New Brunswick

New Brunswick will not bankroll a pipeline proposal

The New Brunswick government is offering its full support for a possible west-to-east oil pipeline, but the province's energy minister says it is not opening up its wallet.

Energy Minister says the province can guarantee an 'efficient' permitting process

Energy Minister Craig Leonard, left, and Premier David Alward are in Alberta drumming up support for a west-to-east pipeline that could send crude oil to New Brunswick. (CBC)

The New Brunswick government is offering its full support for a possible west-to-east oil pipeline, but the province’s energy minister says it is not opening up the public purse to bankroll the project.

Premier David Alward and Energy Minister Craig Leonard are in Alberta this week, meeting with Premier Alison Redford and industry executives to discuss the pipeline concept.

TransCanada Corp. has said it wants to convert an existing, underused natural gas line to do the job, but it would be up to the National Energy Board to approve the projects. The company has not yet formally submitted a proposal to the regulator.

Along with paying for upgrading the existing natural gas pipeline, there would need to be money spent to bring the pipeline into New Brunswick.

The province's energy minister said he is not offering any money to the private companies who would build the pipeline. But Leonard said he is in Alberta to explain the benefits of shipping oil from the western province to Saint John, which has a deep water port and Canada's largest refinery.

"What we bring to the table is the ability to guarantee that there's going to be an efficient permitting process. We've seen that in the past with the [liquefied natural gas] terminal and that there's political support for the project," Leonard said.

"Again, it's driven by private enterprise. It's going to be private money that's going to be building this pipeline and it's going to be private industry that's going to be utilizing the pipeline in the end."

Leonard said construction of the pipeline could create as many as 2,000 jobs.

The energy minister said the pipeline could also mean upgrading the Irving Oil Ltd. refinery in Saint John.

"Obviously, when the bitumen comes down the pipeline it has to be upgraded and refined to move into the world markets and certainly that's significant, significant investment that could be taking place, and certainly, I think that would be on everybody's radar moving forward," he said.

Saint John Mayor Mel Norton said the city understands how energy projects can create many other opportunities in the region.

Norton said the pipeline could create many jobs for the city and province.

"It really is one of those opportunities that is once in a generation for a community and a province like New Brunswick. We have many people working in Alberta from across the province and in Saint John," Norton said on Tuesday.

"It is the kind of thing that could literally bring back our citizens, bring back our residents and completely change the direction of not only the New Brunswick but also the Saint John economy in a way that we’ve probably never seen in our lifetimes."

Eastern pipeline has ‘momentum’

New Brunswick’s premier has been talking about the pipeline for months but Alward said he has been witnessing a surge of interest in the idea on this trip.

"It's starting to be more real to people that there are other avenues," Alward said in Monday.

Alberta's oil is piped south to the United States, where a glut means producers are getting $20 to $40 less per barrel than the world price.

That means lower royalties to the province contributing to a potential multi-billion dollar deficit, which Leonard said is adding to the pipeline urgency in the western province.

"They know that they need pipeline capacity," the energy minister said.

"The eastern option seems to be the one that is picking up the most momentum over the last while."

"They know that they need pipeline capacity," Leonard said.

"The eastern option seems to be the one that is picking up the most momentum over the last while."

A line to the Irving refinery in Saint John would allow Alberta producers to charge the higher world price.

Leonard said if Alberta producers can earn a higher price for the oil, that is good for that province and Canada as a whole.

Don Scott, an Alberta cabinet minister and MLA for Fort McMurray, which Alward visited on Monday, is another proponent of the west-to-east pipeline.

Scott, who is also a Fredericton native, said the pipeline is a top priority.

"This is a mutually beneficial idea that has a lot of strength to it, and it's the number one issue for Alberta right now," he said.