Regulation driving energy projects out of Canada, report says

OTTAWA — Natural Resources Minister Jim Carr says the federal cabinet was never going to include downstream emissions as a factor when it reviewed the application for the now defunct Energy East pipeline.

In a bid to stem political fallout from Energy East’s demise, Carr is on a mission to convince Canadians his government’s policies are not to blame for it. But a new research report suggests the project is just part of a trend of energy investment going elsewhere because of the high cost of additional government regulation in Canada. TransCanada cancelled the Energy East project last week citing “changed circumstances.”

In response to a barrage of questions lobbed at him in the Senate on Tuesday, Carr repeatedly asserted those circumstances were not government policies.

“The situation had changed dramatically,” he said, pointing to oil prices less than half what they were when the project was first proposed, and the recent U.S. decision to go forward with another TransCanada project, the Keystone XL pipeline.

Opponents blame Carr’s government for changing the review process and including things like upstream and downstream emissions – that is, greenhouse gas emissions created by extracting the oil before it flows through the pipeline and those create by refining and burning it after it leaves the pipeline – as part of the evaluations of proposed projects. While the National Energy Board panel decided to look at both upstream and downstream emissions, Carr said the government had only asked that upstream ones be looked at.