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TransCanada drops tanker port In bid to satisfy opponents, partners, company drops plan for marine terminal from Energy East; Quebec questions economic benefits GARY PARK For Petroleum News
TransCanada has resorted to another gambit to rescue the second of its planned crude oil pipelines out of Western Canada by scuttling a proposed tanker terminal in Quebec for the C$12 billion, 2,800-mile Energy East system.
The same week that it was rebuffed by the White House in its attempt to delay the U.S. review of Keystone XL until after the 2016 presidential election, the Calgary-based company announced it was abandoning controversial plans to build a marine terminal on the St. Lawrence River, acting on the advice of community groups in Quebec as well as its partners and clients.
Seven months after caving in to pressure to drop the Cacouna terminal because of concerns about the impact of tankers on a breeding ground for beluga whales, TransCanada announced it has given up its evaluation of “other options” for a port in Quebec.
That leaves Energy East to deliver 1.1 million barrels per day of crude to Quebec’s two refineries, along with the Irving Oil refinery in Saint John, New Brunswick, where an export facility is also in the works.
TransCanada Chief Executive Officer Russ Girling said the decision “demonstrates our dedication to listening and delivering a vital infrastructure project that will provide significant economic benefits to all provinces along the pipeline’s route.”
The company said it will submit the amendment to the National Energy Board and that Energy East should be up and running by 2020.
But Quebec Premier Philippe Couillard and Energy Minister Pierre Arcand - who had earlier raised concerns about the project - agreed it will now be more difficult for TransCanada to demonstrate the economic benefits of allowing the pipeline to enter and cross Quebec.
Arcand said his government must now weigh the benefits of 4,000 pipeline construction jobs and the agreements to deliver crude to the Valero and Suncor Energy refineries.
“With a port in (Quebec), it’s quite simple to calculate the benefits in terms of infrastructure and jobs,” Couillard said. “Without it, I’m not saying it’s impossible, but it becomes even more complicated.”
Concerns over environment Opposition members of the Quebec legislature say the risks of having a pipeline run through 600 Quebec lakes and rivers now clearly outweigh the positives.
Dominic LeBlanc, newly appointed government leader in the House of Commons in the new government of Prime Minister Justin Trudeau, said Trudeau’s pledge to reform environmental reviews of pipelines will lead to a “robust, stringent and independent” evaluation of Energy East by the National Energy Board.
“There has to be a much more concerted effort on the part of the government of Canada ... to build understanding, information and support around a process of review,” he said.
Concern about hearings The changes could also open the door for aboriginal communities to submit scientific evidence or express opinions about Energy East, including talk about their creation myths, their historic use of territory that would be affected by the pipeline and to recite oral histories.
In a letter to the NEB, TransCanada expressed concern that indigenous groups will include consultants and lawyers in their presentations in violation of NEB rules for hearings.
But a TransCanada spokesman said the company does not fear any regulation changes, noting that any steps leading to “safe projects are good business. People want to know how we can ensure that we’re protecting the environment and protecting their water.”
With TransCanada’s Keystone XL apparently sidelined for at least the remainder of President Barack Obama’s term, and three other major pipeline proposals - Energy East, Northern Gateway and the Trans Mountain expansion - in limbo, only Enbridge’s Line 9 conversion remains on track to start shipments in December of 300,000 bpd of Western Canadian and U.S. Bakken crude to refineries in Ontario and Quebec.
Enbridge Chief Executive Officer Al Monaco said the line-fill is already taking place on the 400-mile link, setting the stage for the refineries to gain “access to secure, reliable Canadian crude.”
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