TransCanada kills $15.7B pipeline due to ‘substantial uncertainty’
CALGARY (CP) — TransCanada Corp. says it is cancelling its $15.7-billion proposed Energy East pipeline because of “substantial uncertainty” caused by a regulatory panel’s decision to include upstream and downstream emissions in its assessment of the project.
CEO Russ Girling cited non-specific “changed circumstances” for the decision in a brief news release Thursday morning, without giving further explanation.
But in a letter to the National Energy Board posted Thursday on the NEB website, TransCanada says it’s halting the project because of a National Energy Board panel’s decision in September to allow hearings to consider greenhouse gas emissions from producing and processing the oil it transports in the pipeline, an unprecedented expansion of the scope of the inquiry.
In the letter, it said despite offers from the province of New Brunswick and the federal government to cover the cost of the analysis, it creates “substantial uncertainty around the scope, timing and cost associated with the regulatory review” of Energy East and the associated Eastern Mainline projects.
“After completing its careful review of these factors, the existing and likely future delays resulting from the regulatory process, the associated cost implications and the increasingly challenging issues and obstacles facing the projects, the applicants will not be proceeding further with the projects (which would include not constructing the proposed marine terminal in New Brunswick),” the company’s letter says.
“The applications for the projects are hereby formally withdrawn.”
The decision comes a month after TransCanada asked the NEB to put regulatory hearings on hold.
“It’s a blow. It’s being portrayed as a business decision, but it’s more than that,” said Chris Bloomer, CEO of the Canadian Energy Pipeline Association, adding the decision means about 400,000 barrels per day of foreign oil will continue to be imported into Eastern Canada.
“It really is a result of this constant, and I’ll say this, drip, drip, drip of regulatory uncertainty that are impacting these kinds of infrastructure decisions.”