Environmentalists, the National Energy Board, the mayor of Montreal, native protesters and the resurrection of the Keystone XL Pipeline with U.S. President Donald Trump’s backing, all helped kill the Energy East pipeline project back in 2017.
But as Chris Varcoe wrote in the Calgary Herald in early October, 2017, it was probably a combination of many things that halted the pipeline project:
Was it a precipitous drop in oil prices creating uncertainty for future production?
Or the opposition of Montreal Mayor Denis Coderre — who claimed an “enormous victory” … — along with municipal and First Nations leaders in Quebec who vowed to derail the venture over environmental concerns?
Was it the collapse of National Energy Board hearings in August 2016, leading to deepening questions about the process in the months ahead?
Was it the decision by the new Trump administration to grant a presidential permit to the once-dead Keystone XL line that would move more Canadian oil to the U.S. Gulf Coast?
Or was it the new NEB panel and its decision two months ago to consider the project’s upstream and downstream greenhouse gas emissions, putting another barrier in place?
The answer is yes to all of the above, with the death knell finally delivered by the recent NEB panel move.
But now there’s renewed hope.
A Canadian Press story from Kevin Bissett told the news this way:
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.
Bissett quoted Higgs saying this: “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.”
But there are a lot of other reasons for trying to revive this project. Media Planet suggests the project could mean thousands of jobs and a much-needed boost to local economies along the pipeline’s route.
“The proposed Energy East pipeline could prove to be the infrastructure project that gives Canada’s economy the kick-start it needs. Energy East is expected to create $36 billion in additional Gross Domestic Product (GDP) by 2040,” Media Planet reports.
The pipeline project, which will convert 3,000 km. of existing natural gas pipeline to crude oil service and will include the construction of 1,600 km. of new pipeline, has the potential to offer huge social and economic benefits to Canadians across all provinces and territories, the Media Planet adds.
“This is a nation-building project, no doubt about it,” says John Telford, Director of Canadian Affairs at The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (UA).
An Energy East executive explains it this way: “The Energy East project is going to provide upwards of 13,690 full-time equivalent direct and indirect jobs over the course of the seven-year construction and development phase of the project,” explains John Soini, Vice-President of Energy East. “There will also be about 900 direct and 2,400 indirect jobs created during the 20-year operational cycle of Energy East.”
But the project still has one major hurdle to overcome—Quebec.
“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,” CTV News reports.
But Higgs thinks the project has renewed hope.
“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.
Conservative Leader Andrew Scheer has already indicated he wants the project revived. And Alberta Premier Rachel Notley told CTV restarting the project makes sense.
“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,” she said.
And there you have the major reason this project needs to be revived. Why should Canada be importing foreign oil when it has plenty of oil of its own?
Matt Rockey, Okotoks Western Wheel publisher, asked just that question last August.
“Canada imported over 35.5 million barrels of oil from Saudi Arabia in 2017, according to stats released by the National Energy Board,” Rockey wrote. “We also imported oil from the United States, Azerbaijan, Norway, Nigeria, United Kingdom, Angola, Russia, Colombia, Kazakhstan, Oman, Trinidad and Tobago, Ghana, and the Ivory Coast.
“We have more than enough oil reserves in Canada to eliminate our need to import oil,” Rockey wrote. “Even though we have some of the best, if not the best, environmental standards and practices in the world, the environmental and foreign oil lobbyists have convinced us to continue importing oil from places like Saudi Arabia and Russia.”
He ended his commentary this way:
“All of the opposition that helped kill the Energy East pipeline seemed foolish to me at the time but now the consequences of our decisions seems far more serious.”
He’s right, you know. There’s no need for Canada to import oil. So let’s get going. Let’s revive the Energy East Pipeline. Let’s create the thousands of jobs, which were promised when this project was first announced. Let’s move the hundreds of thousands of barrels of oil that currently can’t be moved and are sitting in storage.
The lack of pipelines to move Alberta’s oil to market is becoming a crisis. Alberta Premier Rachel Notely took action Sunday.
“Alberta’s premier is imposing industry-wide oil production cuts in the Canadian province,” Rob Gillies of the Associated Press wrote in the Financial Post. “Premier Rachel Notley announced Sunday that output will be lowered 325,000 barrels a day in January to address a storage glut that she blames on a lack of pipelines. The government says the reduction will be evaluated monthly.
Alberta produces 3.7 million barrels of oil a day, but that is 190,000 barrels more than can be shipped. About 35 million barrels are sitting in storage, and the oversupply results in the province’s crude selling for around $10 a barrel, a fraction of what other world producers get.
Notley says Canada’s economy is losing $80 million Canadian a day.
So, it’s becoming increasingly important that Alberta find a way to get its oil to markets in Eastern Canada and beyond. And reviving the Energy East pipeline project is one of the most immediate ways to address that problem.
The Energy East Pipeline Project should be revived.
The federal government should join together with the provincial governments along the route of this pipeline project and get the job done.
New Brunswick’s premier is onside, Alberta’s premier is onside. And Ontario Premier Doug Ford indicated he was onside with a mention in the fall economic statement.
So let’s get done!
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