New Energy East memo reveals conflicting government views on pipeline’s value

Natural Resources Canada takes different tack from Finance Department on economic impact

CBC News | July 14 | Canada’s oil pipelines are already operating to their full potential and the Energy East project is well-positioned to meet the country’s projected need in increased capacity by 2020, according to a briefing memo to Natural Resources Minister Jim Carr obtained by CBC News.

“Absent this capacity, more oil will be shipped by rail, and some production will be restricted,” reads the document, dated Feb. 15, 2016.

Read the full memo

The memo was released under an access to information request and largely contradicts an earlier finance department memo, obtained in the same way, which suggested Canada already has sufficient capacity between

Andrew Leach, an energy and environment economist at the University of Alberta’s school of business, said he’s more inclined to trust the analysis in the memo sent to Carr.

“[Natural Resources] Canada is traditionally the department where you have the most expertise in studying the ins and outs or nuts and bolts of crude oil markets,” he said.

“So it wouldn’t be surprising for them to have more detail on the specific attributes of the market.”

Implications for Energy East

Canada’s total oil production is expected to reach 4.9 million barrels per day by 2020, according to the memo, up from 3.9 million in 2014.

The document highlights the Energy East pipeline as being well-suited to meet those future capacity needs, given its projected capacity of 1.1 million barrels per day and potential in-service date of 2020 to 2021.

READ FULL STORY

By Robson Fletcher, CBC News Posted: Jul 14, 2016 4:00 AM MT Last Updated: Jul 14, 2016 9:46 AM MT as posted at http://www.cbc.ca/news/canada/calgary/energy-east-value-jim-carr-memo-pipeline-capacity-1.3677473

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