Keystone XL pipeline postponement bid ups pressure on Energy East proposal

OTTAWA – Keystone XL is dead! Long live Energy East!

Like a game of pipeline whack-a-mole, a bid by TransCanada Corp., to suspend its controversial, north-south Keystone XL pipeline proposal has elevated the west-east Energy East pipeline plan to the top of Canada’s political agenda.

“With Keystone now delayed, even more important we approve Energy East,” Saskatchewan Premier Brad Wall posted on his Twitter account Tuesday while the U.S. State Department was still chewing over TransCanada’s postponement bid.

“There’s no doubt it puts a whole lot more attention now on Energy East,” Donald Arsenault, New Brunswick’s energy minister, told The Canadian Press in an interview.

TransCanada’s proposed 4,600-kilometre Energy East pipeline is designed to move 1.1-million barrels of crude oil a day from Alberta and Saskatchewan to refineries in Eastern Canada.

Pipeline politics have been a Canadian staple for the past decade and that won’t change with the departure of Stephen Harper’s Conservatives and the arrival of Justin Trudeau’s Liberals in Ottawa.

Trudeau will be sworn in Wednesday as the 23rd prime minister and his newly appointed cabinet can expect to begin fielding pipeline calls almost immediately.

“We’ll definitely get on the horn right away to make contact with the minister and show how important this project is for not only New Brunswick but for the country,” Arsenault said.

Trudeau’s Liberal team was rocked in the final week of last month’s federal election after The Canadian Press revealed his campaign co-chair Dan Gagnier was advising TransCanada on how to lobby a new government on Energy East. Gagnier resigned and the Liberals went on to a stunning majority, but the incident raised the hackles of conservatives and progressives on either side of the polarized pipeline debate.

Trudeau has always supported Keystone XL, a 1,897-kilometre pipeline that would move 830,000 barrels a day of Alberta bitumen to Nebraska and then on to Gulf Coast refineries.

The Liberal leader has been more ambivalent about Energy East, saying it needs a more rigorous environmental assessment. Trudeau has also been a vigorous proponent of a more aggressive Canadian climate change policy — something environmental groups say cannot co-exist with new pipelines, which equate to expanded oil sands production.

“There’s just no way to square taking strong action on climate change and moving forward with these pipelines,” Adam Scott of Environmental Defence said Tuesday.

Scott predicts Energy East will become the next big battleground for environmentalists.

“If it’s possible to kill a project like Keystone, then you can sure bet that Energy East will face an even stronger opposition.”

That’s not to say the Keystone developments are all unwelcome for the incoming government.

TransCanada’s postponement of its licence application could clear a significant Canada-U.S. irritant just as Trudeau begins an intense month of international summitry, during which he’ll repeatedly rub elbows with U.S. President Barack Obama.

Keystone, which Prime Minister Stephen Harper once called a “no-brainer” despite Obama’s misgivings, had become an awkward reminder of diverging Canada-U.S. directions on climate policy.

TransCanada’s postponement bid may provide an honourable out for both governments, said David McLaughlin, the former head of the National Round Table on the Environment and the Economy and a one-time chief of staff to prime minister Brian Mulroney.

It might even win TransCanada some brownie points with the new government.

“A decision deferred that doesn’t require saying no to a friend and ally is probably a better outcome for the current (U.S.) administration,” said McLaughlin.

“It means Trudeau, in his first meeting with President Obama, doesn’t have to be queried on whether or not he lobbied on Keystone. It removes an irritant. They can focus on the things they want to and not clean up Mr. Harper’s leftovers.”

McLaughlin argues Trudeau’s strong majority government with seats spread across the country, combined with Rachel Notley’s NDP government in Alberta, presents an opportunity to forge a strong climate policy consensus and get a new pipeline to tidewater approved.

New pipeline capacity, oil sands expansion and climate degradation are inextricably linked for the environmental movement and McLaughlin argues Trudeau will never be able to untangle them.

“What he can do, though, is satisfy a broader swath of Canadians that he’s taking climate change seriously,” he said.

“Get a good, effective climate policy in place and use that to promote market access,” said McLaughlin, who couldn’t resist noting that’s exactly what the round table on the environment proposed before the Harper Conservatives killed it off in 2012.

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