The company that owns a pipeline supplying gasoline to gas stations in the region is seeking federal approval of a proposal to bring in product from refineries in eastern Pennsylvania and the Midwest, after state regulators denied its petition to deliver product from Midwestern refineries only.

Buckeye Partners of Houston, Texas, said it doesn't agree with the Pennsylvania Public Utility Commission's decision denying its proposal to reverse the direction of the flow of the Laurel Pipeline, but will abide by it. The proposal would have resulted in gas flowing to Western Pennsylvania from Midwestern refineries only.

After a PUC administrative law judge recommended denying the proposal in March, Buckeye filed a petition with the Federal Energy Regulatory Commission, seeking permission to provide bidirectional service through the pipeline.

The PUC formally denied Buckeye's proposal in July.

In a subsequent statement the company took issue with the decision:

“We respectfully disagree with the decision regarding our market-driven proposal aimed at providing Pennsylvania consumers with expanded access to more affordable fuels, but we will abide by the decision and continue to move forward with our current plans to provide bidirectional service on Laurel Pipe Line.

“Bidirectional service will enhance competition and provide shippers and suppliers with more options while still increasing access to lower-cost North American-produced fuels for Pennsylvania consumers,” Buckeye said in a statement.

A group of gas station owners, organized under the name “Deny Buckeye” applauded the PUC's rejection of Buckeye's petition and filed a formal protest with FERC against the bidirectional proposal.

“We commend the judge's well-reasoned decision. The only winners of a Laurel reversal would be Buckeye and out-of-state refineries. Midwest refineries already have access to Pennsylvania markets, but they don't want competition. Pennsylvania refineries have supplied fuel throughout our commonwealth for over a half-century. It is stunning to think that a Texas-based pipeline company wants to block our own refineries from serving Pennsylvania. A reversal would send fuel prices skyrocketing and put thousands of Pennsylvania jobs in jeopardy,” Deny Buckeye said in a statement.

Deny Buckeye members include Sheetz, Gulf Oil, Giant Eagle and other fuel retailers.

“It's basically an end-around to deliver product from the Midwest,” said Greg Johnston, Gulf's director of terminal operations. “They don't own product. Their concern is the fee tariff they get for delivering product.”

The Laurel Pipeline is an interstate pipeline subject to tariffs set by the PUC. It delivers gasoline from Philadelphia-area refineries to a hub in Altoona that serves the Pittsburgh market.

Making the pipeline bidirectional to deliver product from out-of-state refineries in the Midwest would place it under the jurisdiction of FERC, which allows the company to charge higher tariffs, Johnston said.

The PUC tariff Buckeye collects on product shipped from eastern Pennsylvania refineries to Pittsburgh is .015 cents per gallon, but the FERC tariff is .065 cents, he said.

Buckeye's petition to FERC does not say how the bidirectional system would work.

“Buckeye has not said how it will instate that bidirectional system. There's only one line into Altoona. There's been no operational discussion on how they're going to do that. They have not told us. I don't know if they know,” Johnston said.

He said he suspects Midwestern refineries would receive priority to use the pipeline because Buckeye collected higher tariffs from them.

Sheetz spokesman Michael Lorenz echoes those concerns.

“They have not provided any of the details surrounding that. We just need to learn more about how it would operate, how it would be executed. This is literally a case where the devil is in the details. We have a lot of questions and lot of concerns.,” Lorenz said.

Deny Buckeye called the bidirectional proposal an attempt to circumvent the PUC ruling and another attempt to favor Midwestern refineries over eastern Pennsylvania refineries.

“This ill-conceived and unworkable plan was concocted by Buckeye only after their attempts to reverse the flow of the Laurel Pipeline have stalled or failed. It's unfortunate that Buckeye continues to seek ways to cut off competition so that out-of-state refiners can pump transportation fuels into Pennsylvania. This would unfairly cut off supply from eastern Pennsylvania refineries, which have consistently supplied the Pittsburgh market with less expensive fuel, which benefits consumers. Additionally, this plan puts thousands of family-wage-sustaining Pennsylvania jobs at risk,” Deny Buckeye said in a statement.