Ole Hendrickson
Tar sands pipeline politics -- now it's Energy East

| November 25, 2014
Image: Environmental Defence Canada/flickr

In a recent CBC radio interview on the politics show The House, Gary Doer, Canada's ambassador to the United States, discussed Republican gains in the recent U.S. mid-term election. He predicted that a Republican-controlled U.S. Senate will likely vote to endorse the Keystone XL pipeline by amending an energy efficiency bill. Keystone XL, if then also approved by U.S. President Barack Obama, would transport diluted bitumen from the Alberta tar sands south through the U.S. to Gulf Coast refineries and ports.

Both houses of the U.S. Congress did indeed vote on Keystone XL in the past weeks. The motion to endorse got a clear majority in the House of Representatives, but failed by one vote in the Senate (which will not pass into Republican control until the start of the new year). Meanwhile, Canada's taxpayer-funded lobbyists in Washington (Ambassador Doer and his staff at the embassy) are continuing their efforts to arm-twist U.S. legislators.

In his interview, Mr. Doer claimed that Keystone is "more energy efficient," and that President Obama's own scientists in the U.S. State Department have said that "failure to do it means that higher greenhouse gases are created."

Well, hold on now. The State Department initially concluded that despite risk of spills, a Keystone XL pipeline would be preferable, environmentally speaking, to rail cars for transporting tar sands crude. But a Scientific American article ("Keystone Pipeline Will Impact Climate Change, State Department Reports") says that the State Department subsequently examined greenhouse gas (GHG) implications in detail in a January 2014 Final Supplemental Environmental Impact Statement. The State Department now says that increased GHG emissions from Keystone XL would be "equivalent to annual GHG emissions from combusting fuels in approximately 270,833 to 5,708,333 passenger vehicles."

Asked about Keystone XL after the mid-term election, President Obama said, "I'm just going to gather up the facts." One hopes he does not get them from Ambassador Doer.

What about pipelines in Canada? Despite Harper government approval of Enbridge's Northern Gateway proposal, First Nations court challenges and resistance from citizens' groups make it unlikely that tar sands crude will proceed along the proposed route through British Columbia to Kitimat on the Pacific coast.

A pipeline running east

If not south, not west -- what about east? TransCanada's ads for "Energy East" are all over the Internet: "A project to bring Western Canadian oil to Eastern Canada," "Canada is stronger with the Energy East pipeline," etc.

It sounds as if a pipeline already exists -- which in fact it does. TransCanada wants to stop the flow of natural gas through its Canadian Mainline pipeline and convert it to carry diluted tar sands bitumen to ports in Quebec City and Saint John, New Brunswick. Most of this tar sands-derived crude, known as "Western Canadian Select" (WCS), would be exported around the world. This would lower the price differential between WCS and other types of crude oil, and increase profits for oil and pipeline companies.

In other words, TransCanada and its oil industry partners would increase their profits by rebranding the Canadian Mainline pipeline as Energy East and converting it for export of tar sands bitumen, while choking off natural gas supply to Eastern Canada.

In a Globe and Mail article, "If Alberta oil heads east, benefits for Ontario are hard to see," Jeff Rubin says that "Ontario's supply of natural gas would be cut by roughly 25 per cent, leaving some regions with few obvious alternatives to substitute for the loss." Rubin adds, "If Alberta can be considered the culprit behind Canada's sad track record on carbon emissions, then Ontario's acquiescence to the Energy East pipeline would make it a willing accomplice."

The provinces weigh in

The National Energy Board has created an extremely cumbersome comment process for Energy East that excludes consideration of carbon emissions -- and essentially excludes the public at large. However, Ontario energy minister Bob Chiarelli has asked the Ontario Energy Board (OEB) to comment and report on matters such as impacts on natural gas consumers "in terms of prices, reliability and access to supply" and impacts on "pipeline safety and the natural environment." The OEB is now inviting public comments on all aspects of Energy East -- including carbon emissions.

