Pipeline company TransCanada said Thursday it’s cancelling a plan to build a pipeline that would ship 1.1 million barrels of oil per day from Western Canada to the Atlantic coast.
TransCanada Chief Executive Officer Russ Girling said in a statement that “after careful review of changed circumstances, we will be informing the National Energy Board” it won’t go ahead. He didn’t specify reasons but Alberta’s oil sands growth has slowed with the decline in the price of oil and there was stiff environmental opposition in Quebec.
Girling had previously called the pipeline a historic opportunity to connect the oil resources of Canada’s west to eastern consumers. He’d noted the oil could be shipped to the U.S. Eastern Seaboard, Asia and Europe.
Supporters said the pipeline was necessary to decrease reliance on the U.S., which takes 97 percent of Canada’s energy exports. Alberta has the world’s third largest oil reserves, with 170 billion barrels of proven reserves.
Montreal Mayor Denis Coderre, who has opposed the pipeline on environmental grounds, said he was thrilled to see it abandoned. Calgary, Alberta, Mayor Naheed Nenshi sarcastically said he loved the fact that Montreal’s mayor was celebrating the loss of Canadian jobs.
When TransCanada first announced the project in in 2013 oil prices were neared a $100 a barrel, but are now about half that.
Conservative opposition deputy leader Lisa Raitt called it a terrible day for Canada and blamed Prime Minister Justin Trudeau for not championing the nation-building project and the nation’s energy sector. “Everything Justin Trudeau touches becomes a nightmare,” Raitt said.
Last year, Trudeau approved one controversial pipeline from the Alberta oil sands to the Pacific Coast, but rejected another. Trudeau approved Kinder Morgan’s Trans Mountain pipeline to the Vancouver suburb of Burnaby, British Columbia, but rejected Enbridge’s Northern Gateway pipeline to Kitimat, British Columbia. His government has been trying to balance the oil industry’s desire to tap new markets with environmentalists’ concerns.
Natural Resource Minister Jim Carr called the TransCanada’s decision to end the Energy East pipeline a business decision.
“Conditions have changed,” Carr said. “Commodity prices are not what they were then.”
TransCanada put its application on hold in September after the National Energy Board said would use a tougher review process that would include looking at indirect emissions related to the pipeline, from production to end use of the oil. The company warned then that it could cancel the proposed 4,500-kilometre (2,800 mile) oil pipeline from Hardisty, Alberta, to Saint John, New Brunswick, which would have been most expensive project in TransCanada’s history.
Carr noted TransCanada’s Keystone XL pipeline to Texas Gulf Coast refineries awaits some final approvals in the United States.
International oil companies ConocoPhillips and Royal Dutch Shell have sold Canadian oil sands assets this year. The costs to develop the oil sands, a type of unconventional petroleum deposit, are much higher that developing conventional oil deposits.
Alberta Premier Rachel Notley said she was deeply disappointed with TransCanada’s decision.
“We understand that it is driven by a broad range of factors that any responsible business must consider. Nonetheless, this is an unfortunate outcome for Canadians,” she said.
Source: Associated Press