Oil export efforts take it on the chin again

Another day, another setback for plans to boost Canadian oil exports.

And even before pipeline giant TransCanada announced it was scrapping plans to build an oil export terminal at Cacouna, Que., environmental groups were complaining it wasn’t enough.

They want the entire 4,600- kilometre pipeline that would transport 1.1 million barrels per day of crude oil from Alberta to the East Coast abandoned and the decision Thursday by TransCanada to bypass critical habitat for beluga whales in the St. Lawrence River was seen as only a partial victory.

“There are no economic benefits from a tarsands pipeline that simply passes through Quebec on its way to exporting oil from New Brunswick,” Greenpeace spokesman Keith Stewart said the day before TransCanada revealed its plans. “The decision ... will still pose unnecessary risks to communities and our environment.”

The decision to bypass Cacouna had been widely expected — construction on the marine terminal was halted last fall — but TransCanada revealed it will push back the timeline for the project by two years as it’s now “evaluating other options” for an export facility in Quebec.

There are other ports on the St. Lawrence, including Montreal and Quebec City, with access to the Atlantic basin and the Quebec government has said there must be economic benefits to the province to justify approval of the contentious project.

Nova Scotia Energy Minister Andrew Younger has also lobbied to extend Energy East from the current planned terminus in Saint John, N. B., to his province where the Strait of Canso oil terminal and storage facilities operate on Cape Breton Island.

TransCanada had no option other than to abandon Cacouna, a port near Riviere du Loup, after Quebec Premier Phillippe Couillard suggested the Calgary- based company find another port to dock large oil tankers. In December, the federal Committee on the Status of Endangered Wildlife in Canada recommended beluga whales should be classified as endangered. It’s a far more legitimate concern than some objections put forward to block other pipelines from Western Canada proposed to coastal refineries and tidewater ports.

Once TransCanada officially notifies the National Energy Board of the change to its proposal for the $ 12- billion project, Energy East will join Keystone XL, Northern Gateway, Trans Mountain Expansion and Line 9 Reversal as high- profile pipeline projects delayed before regulators.

In total, they represent more than 3.3 million barrels a day of potential pipeline capacity. All face regulatory or political hurdles.

“Any amendments to the application for Energy East ... are expected to be filed with the NEB in the fourth quarter of 2015,” TransCanada CEO Russ Girling said in a statement.

It expects Energy East to be in service in 2019 in Quebec and extend to Saint John in 2020.

“It’s all going in the right direction for us and we’re ecstatic,” David Duplisea, CEO of the Saint John Region Chamber of Commerce, told the National Post this week as speculation grew TransCanada was about to alter the application for Energy East it filed last October.

Saint John is home to the massive Irving oil refinery as well as the largest petroleum- handling port in Canada and TransCanada has said Energy East could replace 700,000 barrels a day of imported crude refineries in Eastern Canada now process.

Oil producers — with the federal, Alberta and Saskatchewan governments — have also made access to global oil markets the focal point of plans to accommodate oilsands production that is forecast to increase by more than one million a day in the next five years from 2.3 million barrels this year.

Environmental groups have been equally determined to block new pipelines to curtail development.

Amid global competition, industry’s fear is that market access delayed will amount to market access denied.

For all of the focus on the inability of Canadian producers to access to global markets, it seems counterintuitive that oil exports were a record 2.9 million barrels a day in the fourth quarter of 2014. However, all but 30,000 barrels a day of that oil was sold to the U. S. market.

Overall, Canada’s oil production is expected to increase by 120,000 barrels a day to 4.3 million, according to the U. S. Energy Information Agency. Many industry analysts have predicted Canada will need another major export pipeline by 2018 or production may be squeezed.

The delay to Energy East makes that prediction look increasingly likely.