In controversy over Energy East demise, balance is elusive

Oct. 6, 2017
In controversy following TransCanada PipeLines Ltd.’s scrapping of the planned Energy East Pipeline, balance is elusive.

In controversy following TransCanada PipeLines Ltd.’s scrapping of the planned Energy East Pipeline, balance is elusive.

Blame doesn’t all go to a decision by the National Energy Board to consider in its environmental assessment greenhouse gas emissions upstream and downstream of the project.

When TransCanada announced the decision to kill its 2,800-mile Energy East crude oil project and a gas-line proposal in Ontario, it cited “changed circumstances.”

That phrase certainly encompasses business conditions sharply different from when the company advanced plans in 2013 for a system to pipe Alberta crude to Canada’s East Coast.

Crude prices since then have dropped by half. Investment has plummeted. Forecasts of oil-sands production growth have flattened.

Meanwhile, three other projects have been approved that, if built, might obviate Energy East’s 1.1 million b/d of capacity.

It was doubt about one of them, TransCanada’s Keystone XL proposal, that made Energy East appealing. Thanks to US President Donald Trump, Keystone XL might yet be completed.

Still, attributing TransCanada’s decision solely to a weakened business case is mistaken.

Amarjeet Sohi, Liberal member of Parliament for Edmonton Mill Woods, did just that.

Asserting TransCanada’s decision stemmed from the company’s “business analysis,” he told an Edmonton Sun reporter: “It has nothing to do with the federal government review process.”

Sohi, the infrastructure minister, told Global News television the government applied to Energy East “the same criteria” it used to approve Kinder Morgan’s Trans Mountain expansion and Enbridge’s Line 3 replacement. “The process for evaluation has not changed at all.”

In fact, the NEB did not evaluate indirect GHG emissions in those projects and, at least with Trans Mountain, specifically rejected requests that it do so.

In an Oct. 5 letter to the NEB, TransCanada emphasized the NEB’s policy shift and cited likely future delays and associated costs along with “increasingly challenging issues and obstacles facing the projects.”

On any list of issues and obstacles facing Canadian oil and gas projects nowadays, the federal government regrettably ranks quite high.

(From the subscription area of www.ogj.com, posted Oct. 6, 2017; author’s e-mail: [email protected])