TransCanada announced on Thursday a two-year delay in the completion of its proposed Energy East pipeline, which would transport tar sands oil across Canada from Alberta to New Brunswick. The Committee on the Status of Endangered Wildlife in Canada recommended that beluga whales in the St. Lawrence River be declared endangered, forcing TransCanada to scrap a planned oil export terminal in Cacouna, Quebec, where the whales migrate and raise calves.
The company now has two pipelines on hold due to environmental concerns, as Keystone XL is also stalled. Here are a few takeaways from the tar sands industry’s most recent setback.
The more you know
The Harper government promised “timeline certainty” for the Energy East pipeline in February 2014, which is government-speak for a fast-tracked review process. TransCanada had good reason to seek an expedited approval process: The more the public learns about tar sands pipelines, the less they like them.
“The delay [from 2018 to 2020] gives stakeholders and people living along the route a chance to engage,” says Antony Swift, the deputy director of NRDC’s Canada project (disclosure). “The Harper government was in some ways trying to short circuit the public by fast-tracking the process.”
Look at what happened to the Keystone XL pipeline. In March 2014, 65 percent of Americans favored the project. By January 2015, a different poll found that support had dropped to just 41 percent, with more than one-third of Americans saying they needed more information to make a decision. While the poll doesn’t show what caused support to wither, it’s reasonable to assume that the public became increasingly concerned about tar sands’ effects on local environments and climate change. The president himself has joined the growing chorus of anti-KXL campaigners, describing tar sands extraction as “extraordinarily dirty.”
Enbridge’s Northern Gateway pipeline has traveled a similar trajectory. When the project was officially proposed in 2006, opposition was limited to local environmentalists. First Nations and national conservation groups soon joined the movement and started a grounds well. By 2014, the Canadian government’s own focus groups found “little enthusiasm” for Northern Gateway even among people who said they supported it. The participants expressed worries about the environmental impacts, especially if a major spill were to occur (Enbridge doesn’t have the best track record for those). Although the Canadian government eventually approved Northern Gateway in June 2014, it did so with 209 conditions. The builder’s virtual silence on the pipeline in the ensuing months led the news network CBC to speculate in February that the project has been abandoned.
Energy East isn’t quite as moribund as Northern Gateway, but it’s developing a decidedly unhealthy pallor. A November poll found that just 50 percent of Canadians favored construction of the pipeline. In Quebec, 33 percent of respondents expressed support, and that was before the government declared the original terminal dangerous to beluga whales. The history of public opinion on Keystone XL and Northern Gateway suggests those numbers are likely to drop.
The “inevitability” argument is a loser
Proponents of the Keystone XL pipeline claimed that tar sands would be extracted with or without KXL, so resistance would be futile. Kansas Senator Pat Roberts, for example, said in November, “There is simply no option available that would somehow prevent Canada from developing these oil sands…It’s happening, and it will continue to happen.” The U.S. State Department itself temporarily bought into this reasoning, concluding in its 2014 report that the pipeline would have little impact on tar sands development.
That position is now untenable. The delaying of Energy East, along with the near collapse of Keystone XL and Northern Gateway, shows that pipelines are far from inevitable. Without pipelines, tar sands extraction will stall. Energy companies have canceled at least eight tar sands projects in the last two years because they aren’t profitable at current oil prices. The lack of pipelines, which cut transport costs by as much as two-thirds, has been a major factor in those cancellations. For these reasons, the U.S. Environmental Protection Agency urged the State Department to rethink its assumptions about the inevitability of tar sands development.
TransCanada is making new enemies
Who opposes tar sands pipelines? Environmentalists, First Nations and Native Americans, and farmers and other local landowners who don’t want crude oil passing through or near their property. Pipeline builders expect to meet these foes when they propose a new project.
They don’t expect to be fighting utilities, too. In the case of Energy East, however, the pipeline would reduce the capacity of an existing natural gas pipeline so that tar sands can flow. The project enraged the heads of Canadian utilities, who claim that the pipeline would increase natural gas prices on the country’s eastern coast.
“I refuse [to accept] that the Children’s Hospital of Montreal pays a higher price for its gas because western Canada needs to export its oil to the international markets,” Sophia Brochu, the head of Gaz Métro, told The Globe and Mail. “What TCPL [TransCanada Pipelines Ltd.] is asking now is that the gas customers subsidize the oil shippers, and I don’t believe this is in the best interests of Canada.”
TransCanada denies that the project would raise gas prices, but utilities are not convinced. If TransCanada wants a new pipeline, they say, it should build one somewhere else and leave the gas pipeline alone. If and when TransCanada seeks official approval for Energy East, they will face a powerful enemy—bigger, perhaps, than even a pod of toothed whales.
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