West-East pipeline: Saint John, N.B., mayor urges work on 'in-between' provinces

CALGARY – A New Brunswick mayor says it’s important that producers understand the advantages of a pipeline that would carry western crude oil to eastern refineries.

Mel Norton of Saint John says he and other delegates have been in Alberta for the last couple of days talking about what’s been dubbed the Energy East pipeline.

Calgary-based TransCanada Corp. (TSX:TRP) said last month it wants solid backing from shippers before deciding whether to go ahead with a proposal to convert an existing 3,000-kilometre natural gas pipeline into one that could carry crude into Quebec.

A project could also include a 1,400-kilometre extension that would ship oil into the port city of Saint John, which is home to the Irving Oil refinery, Canada’s largest.

TransCanada would like any such line to ship as much as 850,000 barrels of oil a day by late 2017. The company is also behind the proposed Keystone XL pipeline that would carry oilsands bitumen to refineries in Texas.

Norton says it’s absolutely essential that producers know the opportunities a west-east pipeline could offer and commit to it.

“We want to talk to those producers that might not have heard about the Saint John opportunity and remind them that, first of all, you need to make commitments to put your barrels into that pipeline,” he said in Calgary on Tuesday. “That’s mission No. 1, so we’re talking to those producers in Alberta.”

Norton outlined some reasons why producers should be eager to see a pipeline extended into New Brunswick.

“They’ll never build a ship too big to bring it up the Bay of Fundy. You’ll never build enough capacity to bring to New Brunswick that we can’t fill those ships and take it out to world markets.” he said.

He described his province as a “place that is founded and grounded in industry.”

“It’s a community that is based on heavy industry, whether it’s Canada’s only (liquefied natural gas) terminal or whether it’s the Irving Oil refinery or whether it’s our Moosehead beer factory.”

Norton said the pipeline isn’t a tough sell in Alberta and New Brunswick, but he predicted it will take work to get all the “in-between” provinces on board.

He suggested it’s an exercise in relationship-building that would ultimately bring economic prosperity to everyone.

“Saint John is a place where we absolutely, 100 per cent want to see the pipeline end … We want to see it filled with Alberta oil and refined in Canada’s largest oil refinery and shipped out to world markets from our deep-water port.”

Norton said one of the reasons his delegation wanted to make the trip to Alberta now is because the Energy East pipeline isn’t at the top of people’s minds like the controversial Northern Gateway proposal. That pipeline would run from Alberta through British Columbia to the West Coast, where bitumen would be loaded onto tankers heading for Asia.

Proponents of Energy East say it would create jobs and reduce Eastern Canada’s dependence on foreign oil, thereby increasing the country’s energy security. Critics say they are worried about potential environmental damage from leaks because most of the line would be old and built to carry natural gas.

Saint John Conservative MP Rodney Weston, who was part of the delegation, said he believes there is strong support for the pipeline.

“We want people to know that when you have three politicians standing here it’s an obvious indication of the grassroots support that’s there,” he said. “We wouldn’t be standing here … if we didn’t feel very strongly that our communities are behind this and excited about it.”

Federal Natural Resources Minister Joe Oliver, who has backed the project, has said any concerns are unfounded and don’t take into account the need to increase Canada’s access to lucrative markets abroad.

New Brunswick Premier David Alward and Pauline Marois, his Quebec counterpart, agreed in February to create a working group to weigh the risks of allowing oilsands crude to be piped across their provinces. Their decision came shortly after Alward was in Alberta to meet with Premier Alison Redford and oil industry leaders.

New Brunswick Energy Minister Craig Leonard, who was also part of Norton’s visit to Calgary, added that his Atlantic province is behind a national energy strategy as put forward by Redford.

“We feel that a west-east pipeline is a perfect symbol of what can come from a strategy that looks at cross-jurisdictional discussions and (is) a project that can benefit all parties involved,” he said.

— With files from CHQR in Calgary