Energy East is a pipe dream in a carbon-constrained world

While pipeline proponents blame a more stringent regulatory process for TransCanada’s request to suspend Energy East’s review, the real reason is simple: The pipeline does not make economic sense when the tar sands won’t be growing to produce enough oil to fill it.

Earlier this month, TransCanada requested a 30-day suspension in the National Energy Board review of its proposed Energy East pipeline. The company says it needs more time to examine the impact of changes to the NEB review process – including consideration of climate policies and greenhouse gas pollution – to the project’s cost, timing and viability. TransCanada also suggested it was contemplating backing out of Energy East altogether.

Queue the shock and outrage.

Suddenly the NEB, a federal body that has recommended the approval of every single crude oil pipeline it has reviewed, is subjecting Energy East to “regulatory overreach.” Pipeline backers claim the federal government is using the NEB to create regulatory uncertainty and strangle Canada’s oil industry. One critic went so far as to say Energy East shows that Canadian federalism itself is not working.

This is nonsense.

Yes, the NEB panel reviewing Energy East ruled that, for the first time, it would consider the upstream and downstream greenhouse gases associated with the pipeline and the impact of laws and policies to reduce pollution on the economic need for the pipeline. This assessment is within the NEB`s jurisdiction. It’s a sensible move to ensure Energy East doesn’t become a stranded asset in tomorrow’s low-carbon economy. And it’s something Canadians have demanded of pipeline reviews for years.

But let’s not pretend this additional NEB requirement is what’s leading pipeline giant TransCanada to reconsider Energy East. The company is simply seeing the writing on the wall and acknowledging that Energy East is a bad idea during a time of declining investment in the tar sands, North American pipeline overcapacity and unstoppable transition to renewable energy.

Investment in the tar sands is drying up and the big multinational oil players have already fled. As the world moves to tackle climate change, the dirtiest, most expensive, most difficult oils to extract and transport – such as the tar sands – can no longer compete for capital. Even pro-industry analysts acknowledge Energy East is too risky because there won’t be enough oil production to fill the pipeline.

In fact, the need for already-approved pipelines is doubtful. TransCanada can’t even find enough tar sands producers to fill Keystone XL. The “Asian markets” that supposedly justify Kinder Morgan’s pipeline expansion to Canada’s West Coast remain elusive. Just this week, the Minnesota Department of Commerce found that Enbridge’s Line 3 to bring more tar sands oil to the United States is not needed.

At the same time, massive oil markets, such as France, Britain, Germany, China and India have announced or are considering a ban on the internal combustion engine, which will slash global demand for oil. Pipeline projects such as Energy East will become stranded assets in a world of declining demand for oil.

Energy East is a bad idea for a lot of reasons. It would put the drinking water of Canadians across six provinces at risk of an oil spill. It would fail to respect Indigenous rights and title. It would put the Bay of Fundy at greater risk of a tanker spill. It faces massive opposition from Canadians along the pipeline route. And it is incompatible with Canada’s targets to reduce GHG emissions and the Alberta emissions cap. Canadians deserve credit for raising their voices on these issues.

But the cold, hard reality is that there’s no economic need for Energy East in a world that’s moving away from oil and rapidly transitioning to a clean economy.

TransCanada should do us all a favour – including its own shareholders – and pull the plug on Energy East.

As posted at

Patrick DeRochie is the climate program manager, Environmental Defence

Energy East all but dead: industry experts

Telegraph Journal | OTTAWA • Energy East is all but dead, say industry experts.

A former TransCanada executive told the Telegraph-Journal in an interview that the pipeline is in jeopardy unless the federal government makes drastic moves in short order to give the company assurances that its $15.7-billion mega-project can clear new environmental hurdles.

With the countdown clock ticking, former TransCanada executive vice president Dennis McConaghy said nothing short of an assurance from Ottawa that an emissions test won’t kill the project is now needed.

“The Trudeau government would have to take the issue of emissions completely out of the hands of the National Energy Board and assume the responsibility of whether Energy East conforms or doesn’t conform to Canadian carbon policy,” McConaghy said. “That’s the minimum thing they would have to do for TransCanada to persevere here.

