CALGARY – After dozens of open houses and thousands of conversations across six provinces, TransCanada Corp. (TSX:TRP) has filed its regulatory application for its massive cross-Canada Energy East pipeline.
But the hard part for TransCanada (TSX:TRP) was just beginning Thursday as copies of the document — each fills 68 binders in 11 boxes — arrived at the National Energy Board’s headquarters in Calgary.
TransCanada must convince a skeptical public that the pipeline won’t cause environmental harm or lead to higher utility costs in Eastern Canada. The project must also navigate ever-changing market conditions, as crude production from shale deposits in North Dakota and Texas surge.
“At over 30,000 pages, the document is one of the most extensive regulatory applications ever developed in our history. The final result is a body of work that I believe achieves what we set out to do many months ago and that was to listen,” CEO Russ Girling told reporters.
“Those conversations provided valuable feedback into the design and the development of the project, including making changes to the pipeline route and our facilities where it made the most sense from both an environmental and safety perspective.”
The $12-billion pipeline would be one of the biggest infrastructure projects ever built in Canada, spanning a total of 4,600 kilometres.
The filing starts the clock on the regulatory process, which is expected to last 18 months.
Energy East would ship Alberta crude two thirds of the way through repurposed natural gas pipe that’s already in the ground, with new pipeline to be built through Quebec and New Brunswick.
TransCanada held about 100 open houses and has met with more than 7,000 individuals, 5,500 landowners and 160 First Nations and Metis communities across six provinces, said Alex Pourbaix, TransCanada’s president of development.
“While this is a tremendous undertaking in just over 18 months, I would like to make it very clear that our engagement efforts do not end here,” he said. “We have and will continue to listen to all of those interested in the project throughout its lifetime.”
But it’s evident some groups won’t be swayed.
“We will fight Energy East every step of the way, and we are far from alone,” said Andrea Harden-Donahue, energy and climate justice campaigner with the Council of Canadians.
Ben Powless, pipeline community organizer with Ecology Ottawa, described the filing Thursday as “the countdown to the pipeline being rejected.”
Adam Scott, with Environmental Defence, said Energy East won’t get any warmer of a reception than other controversial proposals like Enbridge Inc.’s (TSX:ENB) Northern Gateway pipeline to the West Coast or TransCanada’s Keystone XL pipeline to U.S. markets.
Keystone XL has been mired in the U.S. regulatory process for more than six years. Although Northern Gateway has Ottawa’s conditional blessing to proceed, Enbridge is taking extra time to “re-engage” with B.C. First Nations, many of which are vehemently opposed to that proposal.
“It’s time Canada invested in our future, not in risky pipelines that lock us into the past, tip us closer to dangerous climate change and put our land, air, water and climate at risk,” said Scott.
Energy East would deliver crude to export terminals planned for Quebec and New Brunswick, enabling shipments to Europe, India and other destinations and garnering a better price for Alberta producers.
TransCanada touts the project as a boon to Eastern Canadian refineries, too. It aims to supply cheaper inland crude to refineries in Quebec and New Brunswick, supplanting imports from the Middle East and other foreign sources. However, Environmental Defence and Greenpeace called that claim into question in a report this week, arguing TransCanada is exaggerating the pipeline’s domestic benefits as supplies from U.S. shale deposits surge.
Girling said it’s tough to know exactly how much crude will be destined for export versus domestic markets on any given day, but his “gut feel” is that it will be about half and half.
The proposal has also raised concerns about how the conversion of natural gas pipe to oil service could affect gas supplies flowing east. Sophie Brochu, the head of Quebec’s largest natural gas distributor, said last week that the project will raise prices and reduce employment if implemented as proposed.
TransCanada has stressed that Canadian supplies of gas won’t be affected by Energy East, as a branch of its mainline network that exports gas to the United States is being converted to oil service. New capacity is also being added to the populous Toronto-Montreal corridor.
Alberta Premier Jim Prentice called Energy East “a true nation-building project.”
New Brunswick is keen on the project, with new Premier Brian Gallant travelling to Alberta last week to express his support. It’s not clear that Ontario and Quebec are as enthusiastic.
The Federation of Northern Ontario Municipalities — a group representing numerous communities that Energy East would cross — is in favour of the project.
“It stems from the fact that TransCanada’s been operating in our backyards, in our communities for almost 60 years. We have a comfort level with the technology. We certainly have a comfort level with the company,” said Al Spacek, the group’s president and the mayor of Kapuskasing, Ont.
He told a news conference alongside TransCanada officials that the company is not being given “carte blanche” just because of the project’s economic benefits.
“We know that TransCanada will adhere to the highest safety and environmental standards. That’s been our experience with them and our relationships that we’ve had with them over the last number of years.”
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