New Brunswick

Energy East approval is up to federal government, minister reminds New Brunswickers

Whether the Energy East pipeline gets approval is solely up to the federal government, Jim Carr says, and market conditions, not the regulatory process, will be to blame if the company backs out.

Natural resource minister says regulatory process can't be blamed if TransCanada abandons project

Pipeline or no pipeline? Minister of Natural Resources Jim Carr says the government of Canada has final say in whether Energy East will be allowed. (Darryl Dyck/Canadian Press)

When it comes to the fate of the Energy East pipeline, Canada's natural resources minister is certainly keeping the mystery alive.

Whether the pipeline project gets approval is solely up to the federal government, Jim Carr said in an interview Thursday with Information Morning Fredericton.

But whether pipeline builder TransCanada itself sticks with the project is up to the company, and that decision has to do with market conditions, added Carr, who said he called the CBC to get his message out.

If TransCanada decides to abandon the pipeline, it won't be the fault of the Liberal government, he said.

"The message is that the principles that will guide the government of Canada's decision in this are unchanged," he said. "What has changed are market conditions."    

Earlier this month, TransCanada was granted a 30-day suspension of its application so it could re-evaluate the viability of the pipeline, which would carry 1.1. million barrels of crude oil a day from Alberta to Saint John. 

The suspension came after the regulator, the National Energy Board, expanded its planned review of the project, saying it will assess its indirect contributions to upstream and downstream greenhouse gas emissions.

The reason that the government has the final decision is people elected us to determine the national interest on major infrastructure projects.-Jim Carr

The suspension is up Oct. 8, and the company has told Premier Brian Gallant that it could drop the controversial project altogether.  

But regardless of the NEB's wider assessment plans, Carr said nothing has changed in the way the federal government plans to evaluate the pipeline project. 

The government will use the principles it announced in January 2016, he said.

The principles include basing decisions on science, taking into account the views of the public and affected communities, assessing project-related greenhouse gas emissions, and consulting with First Nations.

Carr disagreed with people who have complained that changes and a lack of clarity in the regulatory process — Gallant is one — have made things difficult for TransCanada

"Don't claim that changes to the regulatory process is the reason why their opinion of the viability of the project has changed," Carr said.

"Though the National Energy Board is going about its own assessment … it's the government of Canada who will make the decision, will assess this project the same way as it has assessed others."

Suspension of the Energy East pipeline is bad news for New Brunswick, says Premier Brian Gallant. 1:09

However, New Brunswick Opposition Leader Blaine Higgs said Gallant should be screaming about the difficulties in the regulatory process. 

"It's pure damage control by the federal government," Higgs said in an interview Thursday after Carr made his comments. 

Higgs said the federal government is subjecting TransCanada's project to conditions so it won't come to pass. 

"Despite all of the commitments they have for long-term use of this pipeline they do not have the assurances, no matter what they do, it will ever get approved," he said.

But Carr said markets are not the same now as they were when the project was proposed, he said, and TransCanada is making decisions based on the latest conditions, which have been affected by approvals of other pipelines, including the Keystone XL pipeline and the Trans Mountain Pipeline expansion. 

"The demand-supply ratios are different," Carr said. "All those decisions impact their business case."

Government steps in

If the Energy East project isn't approved by the National Energy Board, an independent agency, the government will consider everything the NEB has to say in its assessment.

The National Energy Board is there to "undertake a credible assessment process," and will do that using the principles the federal government provided.

But the ultimate decision is with government.

"The reason that the government has the final decision is people elected us to determine the national interest on major infrastructure projects," he said.

"At the end of the process, not only will the government of Canada decide, but of course be held accountable for the decision it makes."