Prime Minister Justin Trudeau needs to at least try to resurrect the Energy East pipeline project since it could mean thousands of jobs for Atlantic Canada, says the top exec of Saint John’s chamber of commerce.
“The market for oil is not going to disappear in our lifetime,” said David Duplisea, executive director of the Saint John Region Chamber of Commerce, in an interview Wednesday. “There is demand for it.”
Last week, Ottawa announced it was going to invest $4.5 billion to buy Kinder Morgan’s Trans Mountain oil pipeline, a deal which doesn’t include all the money needed to twin that pipeline.
Estimates for Ottawa to do that work, which Kinder Morgan has previously pegged at $7.4 billion, range all the way to $12 billion.
In the wake of that deal, Saint John Mayor Don Darling accused the federal government of playing favourites by choosing to invest billions into the Trans Mountain pipeline in Western Canada while doing nothing to help the now-defunct Energy East project here.
“We’re the poor cousins from the East,” said Mayor Darling last week. “The federal government wants this Trans Mountain project to go ahead at all costs – even to the point of investing in it – and we couldn’t even get regulatory approvals.”
So far, the prime minister and Finance Minister Bill Morneau have been mum on Energy East, not responding to requests for interviews.
A spokesperson for the Department of Finance, though, justified Ottawa's investment in Trans Mountain but not Energy East by saying the two are very different pipeline projects.
Trans Canada pulled the plug on Energy East due to the company’s frustration over the regulatory process while Kinder Morgan’s pipeline was already approved, said the official.
“In the case of Energy East, the proponent, Trans Canada, made a business decision to cancel the project when it was still in the application phase. The project had not completed a robust review by the regulator, the National Energy Board,” said Department of Finance spokesperson Joceyln Sweet.
“In the case of the Trans Mountain expansion project, Kinder Morgan had been advancing the pipeline project, on a commercial basis, for several years. The company had worked to obtain all the necessary approvals and permits required to proceed with the project and has done so in full accordance with Canadian law. The National Energy Board and the Government of British Columbia had approved the project,” she said.
According to Sweet, the federal government felt the need to step in on the Trans Mountain situation because of political uncertainty in British Columbia which made it difficult for the company to go ahead with construction.
“A private company cannot be expected to solve issues involving friction between two governments,” said Sweet.
Prime Minister Trudeau has pledged the Trans Mountain expansion project will now go ahead.
Many Atlantic Canadian business and community leaders, though, remain puzzled over Ottawa’s decision to nationalize the pipeline in western Canada while essentially ignoring Energy East.
At the Saint John Region Chamber of Commerce, Duplisea accepts that Energy East was still in its regulatory approvals phase but maintains much of the company’s troubles stemmed from government interference.
“The federal government, through the National Energy Board, had put up a number of roadblocks and moved the goalposts,” said Duplisea. “(Trans Canada) was losing hope that there was a line of sight in approving this project.”
The chamber exec recognizes Canada's existing pipelines – and the proposed twinning of Trans Mountain – might mean there is already enough capacity to move Alberta oil to markets. He accepts the Energy East pipeline may simply no longer be needed.
But he insists Ottawa needs to do its due diligence to find out whether or not that’s the case.
And if there is a demand for the Energy East pipeline, Duplisea wants the federal government to do whatever it can to make that project happen and create jobs and economic development in Atlantic Canada.
“We’re working with Members of Parliament and having a dialogue with them as to what the next steps will be,” he said.
TransCanada’s Energy East pipeline was projected to cost $15.7 billion and create 3,323 direct jobs in New Brunswick during construction and another 648 indirect jobs. Before TransCanada pulled the plug on Energy East, 300 contractors had registered to be suppliers for the project.
The Energy East pipeline would have contributed $6.5 billion to New Brunswick’s gross domestic product over the next two decades, said Duplisea.
“It was $300 million just for Irving Oil’s marine terminal expansion in Saint John,” he said.
Irving Oil did not respond to a media request for information about Energy East.
So, just what are the odds of Energy East being resurrected?
“We’re cautiously optimistic although we recognize there are challenges with this project moving forward at this point,” said Duplisea.