“Is incremental Canadian oilsands production consistent with Canadian carbon policy or not? They would almost have to indicate the answer they are going to get to for TransCanada to believe it and press on with the regulatory process.”

McConaghy, who worked for the company from 1998 to 2014 and was in charge of putting together the commercial agreements for the proposed Keystone XL pipeline and remains a shareholder with the company, said that he isn’t optimistic that will happen.

Others experts say Energy East’s importance has somewhat diminished with changing oil prices and the U.S. approval of TransCanada’s Keystone XL pipeline, alongside other pipelines that unlock Alberta oil and get it to new markets.

The possibility is also being raised that TransCanada may just decide to downsize its project and forgo its most controversial part: building new pipeline through Quebec and then into New Brunswick.

TransCanada announced earlier this month a 30-day suspension of its application to build Energy East, as it considers whether to abandon the project citing a tougher regulatory review process introduced by the country’s national energy regulator. Ted Morton, a senior fellow at the University of Calgary’s School of Public Policy and a former Alberta minister of energy and of finance, believes that “the project is at extreme risk”for that same reason.

The new environmental test “really opens up a Pandora’s box of policy scenarios and will be used by anti-pipeline activists to clog the process with numerous reports, consultants, expert witnesses – all of which TransCanada would have to reply to,” Morton said.“That means more time, more money and more uncertainty.”

In an open letter to Prime Minister Justin Trudeau, Premier Brian Gallant said that the proposed project is in jeopardy because the National Energy Board has said it would consider indirect greenhouse gas emissions caused by the project.

Gallant then called on the federal government to publicly commit to fund and undertake the greenhouse gas emissions analysis “to avoid added costs and constraints for the project proponent.”

The federal government has since said it’s offered to complete that review.

McConaghy believes Gallant’s letter doesn’t go far enough to explicitly call on Ottawa to remove the climate question from the assessment review.

“He should have said, ‘Of course you’re going to pay for it, and you’re going to take it out of the hands of the National Energy Board.’”

The federal Natural Resources Department has reiterated that its awaiting a response to the offer made to the National Energy Board and TransCanada to undertake the upstream and downstream assessments.

Premier’s office spokeswoman Tina Robichaud responded to Mc-Conaghy’s comments on Friday by saying in an email that “the federal government has been clear that the National Energy Board only makes recommendations.”

Robichaud added that the Trudeau cabinet would make the final decision on the project, noting that the Trans Mountain pipeline was approved “even when considering climate change.”

A new report by the Centre for International Governance Innovation released this week is questioning the need for new pipelines to carry oil to tidewater for export.

Jeff Rubin, a senior fellow at the centre and a former chief economist at CIBC, says in the report that the claim that additional pipeline capacity to tidewater will unlock higher prices is not corroborated by either past or current market conditions.

Rubin says overseas markets pay even lower prices for bitumen than in North America, so there is no economic case for additional pipeline capacity to tidewater or expanded oilsands production. He says international commitments to reduce global carbon emissions over the next three decades will also reduce the size of future oil markets.

“The National Energy Board should consider a rapidly decarbonizing global economy when assessing the need and commercial viability,” Rubin said.

There’s also the continued opposition the project faces.

Quebec Premier Philippe Couillard told the Telegraph-Journal earlier this month that concerns in his province remain.

Colleen Mitchell, president of the Atlantica Centre for Energy, suggested in an interview that TransCanada could consider amending its application to cut out plans to build the pipeline through Quebec and into New Brunswick.

The Energy East project was pitched to convert 3,000 kilometres of existing natural gas pipeline to crude oil. It was then to include the construction of 1,500 kilometres of new pipeline, mostly east of Ontario, which has proved more controversial.

“The original reason that this project was conceived was that the National Energy Board suggested to TransCanada that their natural gas pipeline was underutilized,” Mitchell said. “Originally, it was only going to go as far as Quebec to serve the two refineries there, but then it was expanded to support the New Brunswick refinery and an export market.

