New N.B. premier hopes to bring Energy East pipeline back from the dead
Published Sunday, December 2, 2018 12:36PM AST Last Updated Monday, December 3, 2018 8:27PM AST
FREDERICTON -- New Brunswick's new premier is trying to revive the Energy East pipeline -- even though the original proponent says the project is dead.
TransCanada Corporation abandoned the $15.7-billion project more than a year ago, after the National Energy Board modified the environmental assessment process.
But Premier Blaine Higgs, along with some other premiers and federal politicians, are again pushing the proposed pipeline as a way to get more western crude to refineries in Eastern Canada and for export to foreign markets.
Ontario and Quebec have also new elected new premiers this year, and Higgs said he thinks Energy East could be viable.
"The fact that Ontario has said they're not opposed to oil coming through the province, there's a hurdle that's now gone. We know that Manitoba and Saskatchewan are fine and we know Alberta is looking for a way out," said Higgs.
"We see Alberta now taking a strong position with buying rail cars and saying we've got to get our oil to market because they're losing $80 million a day."
Higgs said he recognizes Quebec could still be a hurdle and he plans to discuss the project with Premier Francois Legault this week at a first ministers meeting in Montreal.
"We're talking about interprovincial trade. There are some key issues, and that's one for us. It's one that's important for our province. We need some wins," Higgs said.
Higgs said he discussed Energy East two weeks ago with Prime Minister Justin Trudeau. He said Trudeau said he'd be willing to discuss the issue again if Higgs was able to get Quebec onside.
But the biggest hurdle may be getting TransCanada interested again. The company cited the regulatory changes and "changed circumstances" as the reason for its pullout last year.
In a statement, Terry Cunha, manager of communications for TransCanada, said their position had not changed.
"We have no plans to revisit the project. We are focused on developing the more than $36 billion in commercially secured pipeline and power generation projects that we currently have underway across North America, including Keystone XL and the Coastal GasLink project in B.C.," he wrote.
Higgs said he's not surprised by the Calgary-based company's position.
"If you spend $800 million and you get jerked around politically so that decisions aren't made, instead it's procrastinated on, and ... then all of a sudden the rules change mid-stream and then you don't have any path forward," Higgs said.
"I don't blame them. I wouldn't jump on the bandwagon yet either."
However, Higgs said he believes if a holding company was formed that applied to the National Energy Board and got the process well underway, then TransCanada might be willing to get back onboard.
Federal Conservative Leader Andrew Sheer has also been a big Energy East supporter and has said that a federal Conservative government would seek to revive the project.
Alberta Premier Rachel Notley said last week restarting the project makes a lot of sense.
"Our government would be very interested of course in any effort that was geared towards another project to get our product to tidewater as well as to supply the Canadian market if we could find a way to do that more effectively," she told reporters in Ottawa.
"Quite frankly it is quite perverse that we are selling our oil in Alberta for $10 a barrel and then in eastern Canada we are importing from places like Saudi Arabia. This makes no sense."
Energy East would have seen much of the western crude going to the Irving Oil refinery in Saint John.
Higgs said he has yet to discuss reviving Energy East with Irving, where he worked for more than three decades and retired as a senior executive before entering politics.
"I know their interest would still be there because they would offset at least 100,000 barrels a day of foreign crude, maybe more. That commitment would still be there because they are still in operation and they are still buying foreign crude," he said.
But New Brunswick Green Leader David Coon said Higgs needs to switch 180 degrees -- and instead look at reducing dependence on fossil fuels.
"The World Meteorological Organization just announced a study that if we continue to follow the path we're following now we are going to blast past the Paris agreement and get into three to five degrees of warming, which is catastrophic," he said.
But a study by the Canadian Energy Research Institute -- released in January -- concluded that refineries in central and Atlantic Canada would see lower supply costs and lower greenhouse gas emissions if they bought more Canadian crude oil.
The study found that substituting Canadian oil wherever possible using space on existing pipelines, rail cars and ocean tankers would result in a 47-per-cent reduction in foreign oil imports into Eastern Canada, saving $210 million per year, and the equivalent of more than two million tonnes of carbon dioxide, or about 5.7 per cent.