TransCanada's Energy East: Not enough oil for that pipeline, analysts say

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It announced Thursday that it will no longer be proceeding with its applications for the mega project "after careful review of changed circumstances".

In a statement released by TransCanada, the company said it is now reviewing the company's $1.3 billion carrying value.

Pipeline supporters and the Alberta government have criticized the NEB for changing its review scope and provincial Premier Rachel Notley urged the regulator to give more clarity on its process.

Energy East was conceived as a way to ship Alberta oilsands production as far east as Saint John's, New Brunswick.

TransCanada's Eastern Mainline project, also cancelled this week, would have added 279 kilometres of new natural gas pipeline facilities and nine compression units to the Canadian Mainline system used to deliver natural gas in Ontario and Quebec.

Some industry analysts have questioned the need for the Energy East project after TransCanada's 830,000-bpd Keystone XL project received U.S. approval to transport oil from Alberta to the U.S. Gulf Coast and Kinder Morgan won federal approval of its Trans Mountain pipeline project to almost triple the capacity of the 1,150-kilometre line running from Edmonton to Burnaby, 890,000 bpd. The move came after the National Energy Board said its review would now consider indirect greenhouse gas emissions.

"This is proof positive of two things - first, that climate action and pipelines don't mix".

"The pipeline changes the economics of the tar sands in a way that makes those [extraction] projects possible - and that's why they're responsible, ultimately, for such incredible increases in emissions", Scott said.

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The B.C. government doesn't share her view, however, and is now part of a court challenge against Trans Mountain being heard this week.

The Quebec government soiught an injunction against the Energy East pipeline project in March of 2016.

However, New Brunswick Premier Brian Gallant told the Globe and Mail he received assurances from Ottawa that the greenhouse gas assessment didn't represent an insurmountable hurdle for TransCanada. 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. Companies are not eager to invest in expensive tar sands projects unless the price of oil comes back up.

In November 2015, the Alberta government announced its climate plan, which gained support from a wide range of environmentalists and the CEOs of Suncor, Canadian Natural Resource Ltd. (CNRL), Shell and Cenovus.

"Energy, pipeline and climate issues have been among the most highly charged political debates in Canada for several years", said Abacus chairman Bruce Anderson. Speaking to reporters Thursday morning in Montreal, he said the decision was also the result of leadership from his city and other municipalities who insisted on getting reforms to the National Energy Board to ensure a fair process.

TransCanada had applied to build Energy East three years ago, seeking to open access for Western Canadian oil producers to the Atlantic Ocean for exports to Europe.

Since Keystone XL was proposed, oil prices have plummeted.