Energy East pipeline woes cast pall over Canada's Atlantic coast

Thu Dec 15, 2016 10:37am EST
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By Mitch MacDonald

CHARLOTTETOWN, Prince Edward Island (Reuters) - For years, heavy equipment operator Ashley Underhill has tried to defy the notion that one could only make a good living in Canada's poorer east coast by spending most of the time away from the family in the nation's western oil patch.

One reason Underhill had battled on, working on small private contracts, including snow clearing and wood cutting, was Energy East, a planned 4,600-km (2860-mile) pipeline between Alberta's oil sands and the east coast and the promise of an economic boost it could bring. But the approval for two western pipelines last month dimmed Energy East's prospects and now Underhill is looking to work in the oil sands in western Canada.

"People are really scrounging out here in the Maritimes, looking for work," said Underhill of Miramachi, New Brunswick. "Unless Energy East comes a lot sooner, I’ll probably inquire about going out (west)."

TransCanada Corp's Energy East pipeline is projected to bring nearly 5,000 construction jobs to New Brunswick, which is its final destination.

The project was slated to begin in 2017 if approved and enjoys broad support in all Atlantic provinces - New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador. But while the government appointed a new panel on Monday for the pipeline's regulatory review, it has yet to say when it will restart the process that was stalled in September. Meanwhile, projects in the west have already cleared key hurdles.

Last month, Ottawa approved Kinder Morgan Inc's Trans Mountain pipeline expansion to the Pacific coast and Enbridge Inc's Line 3 to the United States, making it less pressing to build another export route.

If those pipelines succeed, "is there a need for Energy East in the next five to 10 years? The answer's probably not," said AltaCorp Capital analyst Dirk Lever.

TransCanada spokesman Tim Duboyce said Energy East would deliver Canadian crude to eastern refineries that currently import foreign oil, something other routes could not accomplish. "Shippers remain firmly committed," he said.   Continued...

Smoke is released into the sky at a refinery in Wilmington, California March 24, 2012. Picture taken March 24, 2012. REUTERS/Bret Hartman/File Photo