Coderre, environmentalists back delay on Energy East
Business groups say failure of pipeline will have a negative economic impact
Montreal’s mayor and local environmental groups say they’re pleased TransCanada Corp. has asked the National Energy Board to suspend its review of the Energy East Pipeline, but some probusiness organizations say it could have a negative effect on Quebec’s economy.
On Thursday, TransCanada asked the NEB, which regulates inter-provincial energy transport, to pause its review of the proposed pipeline for 30 days, so the company can review the board’s decision to consider the upstream and downstream greenhouse-gas emissions of the project.
Plans call for the main pipeline, which would transport 1.1 million barrels of oil a day, to be built north of Montreal, however a spur would connect it to refineries in the city ’s east end.
“I’m pleased with it,” Mayor Denis Coderre said of TransCanada’s request.
He said Quebec “cannot be the capital of hydro electricity, focusing on energy transition, signing the Paris Declaration” while new pipelines are being built in the province.
“We were pleased to see that the government of Canada wants to include environmental evaluation,” Coderre said. “No matter if they re-evaluate or not, we’re against it, period.”
That political opposition is one of “many clouds over Energy East,” said Karel Mayrand, the director general for Quebec at the David Suzuki Foundation.
Other factors include the high cost of oil from Alberta’s oilsands and signs in the United States that TransCanada will get approval for the fourth phase of its Keystone Pipeline, the Keystone XL.
“The project is becoming more risky and perhaps the decision of the NEB is providing a pretext for TransCanada to take a pause and eventually cancel the project altogether,” he said.
Mayrand said he’s pleased the NEB is taking a more holistic look at the effect of pipelines.
“This entire system, from production to consumption, what comes out of the end of the exhaust pipe of your car, is what is actually killing the planet and putting our future in jeopardy, ” he said.
“It’s a good sign, I think the National Energy Board gained back some credibility by doing that.”
Mayrand said he doesn’t think more oil will be transported through Montreal by train if the Energy East pipeline is cancelled.
Another pipeline, Line 9B, already brings about 300,000 barrels of oil to Montreal refineries every day, enough oil to meet Quebec’s needs, he said.
“It’s not pipelines or trains, it’s one way or another way and we certainly don’t want it to go through Montreal,” he said.
But Germain Belzile, a senior associate researcher at the Montreal Economic Institute, a promarket think tank, said he believes if the pipeline doesn’t go ahead oil shipments by rail will increase.
“Absolutely, oil is going to get out of Alberta by other means, if we have fewer pipelines, we’ll use rail and truck more. It’s been proved pipelines are the safest way to ship oil and we’ve seen that with Lac-Mégantic, Quebec,” he said.
Shipping oil by truck or rail also leads to more greenhouse-gas emissions, he said.
Cancelling the pipeline won’t lead to a reduction in oil production, Belzile said, instead it will only bind Canada’s oil industry more tightly to a single customer, the United States, which also happens to be a competitor.
There could also be effects for Quebec’s economy.
“In the short run, the project is supposed to create several thousand jobs,” said Norma Kozhaya, the economist in chief at Quebec Employer’s Council. The project would also generate revenue for governments.
If the project is cancelled, she said, “it will send a bad signal in the economy, both in Quebec and in Canada in general,”
The MEI’s Belzile has a similar view. Environmental reviews are becoming more political, he said, and changes, like the NEB’s decision to consider upstream and downstream effects, made during the review process create uncertainties that could chase other resource sector investments away.
Belzile does agree with the environmentalists about one thing — the future chances of the pipeline itself.
“It’s possibly the first step in abandoning the project entirely, I’m usually pretty optimistic, but it’s not the case right now,” he said. “I think, in fact, the project is probably doomed unless there are serious changes coming from the federal government.”