TransCanada abandons Canada east-west pipeline bid
OTTAWA: TransCanada announced it was abandoning its bid to build an east-west pipeline that would have moved crude from Alberta’s oil sands to refineries on Canada’s Atlantic coast.
The 4,500-kilometre (2,800-mile) Energy East pipeline, which would have carried 1.1 million barrels of oil per day, had presented an opportunity to wean Canada off foreign oil as refineries in eastern Quebec and New Brunswick rely mostly on imports.
But it faced stiff opposition from environmental groups and several municipalities in Quebec concerned about possible spills affecting groundwaters and rivers along its path.
“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East application,” company chief executive Russ Girling said in a statement.
The project – involving the conversion of a natural gas conduit from Alberta to Quebec and the construction of new pipes on the last leg to New Brunswick – was first proposed in 2013 when oil prices were near US$100 per barrel.
But as prices tumbled and regulatory hurdles aimed at protecting the environment multiplied, the business case for Energy East became weaker.
During a lengthy consultation process, tweaks to the C$16 billion (US$13 billion) project were made to try to appease critics, including the scrapping of a marine terminal that would have created an opportunity to export oil to Europe but negatively impacted beluga whale calving grounds in the Saint Lawrence River.
In the end environmental concerns trumped potential economic gains.
Conservative MP Lisa Raitt blamed Prime Minister Justin Trudeau’s tightening of regulations requiring downstream oil and gas greenhouse gas emissions to be considered as part of the approvals process for new energy projects.
These new rules are ‘onerous’ and have created an uneven playing field with foreign oil companies, she said.
“This announcement is not the result of a sudden decision by TransCanada. Instead, this is a result of the disastrous energy policies promoted by Justin Trudeau and his failure to champion the Canadian energy sector,” Raitt said.
“Everything Justin Trudeau touches becomes a nightmare.”
Natural Resources Minister Jim Carr, however, rejected her criticisms, calling TransCanada’s move a ‘business decision’ and pointing to the Liberal government’s approval of two other pipelines under a similar set of criteria.