“They may go back to re-evaluating how to better utilize that gas pipeline that currently does exist.”

She added: “The original task was ‘let’s get a better return on an existing asset.’”

That option – to terminate the pipeline before it reaches New Brunswick – may have been something that Gallant subtly alluded to in the immediate aftermath of TransCanada’s decision to reconsider the project.

Gallant has said that the company is now considering continuing with the project or stopping it completely, as well as other options in between.

Robichaud has declined to clarify Gallant’s words, stating in an email that “it would be more appropriate” for the question to TransCanada.

The Calgary-based company declined an interview request.

T h e N at i o n a l E n e rg y B o a rd has also decided not to weigh i n u n t i l T r a n s Ca n a d a’ s 3 0 – d ay s u s p e n s i o n e n d s e a r l y next month.

ADAM HURAS LEGISLATURE BUREAU, as posted September 23 at

Trudeau’s plan to kill Energy East without getting caught

Ted Morton: Adding downstream emissions to the Energy East review process opens a Pandora’s box of competing scenarios of end-use possibilities

National Post | The National Energy Board’s (NEB) new conditions for TransCanada’s proposed Energy East pipeline are another signal that the federal government is committed to ensuring the completion of Kinder Morgan’s Trans Mountain pipeline (KMX). What is the connection? To win a second mandate in 2019, the Trudeau government is prepared to sacrifice Energy East to justify the Trans Mountain expansion.

Adding downstream emissions to the Energy East review process opens a Pandora’s box of competing scenarios of end-use possibilities. The no-more-pipelines-ever coalition will seize this opportunity to clog the NEB process with an endless line-up of studies, “experts” and consultants, all predicting disastrous increases in GHG emissions if Energy East is built. For TransCanada, this translates into more time, more uncertainty and more money, which is why it recently requested an immediate 30-day suspension of the hearings.

Adding upstream emissions to the NEB process for Energy East is also a prima facie violation of provincial jurisdiction over the development of oil and gas reserves. It is an attempt to do indirectly through the NEB what Section 92A of the Constitution explicitly prohibits the federal government from doing directly. Section 92A — which grants to provinces explicit jurisdiction of the management and development of their natural resources — is the concession that then Alberta premier Peter Lougheed extracted from the last prime minister named Trudeau at the conclusion of the energy wars sparked by the 1980 National Energy Program. Be assured that, like before, Western premiers will not let this jurisdictional breach go unchallenged.

Trudeau is allowing the NEB to do his political dirty work for him

Trudeau is allowing the NEB to do his political dirty work for him. Undermining Energy East is a transparently political move to shore up the Liberals’ political support in Quebec, the home of 40 of Trudeau’s 183 MPs and where anti-pipeline sentiment is strong. Sabotaging Energy East will also appease his erstwhile climate-change and aboriginal-activist supporters, who are still unhappy about his earlier approvals of Trans Mountain and the replacement of Enbridge’s Line 3 pipeline.

It is a crude but effective political calculus in the run-up to the 2019 federal election. Trudeau will be able to claim a statesman-like balance between his climate-change commitments and the responsible development of Canada’s energy resources. Two pipelines will be built: Trans Mountain and Line 3. And two others will not: Northern Gateway and Energy East. This has been the Liberals’ messaging over the last 12 months — “clean growth” and “balance.” Voters in Alberta and Saskatchewan won’t like it, but — with a combined total of only five Liberal MPs — they are as irrelevant to the Liberals’ next parliamentary majority as they are to the present one.

Critics have suggested that Natural Resources Minister Jim Carr should dismiss the current NEB panel for exceeding its mandate and risking a major constitutional battle between Ottawa and the Prairies. Administrative tribunals like the NEB are supposed to implement policy, not make it. But why would he dismiss a panel that is doing the Liberal government a favour? Or to put the point differently, if Carr does not dismiss this panel, we will all know why.

Ted Morton is a senior fellow at the University of Calgary’s School of Public Policy and at the Manning Centre for Building Democracy. He was formerly Alberta’s minister of energy and of finance.

