Published: Fri, October 06, 2017
IT | By Amos Hawkins

Facing tougher regulations, TransCanada scraps $12 billion oil pipeline

Facing tougher regulations, TransCanada scraps $12 billion oil pipeline

Energy East would have provided Canadian oil producers with access to buyers in India, one of the fastest-growing markets for petroleum, because shipping there is faster from Canada's Atlantic Coast than from its Pacific Coast, said Tim McMillan, chief executive officer of CAPP.

"Under Prime Minister Trudeau, the Energy East and Northern Gateway pipelines have disappeared", reads a statement from his campaign.

Alberta Premier Rachel Notley said Thursday that now Energy East is dead, there is an even greater urgency in completing the Trans Mountain project to diversify the industry's export markets beyond the United States.

"Number 1 is actually pretty legit, which is TransCanada now has to go full bore on Keystone XL", he said.

"Given increasing public interest in GHG emissions, together with increasing governmental actions and commitments (including the federal government's stated interest in assessing upstream GHG emissions associated with major pipelines), the Board is of the view that it should also consider indirect GHG emissions in its [National Energy Board] Act public interest determination for each of the Projects".

The project has opened deep rifts in political circles, with New Brunswick and Alberta premiers expressing disappointment Thursday and Quebec politicians like Montreal Mayor Denis Coderre celebrating its demise.

Saskatchewan Premier Brad Wall said Ottawa is ultimately to blame for TransCanada's decision to cancel its proposed Energy East Pipeline and says the government's actions have undermined national unity.

"The economic benefits of the Energy East pipeline have never been added to our economic and fiscal projections", he said.

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Energy East would have carried oil from Alberta and Saskatchewan to refineries on the east coast for processing, and shipment overseas.

Citing "changed circumstances" company President Russ Girling says they will be informing the National Energy Board of their plans to cancel the project.

He said that companies like TransCanada and Petronas have opportunities to invest in other jurisdictions and, for both companies, investment elsewhere looked more attractive given the constant changes to Canada's regulatory structure.

Last month the company revealed that it was suspending efforts to get regulatory approval.

"I think the federal government has erred there and I think it's incumbent on the Trudeau government to come clean on what they want the NEB to do so that we don't make this mistake in the future as well", Nenshi said.

"What we are seeing in our numbers now is an evolution of opinion: concerns about climate change have deepened, and belief that the world is going to transition away from oil has grown". The company said back then that it wanted to review the National Energy Board's August decision to toughen the pipeline project assessment procedure.

TransCanada is expected to take an estimated $1-billion charge on its pre-tax fourth-quarter earnings due to Thursday's announcement.

The Nebraska Public Service Commission is reviewing the Keystone XL plans and has until November 23 to decide whether to approve or deny the project.

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