The transportation of crude was a key issue as the New England governors and Eastern Canadian premiers held their annual meeting Monday in La Malbaie, Que., where Gov. Paul LePage expressed his support for the $12-billion development.
"I think it's a great project," LePage said. "I think we need the oil and I think we need gas. Although I would prefer it to be natural gas, it is oil and it's needed."
TransCanada (TSX:TRP) Corp.'s Energy East Pipeline project, which still has to clear regulatory reviews, would ship up to 1.1 million barrels of crude per day from Alberta to Quebec in 2017. A 1,400-kilometre extension would be built to ship oil to the Irving Oil refinery in Saint John, N.B., a year later.
LePage said he would prefer to see oil shipped by pipeline rather than rail cars, citing the train derailment in Lac-Megantic, Que., a disaster he said was a "perfect storm" involving aging equipment and human error. The tracks used to transport western oil to New Brunswick pass through Maine.
Pat Binns, the Canadian consul general to New England, said the Energy East Pipeline is drawing more attention south of the border.
"It could be important for the northeast of the U.S. in terms of where its oil comes from," Binns said. "There's a few years down the road before all this happens, but people are looking at the options."
New Brunswick Premier David Alward, who left the meeting early to address a TransCanada board of directors meeting in Fredericton, said he continues to try to convince Quebec Premier Pauline Marois of the merits of the development. He said a steering committee set up by both provinces is reviewing the project.
Marois, who has remained non-committal on the proposal, said Monday she has concerns that would need to be resolved before it has her support.
"We have to make sure that we assess the situation as to where a pipeline might go and what impact that might have on a sensitive environmental area," she said.
The premiers and governors also passed a resolution urging federal authorities in Canada and the U.S. to take all necessary measures to ensure the safety of railway transport of hazardous materials. Marois said the agreement was important given what happened in Lac-Megantic.
"This is very urgent because we lost people in this tragedy, we lost the centre of a small city and we polluted a lake," she said of the July 6 disaster. The train was destined for the Irving Oil refinery in Saint John when it caught fire and exploded. Forty-seven people were killed or presumed dead.
Irving Oil plans to construct a $300-million marine terminal in Saint John to expand shipping capacity, a decision it has said was prompted by private sector interest in the Energy East Pipeline project.
Environmental groups have cautioned the proposal poses a fresh set of risks to the country's water supply if spills occur. First Nations groups have also expressed concerns about the project, saying they will not support it unless environmental protection and aboriginal and treaty rights are guaranteed.
New Hampshire Gov. Margaret Wood Hassan said all methods of carrying oil must be carefully scrutinized, including pipelines.
"All modes of transportation have their safety challenges and what we must be doing is using best practices for whatever the mode of transportation is," Hassan said.