Special to Financial Post, September 19, 2017 9:16 AM EDT

TransCanada slams the brakes on Energy East pipeline

National Observer | Canada’s second largest pipeline company has sent a message that it’s reviewing whether to abandon a major crude oil expansion project due to stringent new climate change standards proposed by a federal regulator.

In a statement released late on Thursday after the closing of financial markets, Calgary-based TransCanada Corp. said it had asked the National Energy Board to suspend its review of the Energy East and Eastern Mainline projects for 30 days as it studies how a new list of issues to be considered by the regulator might impact project costs.

The NEB announced on Aug. 23 that it wanted to consider the impact of both upstream and downstream greenhouse gases in its review of the pipelines. This is the first time in Canadian history that the federal regulator has proposed in an assessment to review not only the impact of pollution caused during construction and operations of a pipeline, but also the impact of pollution caused by the production and consumption of the oil to be shipped by an operator.

TransCanada sent the NEB a letter asking for a 30-day suspension on its review so that it could calculate the impact of that decision on its bottom line. It also indicated that it was going to stop recording some accounting expenses related to the project, retroactive to the date of the NEB’s recent announcement.

“Due to the significant changes to the regulatory process introduced by the NEB and the request for a 30-day suspension of the applications, TransCanada will cease recording Allowance for Funds Used During Construction (AFUDC) on the projects effective August 23, 2017, being the date of the NEB’s announcement altering the terms of their assessment,” the company said in its statement on Thursday.

The Energy East pipeline is the largest pipeline proposal in Canadian history, and if approved, would ship up to 1.1 million barrels of oil per day from producers in Alberta, Saskatchewan and North Dakota to refineries and marine ports in Quebec and New Brunswick. ​Eastern Mainline is a proposal to add 250 kilometres of new natural gas pipeline facilities and nine compression facilities to an existing natural gas system in southern Ontario.

But the company indicated on Thursday that it was hitting the brakes on Energy East due to the new guidelines proposed by the NEB.

“Should TransCanada decide not to proceed with the projects after a thorough review of the impact of the NEB’s amendments, the carrying value of its investment in the projects as well as its ability to recover development costs incurred to date would be negatively impacted,” the company said in its statement.

By Mike De Souza & Elizabeth McSheffrey in News, Energy, Politics |September 7th 2017, as posted in

NEB acknowledges link between pipelines and climate

Thanks to your support, the NEB announced that it will look at climate impacts when considering the Energy East pipeline project.
The National Energy Board (NEB), a government-appointed body that reviews pipeline proposals, announced yesterday that it will look at climate impacts when considering TransCanada’s massive $15.7 billion Energy East pipeline project. This is a huge step forward in recognizing the climate impacts of the relentless drive for fossil fuels.

You may be thinking this is a no-brainer, of course climate impacts should be considered. But up until now, the NEB refused to take the pipeline’s climate impacts into account.

The crude production needed to fill the Energy East pipeline would generate an additional 30 to 32 million tons of upstream carbon emissions each year — this is equivalent to adding more than 7 million cars to our roads. The downstream emissions would be even higher.

If approved, the proposed Energy East pipeline will send 1.1 million barrels of dirty tar sands crude from Alberta to Nova Scotia where it will be shipped overseas to international markets. The tar sands continue to be Canada’s fastest growing source of greenhouse gas (GHG) emissions and are a huge road block to us meeting our climate change commitments.

It took years of tireless pressure by the Council of Canadians – with the help of supporters like you – working with community groups along the pipeline route and allied organizations, but together we made this great change come about. Thank you!

And while this is a great victory, we can’t let our guard down.

The Energy East pipeline will threaten nearly 3,000 waterways along its 4,400-kilometre path and put the drinking water for millions of people at risk. A spill of toxic tar sands crude would devastate any land or water it touches. And our air quality would be at risk.

In fact, the federal government recently said it would not apply new, tougher air quality rules to the tank farm where the Energy East crude would be stored before it is shipped overseas.

