Winnipeg Free Press - PRINT EDITION

West-east oil pipeline picks up steam

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SAINT JOHN, N.B. -- A proposal to transport Alberta oil as far east as New Brunswick took a step forward Tuesday as TransCanada Corp. (TSX:TRP) announced it was seeking binding commitments from shippers before determining whether there is a business case to proceed.

The Calgary-based energy company said it is trying to determine whether there is enough interest in the idea, which would involve converting an existing 3,000-kilometre natural gas pipeline so it could carry crude into Quebec.

The Energy East Pipeline project could also see a 1,400-kilometre extension that would ship oil into the port city of Saint John, N.B., home to the Irving Oil refinery, Canada's largest.

Proponents of the development say it would bring jobs and reduce Eastern Canada's dependence on foreign oil, thereby increasing the country's energy security. But critics say they are worried about potential environmental damage, pointing to the rupture Friday of an ExxonMobil pipeline in Arkansas.

"This would be a very old pipeline built to carry natural gas, not diluted bitumen, and you could have major spills," said Keith Stewart, the climate and energy campaign co-ordinator for Greenpeace Canada.

"This goes through some very remote areas, but it also goes through populated areas."

Federal Natural Resources Minister Joe Oliver, who has backed the project, said such concerns are unfounded and don't take into account the need to increase Canada's access to lucrative markets abroad.

"If you follow their logic to its conclusion... what they're saying, I guess, is that they don't want to see any pipelines built," Oliver said in Ottawa.

"If we do not build pipelines, the oil will be stranded and all the potential economic benefits that would flow from that would be lost."

Oliver welcomed TransCanada's announcement, as did New Brunswick Premier David Alward, who held a news conference at the Irving Oil refinery to express his support.

"A west-east pipeline will strengthen Canada's economy and stimulate new growth in jobs in every region and every community of our province," Alward said.

"But we must not forget that this is a critically important project that will benefit all Canadians."

The idea of shipping oil eastward has also enjoyed the support of Alberta Premier Alison Redford, who met with Alward in February to discuss it.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition April 3, 2013 B5

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