CALGARY — New Brunswick Premier Brian Gallant says he will do whatever necessary to make sure the $15.7-billion Energy East pipeline proceeds and delivers crude — and jobs — to his province.
Gallant was responding to a surprise announcement Thursday that TransCanada Corp. (TSX:TRP) wants to suspend for now its application to build the proposed 4,500-kilometre pipeline, which would carry crude from Alberta and Saskatchewan to refineries in Saint John, N.B., and other parts of Eastern Canada.
TransCanada said it has filed a letter to the National Energy Board asking for a 30-day suspension for the project so it can study how the NEB's decision last month to consider the Energy East's contribution to upstream and downstream greenhouse gas emissions will affect "costs, schedules and viability."
Earlier news about Energy East:
TransCanada is calling the changes to the regulator process "significant," and warns that the entire project and related Eastern Mainline pipeline project could be cancelled.
It indicated that it may need to record a writedown of its investment in the project, if it is discontinued.
"Should TransCanada decide not to proceed with the projects after a thorough review of the impact of the NEB's amendments, the carrying value of its investment in the projects as well as its ability to recover development costs incurred to date would be negatively impacted," the company said in a statement.
In a statement late Thursday, Gallant said he spoke with TransCanada CEO Russ Girling and was reassured that the company is still considering going ahead with the NEB process.
But a dour-sounding Gallant said the possible cancellation of the project would be a big blow to the province that hoped to see the creation of thousands of jobs linked to the pipeline.
"There's no sugar coating it, TransCanada suspending its application in order to re-evaluate the viability of the Energy East pipeline project is not good news for those who want to see that pipeline built," he stated.
"We will do everything we can to have TransCanada continue the process, but there's no doubt that it is possible they won't."
It's another blow to the massive project after a review was derailed last year when members of the regulatory panel overseeing the NEB hearings resigned amid questions about a potential conflict of interest.
In January, the NEB invalidated nearly two years of decisions made by the previous panel and a new panel was appointed.
The Energy East review is taking place at the same time that the government considers a sweeping overhaul of the NEB following a report in May that said the system is broken and the NEB should be split into two agencies.
TransCanada had pitched Energy East as a "Canadian solution to a Canadian challenge."
It said the 1.1 million barrels of crude that would be delivered across the country each day would displace hundreds of thousands of barrels of foreign oil currently imported into Eastern Canada daily.
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