Calgary-based TransCanada Corp., the company behind Keystone, plans to build a pipeline that would ship mostly light oil, but also heavy crude, from oil rich Western provinces across the country the East Coast. The Energy East Pipeline could have the capacity to transport as many as 850,000 barrels of crude oil per day beginning in 2017. The plan is to convert about 3,000 kilometres of an existing natural gas pipeline and add an additional 1,400 kilometres of new pipeline.
What's the argument for a west-east pipeline?
Oil from Western Canada is essentially landlocked, making it difficult to move to international markets, which drives down its price by as much as $40 a barrel compared to the world standard. It is also difficult to ship Western crude across the country to Atlantic Canada, which instead relies on foreign sources of oil, a situation that is less than ideal in a country that has so much of its own oil waiting to be sold. TransCanada says the pipeline could reduce the need to import foreign oil to process at refineries in Eastern Canada, while Natural Resources Minister Joe Oliver argues that the Energy East Pipeline could deliver Canadian oil to large energy consumers in Asia, in addition to making the country less dependent on foreign oil. In addition, a lack of pipelines to export oil has left a glut of oilsands crude sitting in a bottleneck in the U.S. Midwest, which has depressed Canadian oil prices compared to the U.S. benchmark, West Texas Intermediate, which in turn trades at a discount to the cost of Brent crude. Those low prices have cost the Canadian and Alberta governments millions in lost royalties.
What is the status of the Energy East Pipeline?
In October, 2014, TransCanada formally applied to the National Energy Board to make the Energy East pipeline a reality. The NEB has 15 months to review the project and make a recommendation to Prime Minister Stephen Harper.
What is the pipeline’s route?
The exact route will be determined after a public and regulatory review, but the starting point would be a new tank terminal in Hardisty, Alta. Three other terminals would be built along the line: one in Saskatchewan, another in the Quebec City area and a third near Saint John., N.B. The line would be about 4,400 kilometres long, including the segment already built for TransCanada’s natural gas line. New sections will need to be built in Alberta, Saskatchewan, Eastern Ontario, Quebec and New Brunswick.
Where will the oil go?
Crude from the pipeline would be shipped to energy-hungry markets in Asia and elsewhere, as well as to refineries and eventually consumers in the Atlantic provinces. The proposed terminals in Quebec City and Saint John would include facilities for marine tanker loading for export. The project would also include delivery to existing Quebec refineries in the Montreal and Quebec City areas, as well as a large Irving Oil refinery in Saint John.
What are the potential environmental issues?
Environmentalists argue the pipeline could put waterways and communities along its route at risk as well as add the potential of a major oil spill on the east coast from export tankers waiting to take the crude abroad. Because oilsands product emits an estimated five to 15 per cent more carbon than conventional oil, refining more of it in Canada would likely increase the country's total carbon emissions. However, the U.S Defence department recently determined that emissions from transporting and using fuel from oil sands was not significantly different from those made with conventional oil.
What are the potential challenges?
Technical issues include relatively small refineries on Canada's east coast that have only limited capacity to refine tarry bitumen and a short-term potential overcapacity if all three proposed pipelines are completed on schedule between 2015 and 2018. But the more immediate obstacle is from environmentalists who warn, among other potential risks, that the plans to convert a gas pipeline to oil could pollute Canadian sources of waters. Vocal criticism from environmentalists and First Nations groups have held up the approval process for both Northern Gateway and Keystone. The project will be subject to public and regulatory reviews.
What are the potential political hurdles?
Politicians appear to be lining up behind the idea of a west to east pipeline. Potentially because 3,000 kilometres of the project is already in the ground, the proposal suggests refining at least some of the oil at home, which could reduce high gas prices in Atlantic Canada. The project has the support of the federal government as well as the provinces of Alberta and New Brunswick and support in principle from Quebec. Federal Liberals have also expressed support, and even NDP Leader Thomas Mulcair, who is staunchly opposed to Northern Gateway, has voiced support.
Would this pipeline render Keystone and/or Northern Gateway unnecessary?
According to the industry, all three lines are necessary if Canada wants to meet its export potential in the coming decades. The west-east pipeline would complement, rather than replace, the other two pipelines and build capacity to ship oil west east and south, the industry argues.
What are the benefits for Canada?
Drivers in Atlantic Canada currently pay as much as 20 per cent more to fill up than those in the Western provinces. Among other factors driving prices higher, they are paying a premium to import foreign oil, while Canadian oil sits ready for use. Proponents say the pipeline will create a new domestic market for Western Canadian oil, as well as potentially open a new door for international export. In addition, the project could contribute to job creation and economic growth, with some estimates saying it has the potential to create thousands of jobs during construction and a few hundred permanent positions.
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The Montreal Metropolitan Community, which represents 82 jurisdictions, said Thursday it opposes the project and will defend that position at Quebec environmental impact and National Energy Board hearings.
Montreal Mayor Denis Coderre, the current president of the organization, said the decision was unanimous and that the environmental risks far outweigh any economic benefits for the region.
The announcement prompted a sharp political rebuke from the Opposition in Alberta.
"You can't dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipelines,'' Wildrose Leader Brian Jean said.
Coderre said the project is worth about $2 million a year in economic benefits to the Montreal area, while the cleanup of a major oil spill could cost between $1 billion and $10 billion.
Environmental consultations were held across the Montreal territory last September and October and Coderre said the majority of the 140 groups that submitted briefs were opposed to the project.
TransCanada didn't participate in the hearings, a decision Coderre called ''arrogant."
The company estimates the cost of the pipeline will now come in $15.7 billion, up from the original $12 billion price tag. That amount doesn't count the existing pipeline assets that will be converted for use in Energy East.
