Controversial Energy East Oil Pipeline Cancelled

It's that seventies show all over again as a Trudeau gets blamed but it's not his fault; it's simple economics.

TransCanada has cancelled the Energy East pipeline that was to run all the way from the oil sands in Alberta to eastern Canada, at the cost of almost C$ 16 billion. The company blamed "changed circumstances" and a recent National Energy Board ruling that demanded that “indirect” greenhouse gas emissions be taken into account.

In Alberta, it’s that seventies show all over again, blaming Prime Minister Trudeau like they blamed his father Pierre. But really, this pipeline was, if not a sham, definitely Plan B if the Keystone pipeline was rejected by President Obama (which it was)- as Chris wrote in TreeHugger 4 years ago, “Supporters of Keystone XL have claimed that were it to be rejected, TransCanada would simply find another path to export the oil.” Energy East was a really expensive Plan B thought up to pressure the approval process for Keystone or to provide an alternative, albeit really expensive route.

I love GreenPeace but I really don't think they or any of the protests had much to do with this decision. TransCanada has been munching on protesters for decades. What really happened is that President Trump has reversed Obama (so what else is new?) and the Keystone pipeline is going ahead. So for that reason alone, the really expensive Energy East pipeline makes no sense. As Globe and Mail writer Jeffery Jones notes, “As it stands, Energy East is a contingency plan whose time never came.”

And as Justin Trudeau notes, as quoted in the Globe and Mail, other things have changed.

"It's obvious the market conditions have changed fundamentally since Energy East was first proposed," Mr. Trudeau said. Oil prices were roughly $90 (U.S.) a barrel when the company first broached its plan five years ago, while the drop in prices resulted in the industry lowering its forecast for oil sands production in 2030 by more than one-million barrels a day.

There are other considerations too. It takes a lot of energy to pump that oil through a pipe, and it was a very long pipe indeed. Much of the pipe is currently used to supply natural gas and was going to be converted, which worried a lot of people who burn natural gas, and in fact demand for shipping gas has grown significantly recently; TransCanada is now making money shipping gas through the pipe, when making money off Alberta tar sands oil pushed all that way was always a question mark.

It is convenient to blame environmentalists, greenhouse gas regulation, the Prime Minister and the National Energy Board, but in fact TransCanada simply no longer needed Plan B. Donald Trump, falling oil prices and rising natural gas demand killed Energy East, not Justin Trudeau.

The lesson here is that if you care about carbon and about the environment, you have to use less fossil fuel. Protesting is important but going after supply won't work. Instead, kill demand- by going electric, by riding a bike, by super-insulating your house. That's the way to kill a pipeline.