Hey there, time traveller!
This article was published 10/10/2017 (1310 days ago), so information in it may no longer be current.
Depending on who you were listening to, last week was either a wonderful or a horrible time for Canada.
More specifically, last week’s cancellation of the Energy East pipeline project by TransCanada Corp. represented a huge victory for the nation’s environmental-activist community and a major setback for the petroleum sector and the affiliated construction firms and service providers that would have been involved in building the pipeline.
TransCanada CEO Russ Girling offered less-than-detailed reasons for halting the $15.7-billion project, citing only "changed circumstances" in last Thursday’s announcement; in a letter sent earlier in the week to the National Energy Board, however, TransCanada stated it was halting the project because of the NEB panel’s decision to include all upstream and downstream greenhouse-gas emissions in its assessment of Energy East.
There is, not surprisingly, more to the demise of Energy East than concerns about increased environmental scrutiny. Market forces played a major role in TransCanada’s decision; simply put, the economics of the pipeline became substantially less appealing between the time the project was announced in 2013 and the moment the company pulled the plug last week.
The oil sector was booming in 2013, when the price of crude oil hovered above $100 per barrel. After peaking at nearly $120 in mid-2014, the price plummeted to as low as $42 last year before rebounding to its current level of just over $60.
Combine that price drop with the Trump administration’s revival of the southbound Keystone XL pipeline, which had been delayed and eventually blocked by former president Barack Obama, and the business case for Energy East became much less sound. The ability to move massive amounts of petroleum to the southern U.S., as well as to the western markets that will be made available by the hotly contested Trans Mountain pipeline, removed much of the urgency that was driving the effort to pipe crude to Canada’s east.
The 4,500-kilometre pipeline — which, necessarily, would have crossed Manitoba — would have moved 1.1 million barrels of oil daily from Alberta and Saskatchewan to refineries in Montreal and Saint John.
The cancellation sparked intense celebration and condemnation across the country, including Alberta Premier Rachel Notley’s observation that losing Energy East is "an unfortunate outcome for Canadians" and Saskatchewan Premier Brad Wall saying "it is a very bad day for the west."
Environmentalist Patrick DeRochie, on the other hand, said the cancellation shows that "new tar sands pipelines don’t make sense... in a world that is addressing climate change and moving away from fossil fuels."
Manitoba was, both literally and figuratively, stuck in the middle of the Energy East upheaval. Benefits to this province would have been limited mostly to approximately 500 construction and maintenance jobs, but environmental concerns were raised by the proposed pipeline’s proximity to the aqueduct that carries Winnipeg’s water supply from Shoal Lake.
The cancellation’s limited impact on Manitoba was best summarized by the reaction of Premier Brian Pallister, who is no stranger to disagreements with the Trudeau government. Last Thursday, Mr. Pallister offered "some very real sympathies" for Energy Minister Jim Carr’s difficult situation, while at the same time expressing an appropriately conservative-minded disappointment that the nation has lost a major economic opportunity.
If this province’s Progressive Conservative premier is sending supportive wishes to a federal Liberal, that’s a sure sign Manitoba is largely unharmed by last week’s oil-pipeline unravelling.