Saint John mayor calls on feds to revive Energy East after $4.5B Trans Mountain deal

Saint John Mayor Don Darling is calling on the federal government to revive the Energy East pipeline in light of its decision Tuesday to spend $4.5 billion to purchase the Trans Mountain pipeline and save the contentious expansion to the B.C. coast.

Last fall, the TransCanada Corp. abandoned its plan to build a pipeline to move crude oil from Alberta to an export terminal in Saint John, blaming new environmental criteria for the project.

But Darling wonders whether the federal government might now intervene.

"It does not seem fair that we couldn't get the level of support," he said. "I mean, it seems like this is a project that the federal government is going to push through at all costs."

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"In the case of the Energy East project, I mean, I think the project had a lot of merit. The oil continues to be shipped here by rail bed. We just couldn't seem to get the level of commitment that is being demonstrated … on the West Coast."

Jim Irving, co-chief executive officer of J.D. Irving Limited, also addressed the issue with reporters Tuesday, following his luncheon address marking the Saint John Chamber's 200th anniversary.

"I'm not going to get into the politics of it, that's not my job. But I will tell you we should not let go of Energy East. It's still the right thing for the country," he said.

"This is not just about our region, this is about Canada. You need to get the oil to market on a competitive basis, absolutely essential. And for this part of the country, for New Brunswick in particular, Saint John, [it's] absolutely very important.

"So we'd encourage everybody in Ottawa not to let go. Stick with it."

Federal Finance Minister Bill Morneau called the decision to purchase the existing Trans Mountain pipeline and the proposed expansion from Kinder Morgan "an investment in Canada's future."

Kinder Morgan had estimated the cost of building the expansion would be $7.4 billion, but Morneau insisted the project will not have a fiscal impact.

He said many groups have already expressed interest in eventually buying the pipeline, including Indigenous groups and pension funds, but it will operate as a Crown corporation for now.

The decision to buy the pipeline came after Kinder Morgan threatened to abandon the project, which is facing opposition and delays by the B.C. government.

Energy East further behind

Federal officials pointed out Tuesday that Trans Mountain was approved by both the National Energy Board and the federal cabinet in 2016, while Energy East never reached that point because of delays to the hearings.

Analysts also said the approval of other pipelines, including Trans Mountain and Keystone XL, weakened the business case for Energy East.

Still, Darling said he plans to follow up with Energy East proponents to see if it's something they can move on.

The proposed Energy East project would have carried more than one million barrels of oil every day from Alberta and Saskatchewan across the country to be refined or exported from plants in New Brunswick and Quebec.

29 more tankers a month

It would have added 1,500 kilometres worth 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.

The Trans Mountain agreement, which must still be approved by Kinder Morgan's shareholders, is expected to close in August.

The twinning of the 1,150-kilometre-long Trans Mountain pipeline between Strathcona County, near Edmonton, and Burnaby, B.C., will nearly triple its capacity to an estimated 890,000 barrels a day and increase traffic off B.C.'s coast from approximately five tankers to 34 tankers a month.