TransCanada Corporation (NYSE:TRP) said on Friday it's delaying construction on its proposed Energy East Pipeline over environmental concerns about the project to bring western Canadian crude oil to eastern refineries.
TransCanada, which is also trying to build the controversial Keystone XL pipeline, said it will not file an application for the smaller-scale Energy East project with the Canadian National Energy Board until next year because more environmental work still needs to be down.
"There is still work we have to do out in the field and environmental work that we still have to undertake," Steve Pohlod , TransCanada’s vice-president, said.
The $12 billion Energy East Pipeline project will generate an estimated $35 billion in gross domestic product for Canada and $10 billion in government tax revenues, according to a study released by the Canadian-based energy giant in September.
The study estimated that the project will create 10,000 full-time direct jobs during the six-year development and construction of the project and 1,000 direct full-time jobs during 40 years of the pipeline’s operation.
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This comes at a time when the Canadian company is seeking approval from the U.S. to start construction of the Keystone XL pipeline that will bring crude oil from Alberta to refineries in the U.S. Gulf Coast.
Many refineries in the U.S. Midwest and Canada are at capacity, and oil producers are looking toward Eastern refineries, as well as access to export terminals, and TransCanada's Energy East Pipeline is seen as one of the ways to help move the crude.
“I am very pleased with today’s announcement that Energy East is moving forward,” Alberta Premier Alison Redford said in August. “My government made a commitment to the project as part of our efforts to build new markets and get a fairer price for the oil resources Albertans own. This is truly a nation-building project that will diversify our economy and create new jobs here in Alberta and across the country.”
In July more than 100 people gathered in the Ottawa Public Library to discuss the proposed TransCanada plan, which entails converting a 55-year-old natural gas pipeline, according to ottawacitizen.com. TransCanada is one of the biggest energy development companies in North America. The Ottawa protesters said they lacked confidence in the safety of transporting oil, especially in light of the recent train derailment in Quebec, where an oil tanker exploded, killing more than 50 people.