Reply Comments of Joint Shippers (Suncor Energy Marketing Inc., Canadian Natural Resources Limited, Continental Resources, Inc. and Husky Marketing and Supply Company)under OR12-4.

Some of the origin market alternatives identified by Applicants are not actually available to shippers on Seaway; Applicants and AOPL distort the Merger Guidelines and basic principles of antitrust analysis; and Applicants request for waiver of the Commissions regulations should be denied. BACKGROUND In Mobil, the court of appeals reviewed the Commissions order denying an application by Mobil Pipe Line Company (Mobil) for authority to charge market-based rates on its Pegasus crude oil pipeline. Mobil Pipe Line Co., 133 FERC 61,291 (2010) (Mobil Order). The court concluded that the Mobil Order was unreasonable on the specific facts of that case. The court vacated the Commissions order and remanded the case to the Commission for further proceedings consistent with the courts decision. Mobil at 1105. In the Seaway Order, the Commission denied the application (Application) of the Applicants for authority to charge market-based rates as initial rates on the reversed system of Seaway Crude Oil Pipeline Company (Seaway). The Commission ruled that Applicants, in order to justify the Seaway origin market, must show that each alternative outlet is a good alternative in terms of price for each shipper in the market. Because Applicants admitted that such an analysis could not be conducted in the absence of an established tariff rate, the Commission denied the Application. Seaway Order at P 38. As explained in the initial comments of the Joint Shippers submitted herein, the Seaway Order appropriately addressed the findings and rulings of the court in Mobil. -3- The Commission noted that the court recognized the Commissions definition of market power as the ability profitably to maintain prices above competitive levels for a significant period of time which analysis by necessity requires an assessment of alternatives in terms of price. Seaway Order at P 31. The Commission further observed that the courts rejection of the regulated tariff rate as an appropriate proxy for the competitive rate in that particular case did not mean relevant price data or an adequate proxy for the competitive rate are no longer necessary or relevant under the Commissions regulations governing market power for oil pipelines. Id. at P 32. The Commission concluded, based on Mobil, that a pipeline must still present price data in order to determine good alternatives for inclusion in the geographic market. Id. The analysis by the Commission is consistent with and in accordance with: (a) long-standing FERC precedent; (b) Department of Justice and Federal Trade Commissions Merger Guidelines; and (...