Business leaders and politicians in the Maritimes and northeast United States say a proposed northeast energy corridor could spur on billions of dollars in investment.

'The northeast energy corridor would be the backbone for a new commerce corridor of economic development and trade.'— John Baldacci, Maine governor

New Brunswick Premier Shawn Graham and Maine Gov. John Baldacci announced the first steps of an energy corridor that could send renewable electricity and natural gas from Atlantic Canada into the energy starved New England states.

Saint John-based Irving Oil Ltd. said Wednesday it is undertaking a technical and commercial study on the first phase of the international power corridor that will include the possible construction of a 500- to 600-megawatt natural gas-fired co-generation power plant, a 1,200- to 1,500-megawatt transmission line and the addition of an unspecified amount of wind power.

The transmission capabilities would also help deliver electricity from the proposed second nuclear reactor at Point Lepreau, N.B., and the Lower Churchill hydro projects in Newfoundland and Labrador.

Chris Huskilson, the president and chief executive officer of Emera Inc, which owns Bangor Hydro, said the proposal linking Saint John with customers in Boston could have an upside for future energy projects across the Atlantic region.

If the northeast corridor proceeds, the utility has a preliminary agreement to build a $2-billion underground transmission line between Bangor, Maine, and Boston.

"We are working together right now to identify whether or not the interstate highway system can be used as a part of that next corridor — that is what Bangor Hydro is doing with the state," he said on Wednesday.

"There are opportunities for producers in the entire region. The better connections we can make between our region and the rest of New England then the more opportunities that open up for everyone."

Corridor could spur on additional energy projects

The capacity of the new transmission line would be four to five times larger than the existing interconnections between the Maritimes and Maine.

The New Brunswick government has spent the last several years pitching the Saint John-area as a regional energy hub because of its growing list of energy projects that are already located in the area or are proposed for the coming years.

Bob Manning, the chairman of Enterprise Saint John, said the energy corridor project would be a critical step as the city positions itself as a major energy player in the region.

"This isn't just one company anymore [talking about energy projects in the region]," Manning said.

"We are talking multiple companies looking at the opportunities here. Companies like Irving Oil, companies like Repsol, companies like Emera and others are all coming together and they are dialoguing on how we can make most effective and efficient use of assets and continue to build assets in this region and get product to market."

Across the U.S. border, the Maine governor is pinning a lot of his state's hopes on his new Canadian connections.

Baldacci said the proposed corridor would create new business ties between his state and the neighbouring provinces.

"The northeast energy corridor would be the backbone for a new commerce corridor of economic development and trade," he said.

"The corridor would help to attract significant direct investment to the region for job generation and business growth. The first phase of this project would attract about $2 billion in investment and create thousands of jobs in Maine and New Brunswick."