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TransCanada could abandon Energy East after NEB carbon emission plan

Published by , Senior Editor
World Pipelines,

The NEB’s plan to assess indirect carbon emissions when considering TransCanada Corp.’s Energy East pipeline application sets a harsh precedent for future projects, the Alberta government and supporters of the pipeline said on Friday.

TransCanada said on Thursday it may abandon the proposed 1.1 million bpd pipeline – from Alberta to New Brunswick – following a decision by the NEB in August to look at upstream and downstream carbon emissions when deciding whether the project is in the public interest.

Supporters of Energy East said the NEB’s plan to consider indirect emissions, or emissions that come from the production and refining of the crude the pipeline will carry, was unreasonable.

“We believe it would be a historic overreach and has potential to impact the future of energy development across Canada,” Alberta Energy Minister Marg McCuaig-Boyd said in a statement. “This is not an appropriate issue to include in the review.”

Calgary-based TransCanada asked the regulator to pause the application for 30 days while it gauges the impact on the pipeline’s cost, schedule and viability. That request was granted on Friday.

The Canadian government released transitional rules for energy reviews in January 2016 that said upstream emissions from crude producers should be assessed, but the NEB’s plan goes further by including the downstream greenhouse gas impact.

The NEB has not released any clarification on the process it would use to consider the measurement of upstream and downstream emissions, spokeswoman Sarah Kiley said.

While the NEB panel assessing Energy East is an independent body, Chris Bloomer, president of the Canadian Energy Pipeline Association, urged the federal government to step in and clarify what the indirect emissions requirement means.

Federal government policies tying environmental impacts to regulatory approval of pipelines are sending investors fleeing for more certain ground, critics and pipeline proponents said Friday.

The comments come a day after TransCanada Corp., said it was asking the National Energy Board to suspend its application for the 4500 km Energy East pipeline for one month while it figures out if the NEB’s environmental assessment of the line will affect the economic argument for the project.

Canada West Foundation CEO Martha Hall Findlay, a former Liberal MP, said everyone wants to cut greenhouse emissions, but the government is not going to prove it can cut emissions and still build pipelines by “moving the goal posts in the middle of a major investment decision.” Prime Minister Justin Trudeau said any big project has to balance jobs and economic growth against protecting the environment.

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