You have been a great advocate in the fight to stop TransCanada’s Energy East pipeline. Can I ask you to take a moment and speak out about this harmful decision that will put people’s health at risk?

Send your letter now – don’t let TransCanada pollute our air!

Thank you for taking action to stop Energy East, a pipeline that continues to be “our risk – their reward.”


Andrea Harden-Donahue
Energy and Climate Justice Campaigner

The Council of Canadians
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In an announcement hailed as a victory for climate and energy campaigners and a setback for TransCanada Corporation, the National Energy Board (NEB) has announced it will consider upstream and downstream greenhouse gas emissions in its upcoming review of the controversial Energy East pipeline.

“I think if the NEB does what they say they’re going to do with any measure of rigour, this project is dead,” Équiterre Senior Director Steven Guilbeault told National Observer.

“The Board is of the view that it should also consider indirect GHG emissions in its NEB Act public interest determination for each of the Projects the NEB wrote in a “letter to interested parties” released late Wednesday. “In considering such indirect GHG emissions, the Board will focus on the quantification of incremental upstream and incremental downstream GHG emissions, as well as incremental emissions resulting from third-party electricity generation.”

But despite a decision Guilbeault described as “another nail in the coffin” for the 4,500-kilometre, 1.1-million-barrel-per-day pipeline, Équiterre “is still calling on the government to freeze its evaluation of the project altogether, until it finalizes the NEB overhaul using recommendations from the panel it appointed,” the Observer notes.

“We are happy with what the new panel has done over the past few months,” Guilbeault said, “but it’s still operating under the rules that were established by the Harper government and that’s a problem for us. I think it’s a problem for a lot of people.”

Environmental Defence agreed that, “by moving forward with the review of the largest, longest pipeline ever proposed in North America using a broken and discredited pipeline regulator, the federal government is inviting the controversy and gridlock it faces right now with Kinder Morgan.” Still, the Toronto-based organization stated, “apparently you can teach an old dog new tricks,” with the NEB agreeing to look into the estimated 30 to 32 megatonnes of upstream and 265 megatonnes of downstream emissions that Energy East would enable each year.

TransCanada declined comment until it had a chance to assess the NEB letter. “We are going to take the necessary time to review the issues list and understand the potential impacts on the project,” said spokesperson Tim Duboyce. But the Canadian Association of Petroleum Producers showed no such reticence, contending that “the ruling allows needless duplication of existing federal environmental protections and will create more delays for builders who will have to submit more information,” Canadian Press reports.

“It’s the signal about the length and complexity of the regulatory process that is becoming concerning here,” said Nick Schultz, vice-president of pipeline regulation. “It is not like any pipeline company can control the emissions on either side of their pipe.” [Editor’s note: Well, no, they can’t. Isn’t that kind of
the point?]

Ecojustice lawyer Charles Hatt said the focus on upstream and downstream emissions has been a long time coming. “This decision culminates years of work by countless individuals and groups that have fought against blinkered, siloed regulatory reviews that only pass the buck on climate change,” he told the Observer’s Elizabeth McSheffrey. “The Board’s decision is both lawful and sensible. Surely it is now self-evident that a pipeline review must consider all potential greenhouse gas emissions and the risk that the pipeline will become a stranded asset in tomorrow’s economy.”

AUGUST 24, 2017


Montreal-based Desjardins Group, North America’s biggest association of credit unions, decided Friday to suspend new investments in energy pipelines, citing concerns about their environmental impact.

The mega-investment house, one of more than two dozen institutions that have helped finance Kinder Morgan’s Trans Mountain pipeline expansion, “temporarily suspended lending for such projects and may make the decision permanent” in September, Reuters reports, citing company spokesperson Jacques Bouchard. “That would likely mean Desjardins would not help finance other major Canadian pipelines projects, including TransCanada Corporation’s Keystone XL and Energy East and Enbridge Inc.’s Line 3,” the news agency notes.

The announcement followed ING Group’s confirmation that it won’t directly finance any of the four pipelines.



