Canadian Manufacturing

Risks of Energy East Pipeline outweigh rewards, OEB report finds

Ultimate decision on $11.3B project rests with NEB, federal cabinet, however



TORONTO—There is an imbalance between the risks and rewards of TransCanada Pipelines Ltd.’s Energy East Pipeline, according the Ontario Energy board’s report on its consultation and review process released Aug. 13.

The regulator was charged with investigating the impacts of the project on Ontario’s economy, the province’s natural gas consumers, the environment, as well as local and Aboriginal communities. The consultation process for the proposed $11.3 billion project was the more comprehensive investigation the OEB has ever undertaken, commencing last year.

“The primary concerns of Ontarians are about pipeline safety, and the impact of Energy East on their lakes, rivers and drinking water in the event of a spill,” Rosemarie Leclair, chair and CEO of the OEB said.

Leclair noted the OEB was not able to state the pipeline met the hgihest available technical standards for public safety and environmental protection as TransCanada had not filed a complete application. The board also said the economic benefits for the province are likely to be modest, despite almost half the pipeline flowing through Ontario.

“There is an imbalance between the economic and environmental risks of the Project, and the expected benefits for Ontarians. The OEB’s advice set out in this report is intended to ensure a better balance between the risks and benefits for Ontarians,” the agency said.

The report also made a number of recommendations to lessen the environmental impact of the project, and recommended TransCanada ensure communities near Energy East have an ongoing role in the operation and construction of the proposed pipeline.

“Community engagement should be seen as another aspect of the life-cycle approach for operating Energy East,” Leclair said. “We also believe that treaty and Aboriginal rights must be respected.”

Union Gas Ltd., a natural gas storage, transmission and distribution company based in Ontario, which was an early opponent of the pipeline, applauded the OEB’s findings.

“We have consistently taken the position that we can support the Energy East project subject to Ontario natural gas customers not being impacted in terms of natural gas supply and related costs,” Steve Baker, president of Union Gas, said. “We want assurance that Ontario natural gas customers will not bear the costs and risks related to the Energy East oil pipeline and we continue to be open to finding a satisfactory resolution of these issues with TransCanada.”

Despite the OEB’s findings, the ultimate decision on the pipeline is out of its hands. The National Energy Board and the federal cabinet will determine whether or not the project will move forward. The NEB will hold a public hearing on the engineering, economic, environmental and social aspects of TransCanada’s application to determine whether it is in the Canadian public interest.

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