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Oil industry associations express displeasure at loss of Energy East

Ripples from TransCanada's decision to shelve the Energy East and Eastern Mainline pipeline projects have continued to roll through Canada's energy industry, with several industry organizations and others continuing to express disappointment at the loss of the $15.7 billion project.

The Canadian Energy Pipeline Association acknowledged that the decision was difficult, but noted that Canada will lose out because of it.

"TransCanada was forced to make the difficult decision to abandon its project, following years of hard work and millions of dollars in investment. The loss of this major project means the loss of thousands of jobs and billions of dollars for Canada, and will significantly impact our country's ability to access markets for our oil and gas," the association said in a statement. 

Energy East was scrapped after a decision by the National Energy Board panel reviewing the project to include upstream and downstream greenhouse gas emissions in its considerations. 

"This is evidence of how a lack of clarity and an unclear decision-making process regarding pipeline projects in Canada are challenging the energy sector's ability to be competitive in the world market," CEPA stated. "Pipelines are the only viable way to move large quantities of oil and natural gas to markets, safely and responsibly. With global demand for energy expected to rise and extensive supply potential in Western Canada, Canada will be missing out on a significant economic opportunity if governments do not see value in pipeline projects such as Energy East."

The Canadian Association of Oilwell Drilling Contractors lay the blame for the loss of the pipelines squarely at the feet of the federal government. 

"We are extremely disappointed, but not surprised," said CAODC President Mark Scholz.

Scholz said that the NEB changed its process based on a public comment period when, according to the announcement regarding GHG emissions in August, around 820 public submissions were received. 

"It's sad, confusing, and frustrating when 820 letters can lead to derailing a project supported by thousands of Canadians across the country; a project with the potential to provide thousands of jobs and billions of dollars in royalties and tax revenues," he said. "This outcome sends a message to potential investors that the rules you spend considerable time, money and effort to follow in Canada are subject to continuous change at a moment's notice.

"Since 2012, Canada has spent over $100 billion importing oil from other countries, many of which have deplorable environmental and human rights records," Scholz continued. "Right now we can't even supply our domestic markets with Canadian oil and gas. It's disappointing that 820 letters can change circumstances in a way that leads to a loss of thousands of Canadian jobs, a compromised future for Canada's economy, and the cancellation of building a safer way to transport our responsible, ethical resources to Canadians and the rest of the world."

Meanwhile, the organization overseeing Ontario's construction workers also weighed in with its disappointment in the decision.

"This is a lost opportunity for nation-building and for the environment, and construction workers are deeply upset," said Patrick Dillon, Business Manager of the Provincial Building and Construction Trades Council of Ontario, in response to the cancellation of the Energy East pipeline. "We have worked with TransCanada laying the groundwork to provide enough trained and qualified workers to ensure that there would be no delays due to staffing. With this abandonment of the project, a rare opportunity to engage in nation-building has been lost." 

TransCanada projected that some 14,000 jobs would be generated nationally, including construction and operation of the lines. According to Dillon, those jobs would have had an impact on northern Ontario especially. 

"Energy East represented a lost opportunity to strengthen the country much as the creation of the Canadian Pacific Railway did nearly 150 years ago," said Dillon. "It is a shame that a cumbersome regulatory environment has caused a $15 billion investment to go south. We support stringent regulations that are balanced and fair that protects workers, communities and investors. However, the Energy East process tipped the scales too far in the wrong direction, to the detriment of construction workers and Ontario's economy."

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Pipelines

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