. I'll take the matter under submission