The pipeline is unpopular in Quebec and the provincial government has said it wants the province to serve as more than just a passageway for TransCanada, urging the company to demonstrate real economic benefits for the province.
"Trudeau already said that pipelines projects must be accepted by the local communities before they get approved,'' said spokesman Patrick Bonin.
"The MMC's decision is a clear no to TransCanada's project, which means that it cannot go forward.''
Energy East Pipeline Would Cross 828 Bodies Of Water In Quebec
Proposed crude oil pipeline would also cut through 69 municipalities in the province
If it's built, the Energy East pipeline would cross 828 bodies of water and 69 municipalities in Quebec, a document obtained by Radio-Canada shows.
The document, included in a letter sent on June 11, 2015 from TransCanada to the Union of Quebec Municipalities, details each type of body of water that would be crossed by the proposed 4,600-kilometre pipeline.
Most of the channels are narrow — they include 46 "perennial" streams, 395 "intermittent" streams and 233 "permanent small watercourses".
However, the pipeline would also cross 94 "medium permanent" rivers, 28 "large permanent" rivers, 28 beaver ponds and four ponds.
Categories of water bodies
- Ephemeral watercourse: Flows after heavy rains and melting snow in the spring and is characterized by a poorly-defined river bed and banks.
- Intermittent watercourse: Flows continuously for several weeks or months before drying out and is characterized by a well-defined river bed and banks.
- Small permanent watercourse: Narrower than five meters.
- Medium permanent watercourse: Has a width between five and 20 meters.
- Large permanent watercourse: Wider than 20 meters.
- Beaver pond: Large expansion of a stream created by a beaver dam.
- Pond: Small natural lake or one created on agricultural land.
Initially, the pipeline project was only expected to cross 641 bodies of water in the province, including 30 major ones.
But in December, École Polytechnique researchers said the soil along the banks of several rivers are too unstable to support a pipeline. Potential landslides could lead to flooding and the pollution of nearby waterways, the researchers said.
Among the rivers at risk were the Ottawa River, Mille-Îles, St. Maurice, Sainte-Anne and Jacques-Cartier rivers.
Municipalities crossed by the pipeline
In the same letter, TransCanada also lists the 69 Quebec municipalities that the pipeline would cross. Overall, the pipeline would run through 688 kilometres of municipal land.
The municipalities of Lévis (52.5 km), Mirabel (36.7 km) and Dégelis (32.8 km) would have the longest stretches.
*The original plans included a terminal in Cacouna, which has since been removed from the project.
TransCanada also stated in June 2015 that had mapped out 85 per cent of the pipeline route in Quebec.
Here's a break down of the type of terrain the pipeline would cross in the province.
- Forests: 51.8 per cent of the pipeline's span in Quebec.
- Agricultural land: 33.2 per cent.
- Wetlands: 13 per cent.
- Commercial, industrial and residential zones: 2 per cent.
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The Pembina Institute, an environmental think-tank, released a report in 2014 that found producing the amount of crude needed to fill Energy East might generate an extra 32 million tonnes of greenhouse gases each year.
In April 2015, under mounting pressure from environmental groups, the company announced that it would not be building a planned port in Cacouna, Que., located on the St. Lawrence River, due to concerns about beluga-whale breeding grounds. The change added two years onto the project's timeline.
At the time, TransCanada said it was looking for another suitable location in Quebec. But in November, the corporation announced it wouldn't be building a port in Quebec at all, which launched a lot of the province's dissatisfaction.
The province's premier, Phillipe Couillard, said at the time: "With a port in the province, it's quite simple to calculate the benefits in terms of infrastructure, jobs. Without it, I'm not saying it's impossible, but it becomes even more complicated."
Who opposes the pipeline?
At a recent news conference, more than 80 mayors in the Greater Montreal area announced their opposition to the pipeline. Coderre spoke on the group's behalf, saying the project "still represents significant environmental threats and too few economic benefits for Greater Montreal."
A telephone survey conducted by the polling firm SOM late last year found that 57 per cent of Quebecers opposed Energy East.
In May 2015, more than 60 organizations, including the David Suzuki Foundation and Greenpeace Canada, signed a letter to the National Energy Board asking that it overhaul its review process and begin evaluating the Energy East project again only when more information had been submitted.
Who supports the pipeline?
Alberta politicians have thrown their weight behind the project, touting the economic benefits.
Calgary Mayor Naheed Nenshi recently said that "Energy East is about energy independence for Canada. It not only allows us to get market access, it allows us to serve Canadian customers with Canadian energy."
Alberta Premier Rachel Notley has also voiced her support for the project. "Tens of billions of dollars in revenues, to be shared among all provinces, are at stake over our access to more markets for our oil," she said.
Ontario Premier Kathleen Wynne has sort of flip-flopped on the issue. She'd expressed concerns about the pipeline in the past, but the Alberta NDP government's climate-change plan, which caps oilsands emissions, has made her more inclined to work with the western province on Energy East. She gave her tentative support to the project at a news conference last week.
"The people of Ontario care a great deal about the national economy and the potential jobs that this proposed pipeline project could create in our province and across the country," she said.
What does Trudeau say?
The prime minister has not come out definitively in favour of or against the Energy East pipeline. Instead, he's criticized the current approval process for pipeline proposals, calling it flawed.
His government is reviewing the environmental assessment rules currently in place for pipeline applications with an eye toward overhauling the process soon.
"My responsibility as prime minister is to make sure that on national projects, we're behaving in a way that both contributes to the economy, to a secure environment, to bringing people together and mostly to creating a better future," Trudeau said Tuesday.
