Edmonton·Analysis

Pressure building for Alberta government to get pipeline started before next election

During the boom years not long ago, Maren Stevens would hire almost anyone who walked through the door of his oilfield welding and service business. His hopes for a return of that kind of presperity were dashed Thursday when the news was announced that the Energy East pipeline project was dead.

End of Energy East a big setback for Premier Rachel Notley's NDP government

Taskmaster Technologies in Leduc and other Alberta companies were hoping the Energy East pipeline project would help re-invigorate the province's economy. (CBC)

During the boom years not long ago, Maren Stevens would hire almost anyone who walked through the door of his oilfield welding and service business.

It was that competitive.

"Everybody was employed and working, and a lot of money was being made and spent," said Stevens, president of Taskmaster Technologies Inc. in Leduc.

For Stevens, and many others, hopes for a return to those boom days were dashed Thursday when the news was announced that the Energy East pipeline project was dead.

"I was disappointed," Stevens said during an interview on the shop floor of his business, where he has rehired about half the staff he had to let go when the economy tanked in 2015.

Maren Stevens, president and CEO of Taskmaster Technologies in Leduc, was hoping the Energy East pipeline project would give the industry a much needed boost. (CBC)

The end of Energy East was a big setback for Alberta Premier Rachel Notley's government.

But even before TransCanada made the official announcement, there were clear signs the Energy East project was on shaky ground.

Last month, TransCanada suspended its application to the National Energy Board and hinted it might decide not to pursue the project in light of the regulator's new, tougher review process.

Energy East would have carried more than one million barrels of oil a day from Alberta and Saskatchewan to a refinery in New Brunswick. It would have added 1,500 kilometres of new oil pipelines to an existing network of more than 3,000 kilometres, which would have been converted from carrying natural gas to carrying oil.

Regardless of Notley's hopes, and New Brunswick Premier Brian Gallant's pipeline dreams, the reality of lower oil prices and a changed regulatory process spelled the end to the plan, which could have moved more Alberta oil and opened up new international markets.

To those whose business ebbs and flows with fluctuations of oil prices and demand, the reasons really don't matter. It's seen as a lost opportunity.
Alberta Premier Rachel Notley and New Brunswick Premier Brian Gallant were united in their support for the now-defunct Energy East pipeline project. (CBC)

"That's kind of what everybody thought it would bring for the oil and gas side," Stevens said. "Back to the boom. But maybe the boom isn't coming now."

With the economy improving somewhat, the NDP government is in the second half of its political mandate and needs a big win.

A new pipeline to open offshore markets would be a political lifeline for the first-term government, and signal an upturn in fortunes.

The multi-billion-dollar investment and the injection of jobs would put Alberta's economy on a more sound footing, and silence critics who claim the Climate Change Leadership plan, with its unpopular carbon tax set to increase again in January, was all for naught.

In the fall of 2015, the new Alberta government assured the public the climate change plan, which also includes a cap on carbon emissions, would pave the way for pipeline expansion.

It also claimed the comprehensive plan and its price on carbon could finally win Alberta social licence for a robust energy industry, and silence detractors, including well-financed international environmental groups.

'There's still tomorrow'

Notley issued a statement Thursday, urging the National Energy Board to explain what future project reviews will look like.

Energy Minister Marg McCuaig-Boyd called Thursday "a disappointing" day.

"But there's still tomorrow," she said.

Yet for the government, those tomorrows appear to be ticking away.

While Alberta's climate change plan was clearly cited by Prime Minister Justin Trudeau when the federal cabinet  approved Enbridge's Line 3 pipeline replacement and Kinder Morgan's Trans Mountain pipeline almost a year ago, there are lingering questions about whether the Trans Mountain project will proceed.

Twinning the Trans Mountain pipeline would nearly triple the capacity of the 1,150-kilometre line that runs from Edmonton to Burnaby, B.C., to 890,000 barrels of oil per day.

The $7.4-billion construction project would add 980 kilometres of new pipeline and reactivate 193 km of existing pipeline along the route.
As the clock ticks towards the next provincial election, Premier Rachel Notley's government is hoping at least one major pipeline project to open access to international markets will soon be underway. (CBC)

This week, six First Nations, two environmental groups, the cities of Vancouver and Burnaby and the new NDP government in British Columbia are all challenging Ottawa's approval of the project in a judicial review at the Federal Court of Appeal in Vancouver.

On the opening day of the hearing Monday, the Musqueam First Nation withdrew from the Federal Court of Appeal case.

"We still have some unresolved issues with respect to the approval but we feel it's no longer in our best interest to proceed with the [judicial review] at this time," said Musqueam councillor Wendy Grant-John.

The other groups will proceed with the challenge, which will continue to be heard next week.

Trans Mountain announced in early September that six subcontractors had been selected in anticipation of planned construction to begin this fall.

Despite the court challenge, work is proceeding, with the majority of pipeline construction set to take place in 2018 and 2019, Trans Mountain project spokesperson Ali Hounsell said in a statement to CBC News.

"A number of construction activities are scheduled to begin this fall, including terminal construction activities and site preparation," Hounsell said in an email.

With Alberta's next provincial election scheduled for 2019, Notley's office may be hoping for a photo finish to 2017 — a photo that shows the premier in a hard-hat, with a shovel in the ground, at the official launch of the Trans Mountain expansion project.

The first day of winter is Dec. 21.