TransCanada's Energy East Pipeline Won't Get Support Of Greater Montreal Mayors

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Montreal-area municipal leaders are rejecting TransCanada Corp.'s controversial proposed Energy East pipeline, saying its economic benefits are paltry when compared with the possible costs of an oil cleanup.

The Montreal Metropolitan Community, which represents 82 jurisdictions, said Thursday it opposes the project and will defend that position at Quebec environmental impact and National Energy Board hearings.

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Montreal Mayor Denis Coderre speaks during a news conferrence in Montreal, Dec. 21, 2015. (Graham Hughes/CP)

Montreal Mayor Denis Coderre, the current president of the organization, said the decision was unanimous and that the environmental risks far outweigh any economic benefits for the region.

The announcement prompted a sharp political rebuke from the Opposition in Alberta.

"You can't dump raw sewage, accept foreign tankers, benefit from equalization and then reject our pipelines,'' Wildrose Leader Brian Jean said on Twitter.

The proposed pipeline would take Alberta crude as far east as an Irving Oil refinery in Saint John, N.B., and would be capable of carrying up to 1.1 million barrels a day from the West to the East.

The project would include existing TransCanada (TSX:TRP) pipeline as far east as Montreal, plus new pipeline to be constructed through Quebec.

Coderre said the project is worth about $2 million a year in economic benefits to the Montreal area, while the cleanup of a major oil spill could cost between $1 billion and $10 billion.

In a later statement, Jean said the Alberta NDP government's strategy around pipelines is failing and that it's time Premier Rachel Notley started standing up for the province against ''unfair attacks.''

"His opposition to the Energy East pipeline is nothing short of hypocritical."

"While Mr. Coderre dumps a billion litres of raw sewage directly into his waterways and benefits from billions in equalization payments, his opposition to the Energy East pipeline is nothing short of hypocritical,'' Jean said.

"Montreal buys millions of barrels of foreign oil from dictatorships, but it is rejecting oil from their friends in Confederation. It's disgraceful! This is a project that will benefit all of Canada and will improve our GDP by $55 billion. It's time that Rachel Notley realizes this and starts fighting for Alberta.''

Environmental consultations were held across the Montreal territory last September and October and Coderre said the majority of the 140 groups that submitted briefs were opposed to the project.

TransCanada didn't participate in the hearings, a decision Coderre called ''arrogant."

"We're against it because they didn't do their homework, obviously,'' he said. "If they had showed up, they would have been a bit more respectful of the process.''

In December, TransCanada filed an amended application with the National Energy Board that included some 700 changes to deal specifically with environmental concerns. One month earlier, the company announced it wouldn't build an oil export terminal in Quebec.

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Protestors demonstrate against the Energy East and Line 9B Pipelines during a rally in Montreal, on Oct. 10, 2015. (Graham Hughes/CP)

The company estimates the cost of the pipeline will now come in $15.7 billion, up from the original $12 billion price tag. That amount doesn't count the existing pipeline assets that will be converted for use in Energy East.

The pipeline is unpopular in Quebec and the provincial government has said it wants the province to serve as more than just a passageway for TransCanada, urging the company to demonstrate real economic benefits for the province.

Greenpeace applauded Coderre's announcement, saying it should send a signal to Prime Minister Justin Trudeau to reject the project.

"Trudeau already said that pipelines projects must be accepted by the local communities before they get approved,'' said spokesman Patrick Bonin.

"The MMC's decision is a clear no to TransCanada's project, which means that it cannot go forward.''

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