TransCanada: Unlikely To Emerge Unscathed

NOTE: the following article is by a writer for an online news feed about financial markets. It is presented as a “for interest” interest opinion piece, and the information have not been verified.


TransCanada is poised to begin construction on the Energy East Pipeline and the Keystone XL Pipeline Expansion in the near future.

Litigation and civil disobedience from Indigenous communities located along the project routes will impede pipeline construction.

Lengthy regulatory delays which have occurred so far have delayed the construction of both projects.

The risk associated with these two projects makes TransCanada an unpalatable near or medium-term investment.

It is a near certainty that TransCanada (NYSE:TRP) will meet ferocious resistance to the construction of the Energy East Pipeline and the Keystone XL Pipeline Expansion from Indigenous communities. It is significantly less certain whether TransCanada will be able to bring either pipeline into operation. The risk created by the construction of these two pipeline projects makes TransCanada an unwise investment.

This article will describe the two pipeline projects and the social and political risks associated with each project. It will be demonstrated that management and investors should carefully weigh the risks associated with the construction of both of these large-scale, controversial infrastructure projects.

Energy East

The Energy East Pipeline, if constructed, will transport 1.1 million BPD of crude oil from Alberta to be refined in Eastern Canada. The project route, outlined in the graphic below, runs through six different Canadian provinces.

Proposed Route for the TransCanada Energy East Pipeline

Source: TransCanada

The Energy East Project has already experienced significant delays associated with activism and regulation. In a possible sign of things to come, in August 2016, protesters stormed the National Energy Board hearings over the Energy East Project and caused the hearings to be cancelled. Another significant setback took place on January 27, 2017 as the National Energy Board decidedthat hearings for the Energy East Project would need to be restarted. This decision will result in substantial delays because the public hearings which had already taken place will need to re-occur. This setback, however, may only be the beginning of the Energy East Project’s troubles.

Jul. 3.17 | About: TransCanada Corporation (TRP)

Jesse Donovan
Jesse Donovan
Small-cap, natural resources, biotech, tech


NEB says Energy Board to open up talks with First Nations

North Bay Nugget | The National Energy Board is hoping to open up the lines of communication with more than 150 indigenous communities including Nipissing First Nation.

The board has launched an initiative to gather input from Indigenous peoples to help shape the hearing process and other engagement activities for the Energy East and Eastern Mainline projects.

Energy East is looking to transport 1.1 million barrels of crude oil per day from Alberta and Saskatchewan to refineries in Eastern Canada and a marine terminal in New Brunswick.

Marc Drolet, communications officer for the National Energy Board, said First Nations communities were contacted individually on how they wanted to host a meeting.

He said the meetings, which will take place over the summer months, will be via video conference, face-to-face meetings and through written communication.

Drolet said the first meeting was held in a First Nations community in Quebec earlier this month.

It’s unclear when the meeting at Nipissing First Nation will take place.

Drolet said he was unaware of any First Nations communities refusing to meet with the board.

“There’s concerns about water protection, water crossing and emergency management. We want to be sensitive to Indigenous traditions and if additional meetings are required, that is fine.”

There has been a lot of public outcry from those against the Energy East project for a variety of reasons, including the potential impact a spill could have on Trout Lake – the city’s local drinking water source, possible spills throughout the pipeline and the challenges of spills during the winter months.

On the opposite side of the fence, Energy East says the project will create thousands of jobs across the country, the oil will be transported in a safe and environmentally responsible manner and it will displace imports to Eastern refineries that currently depend on foreign oil to meet the needs of Canadians.

The National Energy Board stated the federal government has committed to undertake deeper consultations with Indigenous people who are potentially affected by the project and provide funding to support these consultations.

The board is also helping to facilitate expanded public input into the National Energy Board review process including public and community engagement activities.

The Minister of Natural Resources intends to recommend the appointment of three temporary members to the National Energy Board, according to the National Energy Board, as well as assess the upstream greenhouse gas emissions associated with this project and make this information public.

By JENNIFER HAMILTON-MCCHARLES, The Nugget, Sunday, June 11, 2017 5:50:43 EDT PM, as posted at