TransCanada abandons Energy East pipeline project
The Canadian Press
Posted on October 05, 2017
CALGARY -- The premiers of Alberta and New Brunswick say they're disappointed by TransCanada's cancellation of the Energy East pipeline, which would have connected their two provinces.
Alberta Premier Rachel Notley says her government has always supported Energy East because of the new jobs, investments and markets it would create.
New Brunswick Premier Brian Gallant also said Energy East would have been good for his province's economy and generated future revenue for his government.
Energy East had been proposed as a way to move Alberta oilsands production as far east as an Irving Oil operation in Saint John, N.B.
The Calgary-based company (TSX:TRP) had announced last month that it was suspending its efforts to get regulatory approvals for the mega project.
It announced Thursday that it will no longer be proceeding with its applications for the mega project "after careful review of changed circumstances."
Supporters of Energy East said the pipeline was necessary to expand Alberta's markets and decrease its dependency on shipments to the United States. Detractors raised questions about the potential environmental impact.
"We are deeply disappointed by the recent decision from TransCanada," Notley said in a statement.
"We understand that it is driven by a broad range of factors that any responsible business must consider. Nonetheless, this is an unfortunate outcome for Canadians."
Gallant said he believes the project's decision was due to recent changes to world market conditions and the negative impact of lower oil prices.
"We believed if TransCanada continued with the process, the project would be approved. We still believe that," Gallant said.
But others pointed to the complex regulatory process and mixed messages from the federal government as contributing factors.
TransCanada's statement didn't blame either the regulatory process or low oil prices for its decision, which will result in a non-cash charge of about $1 billion in its fourth-quarter financial results.
But TransCanada CEO Russ Girling assured investors that he expects TransCanada will continue to focus on its $24 billion near-term capital program, which he said will support growth in its annual dividend.
TransCanada shares were essentially flat at about $61 on the Toronto Stock Exchange as of mid-morning.
Meanwhile, Montreal Mayor Denis Coderre celebrated the Energy East announcement on Thursday, suggesting in a series of tweets that citizen groups and local politicians from the Montreal-area played a key role in putting a stop to the project.
Coderre and numerous other elected officials had argued the environmental risks associated with it far outweighed the economic benefits.
"The abandonment of the Energy East project is a major victory for the municipal world," Coderre wrote.
Coderre also thanked local Indigenous groups for their leadership on the pipeline file.