By October 5, 2017 0 Comments Read More →

TransCanada terminates Energy East and Eastern Mainline pipeline projects

Energy East

Energy East protesters Photo: Council of Canadians.

NEB decision to consider upstream and downstream emissions likely contributed to Energy East decision

TransCanada Corporation  announced Thursday morning it will no longer be proceeding with its proposed Energy East Pipeline and Eastern Mainline projects, according to a press release.

Columnist Markham Hislop warned that the NEB should reconsider calculating upstream and downstream emissions into projects before something like this happened. Read that column here.

Following is a statement from TransCanada President and Chief Executive Officer Russ Girling:

“After careful review of changed circumstances, we will be informing the National Energy Board that we will no longer be proceeding with our Energy East and Eastern Mainline applications. TransCanada will also notify Quebec’s Ministère du Developpement durable, de l’Environnement, et Lutte contre les changements climatiques that it is withdrawing the Energy East project from the environmental review process.

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“We appreciate and are thankful for the support of labour, business and manufacturing organizations, industry, our customers, Irving Oil, various governments, and the approximately 200 municipalities who passed resolutions in favour of the projects. Most of all, we thank Canadians across the country who contributed towards the development of these initiatives.

We will continue to focus on our $24 billion near-term capital program which is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an eight to 10 per cent range through 2020.”

The Canadian Energy Pipeline Association(CEPA) says they are extremely disappointed that the Energy East Pipeline and Eastern Mainline Project will not be moving forward. TransCanada was forced to make the difficult decision to abandon its project, following years of hard work and millions of dollars in investment.

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, according to CEPA.

TransCanada’s announcement follows the NEB Energy East Panel’s decision to consider upstream and downstream greenhouse gas (GHG) emissions for the projects.

According to CEPA, TransCanada’s decision is evidence of how a lack of clarity and an unclear decision-making process regarding pipeline projects in Canada are challenging the energy sector’s ability to be competitive in the world market.

As a result of its decision not to proceed with the proposed projects, TransCanada is reviewing its $1.3 billion carrying value, including allowance for funds used during construction (AFUDC) capitalized since inception and expects an estimated $1 billion after-tax non-cash charge will be recorded in the company’s fourth quarter results.

TransCanada stopped capitalizing AFUDC on the project effective August 23, as disclosed on Sept. 7.

In light of the project’s inability to reach a regulatory decision, no recoveries of costs from third parties are expected, the company said.

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Posted in: Canada

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