TransCanada Plans Pipeline to East Coast

Author: 
Ian Austen
Source: 
The New York Times - Business News
Date published: 
Thu, 2013-08-01

OTTAWA — Faced with uncertainty over its proposed Keystone XL pipeline, which would link Canada’s oil sands with the American Gulf Coast, TransCanada said on Thursday that it would build a pipeline to eastern Canada.

The pipeline company announced that it would proceed with a $12 billion pipeline that could move up to 1.1 million barrels a day to New Brunswick, to serve a region that now relies on imported crude oil for the overwhelming majority of its supply.

TransCanada announced its decision four days after President Obama, in an interview with The New York Times, dismissed the significance of job claims by advocates of Keystone XL. In the interview he reiterated his position that approval for that pipeline rests on whether it will add significantly more carbon to the atmosphere.

But Russ Girling, the president and chief executive of TransCanada, said the new project was not a sign that his company was retreating from Keystone XL. “What we know in North America is production is continuing to grow,” Mr. Girling said at a news conference. “The marketplace needs both of these pipelines and probably more.”

While Mr. Girling promoted the Energy East Pipeline primarily as a way to supply Canadian refineries, he said it would also allow oil sands producers to increase their export business. He said a new deep seaport at the pipeline’s eastern terminus, Saint John, New Brunswick, and a port in Quebec City would allow tankers to carry diluted bitumen, the oil-containing substance that is separated out of the oil sands, to the Eastern Seaboard of the United States, the Gulf Coast, Europe, India and Asia.

A plan by Enbridge, another Canadian pipeline company, to build a pipeline from Alberta to a new tanker port in British Columbia for exports to Asia has met strong opposition from environmentalists and several native Canadian communities along its route.

TransCanada’s new plan involves converting 1,864 miles of a natural gas pipeline to carry oil, and the construction of 870 miles of new pipeline, mainly in Quebec and New Brunswick. It has long-term contracts to carry about 900,000 barrels of oil a day along the route, Mr. Girling said.

“They’re in for a fight,” John Bennett, the executive director of the Sierra Club of Canada, said shortly after the announcement. Mr. Bennett said he was particularly concerned about the possibility of oil spills in the Bay of Fundy in New Brunswick and about harm to whales in the area from tanker traffic. In a statement, Environmental Defence said the plan was “yet another misguided scheme that puts Canadians in harm’s way for the benefit of the oil industry’s bottom line.”

            

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