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After climate crackdown, TransCanada scraps major tar sands pipeline

06 October 2017

Named one of Canada's Top 100 Employers in 2017, Irving Oil operates Canada's largest refinery, in Saint John, New Brunswick, which is located 65 miles north of the United States border and has reached production rates in excess of 320,000 barrels per day.

TransCanada says it will inform the National Energy Board that it will no longer be proceeding with its applications for both pipelines.

Saskatchewan Premier Brad Wall says the reasons for the decision fall at the feet of Prime Minister Justin Trudeau and the federal government.

The $15B project would have carried crude oil from Alberta to refineries in the Maritimes.

In late August, the National Energy Board - an independent regulatory agency that oversees global and inter-provincial oil and gas pipelines - announced it would consider upstream and downstream greenhouse gas emissions in determining whether the Energy East pipeline was in the national interest.

OTTAWA, The Trudeau government called a "business decision" the abandonment of the pipeline project Energy East by Transcanada on Thursday morning.

The pipeline's importance has somewhat diminished for TransCanada since the United States this year approved Keystone XL pipeline, which would run from Alberta to US refineries, but supporters said they were "extremely disappointed" by the decision. Many environmental groups opposed the pipeline as well. In a statement, the company said the decision would result in roughly $1 billion in losses and cited "changed circumstances" as its rationale.

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On the other side of the pipeline debate, a statement from Greenpeace celebrated: "An incredible victory for all the people, environmentalists, municipalities, landowners, unions, First Nations, and everyone who opposed this project". The province's environmental regulation agency quickly suspended hearings into the project, which were meant to conduct an environmental assessment of the risks and benefits and produce a report to Quebec's environment minister.

TransCanada said it will record a non-cash charge of about $1 billion in its fourth-quarter financial results, reflecting the reduced carrying value of the projects. Companies are not eager to invest in expensive tar sands projects unless the price of oil comes back up.

"We still do not have a regulatory process that gives clear certainty to companies..."

Montreal Mayor Denis Coderre said the TransCanada announcement was "a attractive victory" against a "botched" pipeline project.

He did say, though, that the country needs to better understand why the pipeline was cancelled.

Since Keystone XL was proposed, oil prices have plummeted. Kinder Morgan's TransMountain pipeline has come under fire for inadequately consulting with indigenous communities along the route, and it had a "very bad" environmental review, Scott said. Look at the number of transnational oil companies exiting the oil sands, selling their assets due to the high costs of extraction and production: StatOil, Conoco-Phillips, Royal Dutch Shell.

After climate crackdown, TransCanada scraps major tar sands pipeline