TransCanada Corp.’s Energy East oil pipeline would be one of North America’s largest crude pipes, offering Alberta’s oil sands producers waiting for the Keystone XL line another way to reach customers by shipping across Canada to the Atlantic Coast.TODD KOROL/Reuters
Alberta Premier Rachel Notley is set to meet on Friday with her Ontario counterpart, Kathleen Wynne, as the Western province seeks to build support for the proposed Energy East pipeline after it drew heat from Montreal-area mayors on Thursday.
With her province reeling from the impact of depressed oil prices, Ms. Notley is pressing Ottawa to approve crude pipelines to the east and west coasts that would provide Alberta's industry with access to more lucrative export markets and support investment over the longer term.
Montreal Mayor Denis Coderre and several regional mayors announced Thursday that they oppose TransCanada Corp.'s proposed $15.7-billion project, saying it poses environmental risks with few benefits to Quebec. The proposed pipeline would move 1.1 million barrels of crude oil a day from Western Canada to Irving Oil Ltd.'s refinery and export terminal in Saint John. It would pass through heavily populated areas in the Montreal region.
"They didn't do their homework, obviously," Mr. Coderre said. "They were a bit arrogant, frankly. Let's call a spade a spade: It's a bad project."
He said that the economic benefits are slim – with negligible job creation – whereas the possible environmental fallout, including costly oil spills, water contamination and human health concerns, is high.
Not surprisingly, Mr. Coderre's criticism drew rebukes from three provinces with big stakes in the project: Alberta, Saskatchewan and New Brunswick.
Alberta Economic Development and Trade Minister Deron Bilous described Mr. Coderre's statements as "both ungenerous and shortsighted."
"Everyone loses if we destroy our resource economy," he said in a statement.
Saskatchewan Premier Brad Wall said the mayors were being "parochial," adding that Quebeckers will "benefit to the tune of $10-billion in equalization payments this year."
New Brunswick Energy Minister Donald Arseneault said the project would create 3,000 construction jobs in his province and Quebec, but acknowledged the environmental concerns of the Quebec mayors would have to be addressed.
Alberta's Premier has spoken about the need to build at least one "drama-free" pipeline project and is eager to win Ms. Wynne's support for Energy East. "We're trying to have drama-free discussions, which is what you get when you collaborate with other provinces," Ms. Notley's spokeswoman, Cheryl Oates, said Thursday.
At a speech in Toronto on Thursday evening, which was attended by Ms. Wynne, the Alberta premier made a plea for pipelines to the coasts.
Ms. Notley said her government is determined to meet the environmental challenges posed by the oil industry. But she added the province – and to some extent, the country – still relies on the industry to generate jobs and government revenues.
"We must be able to present to the world an intelligent, progressive and well-managed energy product," she said. "And that cannot and will not happen without access to tidewater in our country."
The NDP government announced a major pivot in Alberta's environmental policy on Nov. 22, when it unveiled plans for an economy-wide carbon tax and a cap on emissions from the province's oil sands.
Aimed at tackling climate change, Ms. Notley has also said that the wide-reaching carbon rules should help Alberta secure approval from communities across Canada for the construction of pipeline projects.
The decision by Montreal-area mayors is the latest blow to Energy East. TransCanada dropped plans for an export terminal in Quebec last year over concerns about belugas in the St. Lawrence River.
TransCanada spokesman Tim Duboyce said the company is eager to hear all public concerns and address them. "We want to make Energy East a better project. We've demonstrated we are responsive to those concerns when they are raised," he said in a telephone interview from Calgary.
The staunch opposition in Quebec poses a tricky political problem for the federal government, which says it supports better market access for the industry even as it promises a more robust environmental review process, which the Liberals in Ottawa have criticized as lacking in credibility.
Natural Resources Minister Jim Carr was in Atlantic Canada this week and toured Irving Oil's Saint John refinery, which would process crude from the Energy East pipeline and partner with TransCanada in construction of an export terminal.
Environmentalists have called on the federal government to suspend TransCanada's application at the National Energy Board – as well as the review of Kinder Morgan Inc.'s proposed expansion of its Trans Mountain pipeline to Vancouver – until it can retool the process. Instead, Mr. Carr has said he will impose some "transitional measures" – due within weeks – to boost the credibility of the review before cabinet rules on the board's recommendations, first on Trans Mountain and then on Energy East.
With a report from Shawn McCarthy
Editor's note: A previous version of this story said TransCanada Corp.'s Energy East oil pipeline project would cost $12-billion; in fact, the cost is $15.7-billion.