Souris-Moose Mountain MP Robert Kitchen's false analysis of the Energy East Pipeline project cannot go unchallenged.
Undoubtedly, as a Conservative MP, Mr. Kitchen would want to find some way to blame the current federal government for the decision taken by TransCanada to drop its application to build this pipeline.
But the federal government's regulatory system, which was set to review the Energy East proposal, was the same system that recently reviewed and approved two other big western projects – Kinder Morgan's Trans Mountain line from Edmonton to Burnaby, B.C., and Enbridge Pipeline's Line 3 from Alberta to Minnesota.
These two major pipelines to move western resources into export markets represent $11.6 billion in private sector investment and some 22,000 jobs. They're rolling ahead.
Significantly, all the major contracts to supply the necessary pipe have gone to Evraz Steel in Regina.
So the federal government's policy and process with respect to energy have produced big positive results, which the previous Conservative government failed to deliver over 10 years in office.
A detailed independent analysis by the C.D. Howe Institute and commentaries by journalists like The National Post's Terence Corcoran – both from a right-of-centre perspective – have confirmed that hard business reasons drove TransCanada's decision to drop Energy East:
This same company is heavily involved in the huge Keystone XL pipeline project across the United States, which was not in the offing when Energy East was conceived several years ago. But it is now, presenting a major energy transportation alternative, for the same company.
Energy East was in part a conversion project, shifting a gas line into an oil line. When it started, gas markets were in a slump, while oil was riding high. Now the positions have largely reversed. Continuing gas shipments look more promising.
When Energy East began, the world oil price was some $90 per barrel. Mostly recently, it's been barely half that, and the economics of the project have changed dramatically because of private market forces.