When New Brunswick Premier Brian Gallant met with Alberta Premier Jim Prentice last month, Gallant pledged his support for the Energy East pipeline project. New Brunswick residents would face risks of spills, but not of reduced natural gas supply, as a new pipeline segment would need to be built to reach Saint John. Yet opposition to Energy East is growing: attendees at an October 29 public forum in Saint John expressed concern about threats to the fishing industry, and Edmundston Mayor Cyrille Simard has been blogging about threats to that city's water supply.

More recently, Quebec energy minister Pierre Arcand listed seven conditions that TransCanada must fulfill before that province decides whether or not to support the pipeline project. These include an environmental assessment of the project's impact on carbon emissions, a requirement to consult with local communities and Aboriginal peoples, and an outline of its economic benefits for the province.

And on Friday November 21, after a joint meeting of their cabinets, the premiers of Ontario and Quebec agreed on joint principles and collaborative work to guide their respective decisions on Energy East and other pipeline projects.

Limiting the natural gas supply

A study done by Deloitte for the oil industry -- Energy East: The economic benefits of TransCanada's Canadian Mainline conversion project -- claims that the Canadian Mainline pipeline is underutilized because natural gas supply from eastern North America is growing (owing to fracking): "Rapid growth of natural gas shale production from the Marcellus deposit in the northeast U.S. has made it the most productive natural gas field in the region… the Marcellus deposit has the potential to provide high production rates into the distant future."

But what is the "distant future"? An article cited by Deloitte, "U.S. Cuts Estimate for Marcellus Shale Gas Reserves by 66%," says that in 2011 the U.S. Geological Survey reduced its estimate of undiscovered Marcellus Shale natural gas "by as much as 80 percent after an updated assessment by government geologists… estimated Marcellus reserves would meet U.S. gas demand for about six years… down from 17 years in the previous outlook." The article adds, "About 141 trillion cubic feet of gas can be recovered from the Marcellus shale using current technology, down from the previous estimate of 410 trillion."

How does this compare to natural gas reserves in western Canada? A Canadian Press article, "Alberta's Shale Oil and Natural Gas Reserves Huge," cites a report by the Energy Resources Conservation Board and Alberta Geological Survey estimating that "tough-to-access areas" in that province contain 3,424 trillion cubic feet of natural gas: Alberta's natural gas reserves are 24 times greater than those in the Marcellus shale.

If Eastern Canada becomes dependent on imported natural gas from fracking, consumers can anticipate increased natural gas prices. Natural gas shortages at the end of the unusually cold winter of 2013-2014 prompted the Ontario Energy Board to give Enbridge a temporary increase of nearly 40 per cent in natural gas charges in March 2014. Without supplies through the Canadian Mainline pipeline, this shortage, and the resultant short-term price shock, could have been much more serious.

Increased environmental risks

Conversion of the Canadian Mainline pipeline from natural gas to diluted bitumen would also increase the probability of pipeline leaks into the environment. While natural gas mostly disperses into the atmosphere if accidentally discharged, diluted bitumen forms a heavy liquid after release. Pipeline leaks would be difficult and costly to clean up, and would be highly likely to occur.

A 2011 U.S. report, Tar sands pipelines safety risks, says that diluted bitumen is "significantly more corrosive to pipeline systems than conventional crude. Bitumen blends are more acidic, thick, and sulfuric than conventional crude oil… Refiners have found tar sands derived crude to contain significantly higher quantities of abrasive quartz sand particles than conventional crude. This combination of chemical corrosion and physical abrasion can dramatically increase the rate of pipeline deterioration."

This report describes experiences with the July 2010 leak of roughly one million gallons of diluted bitumen from an Enbridge pipeline into the Kalamazoo River in Michigan. This was the worst in-shore oil spill in U.S. history. Clean-up costs exceeded $1 billion and were increased by the tendency of diluted bitumen to sink in fresh water, necessitating dredging to clean the river bottom.

Given the oil industry's control of the Harper government, Canada's National Energy Board will likely approve any and all tar sands pipeline proposals. But there is more than one level of government in Canada. The Ontario and Quebec governments deserve thanks for providing the public with an opportunity to comment on the full range of environmental and economic dimensions of Energy East.

Ole Hendrickson is a forest ecologist and current president of the Ottawa River Institute, a non-profit charitable organization based in the Ottawa Valley.

Image: Environmental Defence Canada/flickr


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