Oil pipeline giant Enbridge has been accused in an antitrust lawsuit of allegedly improperly using its market influence to maintain tight control over the shipping of crude oil in the U.S. by allegedly leaning on a company to scuttle a project that allegedly would have allowed crude from Canada and North Dakota to be shipped to the Gulf of Mexico on the region's rivers and canals.
On Feb. 13, Warrenville-based Ducere LLC filed suit in Chicago federal court against Enbridge and ExxonMobil, claiming the companies violated federal and state antitrust laws by allegedly conspiring to shut down a Ducere project, after Ducere had already spent $11 million on the effort.
When contacted by The Cook County Record, a spokesman for Enbridge said the company had not yet been served with the lawsuit, and would not have any comment until they were. The Cook County Record had provided a copy of the complaint, which had been filed in federal court, to Enbridge by email.
Ducere's lawsuit centers on the apparent end of its project to install what it called a "terminal connection" at a pipeline owned by an entity known as Mustang Pipe Line LLC.
All crude oil that enters the Chicago region is either refined into gasoline and other products for use in the region, sent further east to other refineries, or shipped by pipeline south to the Gulf region, according to the complaint.
However, the complaint asserts Enbridge almost entirely controls the flow of oil into and out of the Chicago region - a key "chokepoint" in the flow of petroleum in the U.S., the complaint says.
According to the complaint, the Mustang oil pipeline is the only pipeline that leaves Chicago which is not completely controlled by Enbridge. According to the complaint, three others are either entirely owned or majority-owned by Enbridge.
However, the complaint notes that Enbridge owns a 30% stake in the Mustang pipeline; ExxonMobil owns the remaining 70% stake, the complaint asserts. And the Mustang company is controlled by a four-person board, with two representatives each from ExxonMobil and Enbridge, according to the complaint.
With the alleged goal of increasing the number of options for the transportation of crude oil in the nation, Ducere allegedly moved forward with a project to install a terminal at the Mustang line near suburban Lockport and to use that terminal to fill barges with crude oil for shipment along the Chicago Sanitary and Ship Canal, to the Illinois River, and then south on the Mississippi River to the Gulf region.
Ducere said such martime transportation would help ease supply burdens on U.S. refineries, particularly during times of heightened demand, as the complaint asserts pipelines cannot transport more during such times and the complaint asserts transporting by rail can be more costly and allegedly less safe.
According to the complaint, Ducere allegedly secured consent from Mustang to move ahead with the project in 2020.
From there, the lawsuit said Ducere obtained permits and financing, including tax-free bonds from the Joliet Regional Port District, and performed preliminary work for the terminal. All told, Ducere said it has spent $11 million on the project.
However, according to the complaint, Mustang allegedly reneged on the deal in early 2023.
The complaint alleges this decision was made at Enbridge's behest, to allow the company to secure more long-term deals for its pipelines that flow south from the Chicago area.
The complaint asserts Mustang has benefited, as well. Accoridng to the complaint, Mustang reported more than $30 million in "excess profits" in 2022, and in 2023, increased the price of oil from its pipeline.
In addition to the antitrust claims, the lawsuit alleges tortious interference against all of the defendants, which include Enbridge, ExxonMobil and Mustang.
The lawsuit seeks unspecified damages, including actual damages, statutory damages, treble damages and punitive damages, plus attorney fees.
They are also seeking a court order directing Mustang to honor its earlier alleged agreement to allow Ducere to complete and operate the terminal connection on its pipeline.
Ducere is represented by attorneys Rex A. Sharp, Ike Diel, Hammons Hepner, Brandon C. Landt and Nathan A. Kakazu, of Sharp Law LLP, of Prairie Village, Kansas.