TransCanada does not foresee major resistance to eastern oil pipe proposal

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The corporate logo of TransCanada Corp.(TSX:TRP) is shown. THE CANADIAN PRESS/HO

CALGARY - TransCanada Corp. does not expect to see a big environmental pushback to its plan to ship western oil eastward, which could come to fruition around 2017, a company executive said Wednesday.

Alex Pourbaix, who is in charge of energy and oil pipelines at TransCanada (TSX:TRP), said 80 per cent of the pipe required is already in the ground.

"Even where we don't have pipeline in the ground, we already have right of way and have relationships with landowners in that part of the world. So I think that's very significant," he said told an investor conference.

Eastern Canadians are also keenly aware of how such a plan would affect fuel prices where they live, he added.

"Right now eastern Canada has the highest refined products prices on the continent," he said.

He added, "it doesn't take a great leap of logic" to conclude that filling eastern refineries with domestic crude is better than importing pricier oil from overseas.

Pipeline proposals to the other side of the country, on the other hand, have been met with fierce resistance, particularly within B.C. where there are concerns that a spill from a pipeline itself, or from supertankers moving through coastal waters could cause dire environmental harm.

Eastern and western attitudes differ when it comes to pipelines, said Pourbaix.

"Unlike B.C., there is a pretty significant long-term tradition of moving oil in that part of the world," he said.

For instance, tankers have moved to and from the Irving Oil refinery in St. John for 50 years.

"Every day, tankers transit up and down the St. Lawrence Seaway and I think everybody also gets the concept that, to the extent we are able to extend a pipeline towards the East Coast, that would have the impact of actually reducing tanker transits, which I think everybody sees as more risky than pipelines."

TransCanada's proposal would involve converting a portion of its part-empty natural gas mainline to gas service with the help of extra pump stations and other tweaks.

The company has deemed the proposal to be economically and technically feasible and has said its customers would be keen to see it built. It intends to more formally gauge just how much support the project has in the coming months.

Taking into account a few years of regulatory review and a few years of construction, Pourbaix said he sees it starting up around 2017.

Enbridge is also looking at shipping western crude east by expanding some of its pipes in the Great Lakes region and reversing the flow of a pipeline that currently runs from Montreal to southern Ontario.

NDP Leader Tom Mulcair said in an interview Tuesday he supports the eastern pipeline proposals, provided they undergo a thorough environmental review.

In contrast, he dismissed Enbridge's $6-billion Northern Gateway pipeline between Alberta and the West Coast as a "non-starter" on environmental grounds and that approving it would be a "historical mistake."

He's also opposed to shipping more raw bitumen south of the border through TransCanada's Keystone XL project because it would mean the loss of Canadian oil processing jobs.

"We think rather than going that way, more to the States, we should take care of our own energy security first," said Mulcair.

"That would be a win-win-win situation — a win for the producing provinces, a win for the companies that have their own ownership of what they've bought or leased and a win for the country because we'd be providing greater energy security for the future."