TransCanada cites regulatory uncertainty in withdrawal of Energy East application

Natural Resources Minister Jim Carr. Image: Flickr.

The “substantial uncertainty” around the scope, timing and cost associated with the National Energy Board’s review of the Energy East and Eastern Mainline projects was a consideration in its decision to scrap the projects, TransCanada Corporation said Thursday.

“There is also the question of jurisdiction that arises from the NEB decision,” the applicants, Energy East Pipeline Ltd. and TransCanada PipeLines Limited, said in a letter to the board in which they formally withdrew from the review process. The letter was signed by Kristine Delkus, executive vice-president and general counsel.

TransCanada announced Thursday that it intended to cancel the $15.7 billion project that would have transported 1.1 million bbls per day of crude oil from Hardisty, Alta., to Saint John, N.B. In the release, Russ Girling, chief executive officer, referred only to “changed circumstances.”

Following the announcement, federal Natural Resources Minister Jim Carr downplayed the idea that the decision was related to the regulatory process, suggesting that TransCanada was simply responding to a changed business climate.

In its letter to the NEB, the company said it had carefully reviewed the board’s decision, which set out the final list of issues and environmental assessment factors for the projects and the implications of the decision. Included in the list of issues to be reviewed was that of upstream and downstream greenhouse gas emissions.

TransCanada said it also considered the proposal from New Brunswick Premier Brian Gallant that the federal government fund and undertake an upstream and downstream GHG analysis and a letter from Environment and Climate Change Canada offering its expertise and support for an assessment of GHGs for the projects.

“Notwithstanding these efforts, there remains substantial uncertainty around the scope, timing and cost associated with the regulatory review of the projects,” said the proponents.

In its letter to the board, TransCanada said it also considered “the existing and likely future delays resulting from the regulatory process, the associated cost implications and the increasingly challenging issues and obstacles facing the projects.”

The NEB on Sep. 8, 2017, had granted TransCanada’s request for a 30-day halt to the review process to enable it to review the final list of issues for the Energy East and Eastern Mainline projects.