Minister blasts energy regulator’s ‘historic overreach’ on Energy East

Alberta’s energy minister is calling a decision by Canada’s national energy regulator to consider indirect greenhouse gas emissions in evaluating a multibillion-dollar pipeline an “historic overreach” that could cast a chill over the future of energy development.

Margaret McCuaig-Boyd said it’s inappropriate for the National Energy Board to consider the $15.7-billion Energy East pipeline’s contribution to upstream and downstream greenhouse gas emissions.

“Deciding the merits of a pipeline on downstream emissions is like judging transmission lines based on how its electricity will be used,” she said in a statement Friday, a day after TransCanada Corp. announced plans to temporarily suspend its application to build the proposed 4,500-kilometre pipeline to carry western crude to Saint John, N.B.

“This is not an appropriate issue to include in the review,” McCuaig-Boyd said. “We believe it would be a historic overreach and has potential to impact the future of energy development across Canada.”

NEB spokeswoman Sarah Kiley said typically the board considers direct emissions that result from the construction and operation of a pipeline.

However, she said the board broadened the scope of its review of the Energy East and Eastern Mainline projects due to “increasing public interest” in greenhouse gas emissions and the federal government’s interest in assessing upstream emissions associated with major pipelines.

McCuaig-Boyd said Alberta’s climate plan, cited by Prime Minister Justin Trudeau in his approval of two new pipelines last fall, should satisfy concerns about upstream emissions.

TransCanada said it has filed a letter to the NEB asking for a 30-day suspension for the project so it can study how the NEB’s decision on greenhouse gas emissions will affect “costs, schedules and viability.”

The Calgary-based company is calling the changes to the regulatory process “significant,” and warns that the entire project and related Eastern Mainline pipeline project could be cancelled.

It indicated that it may need to record a writedown of its investment in the project, if it is discontinued.

“Should TransCanada decide not to proceed with the projects after a thorough review of the impact of the NEB’s amendments, the carrying value of its investment in the projects as well as its ability to recover development costs incurred to date would be negatively impacted,” the company said in a statement.