Irving Oil Says Decision to Cancel Energy East Is a Lost Opportunity

Allan Goodman
October 6, 2017

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.

"Justin Trudeau and (Natural Resources Minister) Jim Carr stood behind a climate review for Energy East, and that's admirable, but it also makes me wonder why they don't have the same concerns about Kinder Morgan, a pipeline they approved without considering the climate impact", read her emailed comments.

When TransCanada first announced the project in in 2013 oil prices were neared a $100 a barrel, but are now about half that. 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.

In the meantime, Saskatchewan Premier Brad Wall expressed disappointment with Quebec's decision to seek an injunction over the Energy East pipeline.

Environment Minister David Heurtel said TransCanada didn't have much choice but to scrap the project, saying he believes the company realized numerous elements weren't in place successful conclusion of the project.

"TransCanada knows that Energy East would never receive approval if all its climate pollution was taking into account", Adam Scott, a senior campaigner with Oil Change International, a nonprofit research and advocacy group that looks at the impacts of fossil fuels, told ThinkProgress. It would've carried 1.1 million barrels of oil per day from Alberta and Saskatchewan to eastern Canadian refineries if built.

But the company in recent years has dealt with a fall in the price of crude oil, which is now hovering around $50 a barrel, down from almost $100 a barrel in mid-2014.

"We are deeply disappointed by the recent decision from TransCanada", Notley said in a statement. Nothing has changed in the Government's decision-making process.

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The company said Thursday it was abandoning the project after a "careful review of changed circumstances".

"We still believe that", Gallant said.

The Calgary-based company (TSX:TRP) had announced last month that it was suspending its efforts to get regulatory approvals for the mega projects.

Quebec politicians, along with Indigenous and environmental groups, welcomed the project's demise, branding it as a harbinger of the inevitable death of fossil fuels and a reminder of the need for further green energy development.

Jean, one of two UCP MLAs in the oil heartland of Fort McMurray, also pointed his finger at Notley and the provincial government.

October 8, 2015: Environmental group Environmental Defence says the National Energy Board is rushing the process for Energy East by gathering oral traditional evidence from aboriginal bands before it has received a complete application.

New Brunswick Premier Brian Gallant says the announcement is not good news for his province.

RBC Capital Markets analyst Robert Kwan said in a report the news was "neutral" from an investor point of view because of market skepticism that the project would proceed.

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