The proposed Energy East pipeline could run into some big blockages mid-route as Ontario questions what’s in the deal for them.
Calgary-based TransCanada Corp. wants to convert an existing natural gas line to carry crude oil from the Alberta oilsands to the Irving Refinery in Saint John.
New Brunswick Premier David Alward is a strong supporter of the project, calling it "nation building" and a game changer for the province's economic situation.
"I think that the nation-building concept is one way to get people excited about this because I do think that there’s a real feeling of, ‘We can contribute to the wellbeing of the whole country,’ as long as the provide is done right," said Warren Mabee, director of the Queen’s Institute of Energy and Environmental Policy.
But in order for the pipeline plan to go through, the government of Ontario has to sign off.
Mabee said some of the major barriers to Ontario agreeing on the plan are the environmental and safety concerns that are raised with a project like this.
"We know that pipelines don’t have a 100 per cent safety record. We know that there can be leaks and we’re concerned about what might happen around the route. The proposed route for the existing natural gas pipeline runs across some pretty important watersheds. It runs across the sources of drinking water for a number of communities, North Bay — and so that’s a big issue for Ontario," he said.
"These are areas of concern, these are issues that need to be raised and discussed and explored because it’s not at all clear what those impacts might be, we don’t really know yet."
Another matter that the province of Ontario may be considering, said Mabee, is that of economics and supply.
Significant volumes of natural gas still flow through the existing pipe and that taking that away may mean relying more on supplies from the U.S., said Maybee.
"That’s an issue that needs to be addressed," he said.
Mabee said the Ontario government is looking for some assurances.
"One thing that isn’t clear yet is how much of the volume of oil that’s going to pass through this pipe is going to make it into Saint John and is there going to be oil that’s kind of diverted en route. You know, would some of that oil end up in Sarnia [Ont.] for instance," he said.
"Well certainly the environmental issues are significant, these are not things that can be kind of swept under the rug — precisely as is the case with the western pipelines. These are issues that will have to be addressed through environmental assessments, the Ontario Energy Board will be involved as will the National Energy Board — and if they can’t be addressed to the satisfaction of Ontario, that could certainly put a damper on the whole project."