Energy East exposed political divide between energy and environment

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OTTAWA – TransCanada’s decision to cancel the Energy East pipeline project exposed deep divisions across the political landscape on Thursday, highlighting the clash between energy development and environmental protection.

The premiers of Alberta and New Brunswick expressed disappointment over the decision, while the Opposition Conservatives blasted the Liberal government for the “disastrous” energy policies of Prime Minister Justin Trudeau that they said cost jobs and discourage investment.

Quebec politicians, along with Indigenous and environmental groups, welcomed the project’s demise, branding it as a harbinger of the inevitable death of fossil fuels and a reminder of the need for further green energy development.

The political implications for the federal Liberals were mixed. It allowed them to avoid past criticism from environmental groups over other successful pipeline projects, but exposed them to criticism they are soft on job creation and investment.

In a statement, TransCanada would only say “changed circumstances” led to the decision to kill Energy East.

“This is a terrible day,” says Conservative Deputy Leader Lisa Raitt, who claims the pipeline announcement was not a sudden decision, and the prime minister and his government are to blame.

“Today is the result of the disastrous energy policies promoted by Justin Trudeau and his failure to champion the Canadian energy sector,” she argues.

Raitt says new Liberal regulations on Canadian energy projects have forced companies to adhere to standards not enforced in other countries, giving exporters in Venezuela, Saudia Arabia and Algeria a competitive advantage.

But Natural Resources Minister Jim Carr argues this is not about politics, but rather about the changing economic situation.

“There’s additional capacity that has been built and is currently under construction. That is different. Commodity prices are not what they were then.”

He also notes that the government already approved two other projects, the Trans Mountain and Line 3 expansions.

Carr doesn’t believe environmental regulations are to blame, saying this is not a race to the bottom with countries like Venezuela or Saudi Arabia.

Nonetheless, for the economy, thousands of jobs and billions in investment have been lost with the collapse of this project.

Carr points to the Trans Mountain expansion and the Line 3 project, both of which he says represent more than $11.6 billion in investment that will support “thousands” of jobs.

That Trans Mountain approval happens to be under a legal microscope this week as Indigenous and environmental groups and BC cities argue the process failed to take into account the impact the pipeline could have on everything from killer whales to waterways.

The $7.4 billion pipeline, a project by a subsidiary of Kinder Morgan, is aimed at more than doubling the capacity of an existing line between Edmonton and Burnaby, B.C. The $7.5-billion, 1,660-kilometre Line 3 project by Enbridge Inc., meanwhile, would expand an existing pipeline between Hardisty, Alta., and Wisconsin, the goal being to increase export capacity to Chicago, the U.S. Gulf Coast and eastern refineries in both countries.

“Our government would have used the same process to evaluate the Energy East pipeline project that saw the Trans Mountain expansion and Line 3 projects approved,” says Carr. “Nothing has changed in the government’s decision-making process.”

There are signs of growth in the energy sector despite “market challenges” fostered by the persistently low price of oil, he adds.

“Canada is open for business. We offer a stable and predictable investment climate, world-class energy reserves, proximity to global markets, a skilled workforce and enabling services and technology.”

Energy East had been proposed as a way to move Alberta oilsands production as far east as an Irving Oil operation in Saint John, N.B.

Supporters say Energy East was necessary to expand Alberta’s markets and decrease its dependency on shipments to the United States. Detractors raised questions about the potential environmental impact.

Calgary-based TransCanada (TSX:TRP) had announced last month that it was suspending its efforts to get regulatory approvals for the mega projects.

It will now inform the federal and provincial regulators that it will no longer be proceeding with its applications for the projects.

“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications,” CEO Russ Girling said in a statement.

He added that TransCanada will also withdraw from a Quebec environmental review.

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