Quebec premier sees little economic value for province in Energy East

CALGARY — Quebec's premier raised doubts Tuesday that the proposed Energy East pipeline will bring much of an economic boost to his province.

In an interview with The Associated Press in New York, Philippe Couillard said he doesn't see much benefit if Quebec is just a "transit place" as oilsands crude makes its way to the East Coast.

TransCanada Corp.'s (TSX:TRP) proposed $12-billion pipeline would traverse 4,600 kilometres between Alberta and New Brunswick.

Energy East would make use of an existing natural gas pipeline for roughly two thirds of the way, with new pipe being built through Quebec and New Brunswick. It would ship up to 1.1 million barrels of crude a day.

TransCanada initially planned on building two marine export terminals so that landlocked oilsands crude can be shipped to lucrative new markets like Europe and India — one in Cacouna, Que., and the other in Saint John, N.B.

However, TransCanada said in April it would be scrapping the Cacouna terminal because of concerns over beluga whale habitat. As a result, the startup date has been pushed back by about two years from its original 2018 target.

TransCanada is now weighing its options for a different Quebec site, but CEO Russ Girling has said having just the one terminal in Saint John is a possibility as well. It expects to make a decision toward the end of the year.

As the project stands now, TransCanada estimates about $4 billion, or a third of the project's total investment, will be in Quebec, said spokesman Tim Duboyce.

"Even without a marine terminal in Quebec, the project would represent significant economic benefits in Quebec. That includes the fact the province's two oil refineries would be connected to a safe and reliable supply of western crude oil by pipeline which could help replace more than 600,000 barrels that are imported every day from other countries including the U.S., Nigeria and Venezuela," Duboyce said in an email.

"Energy East could deliver much of the oil Quebec's refineries require while increasing our energy self-sufficiency. And, the pipeline comes with the added benefit of being safer and more environmentally respectful than any other means of moving large quantities of oil over long distances, including rail."

Indeed, Couillard told the AP he has concerns about crude-by-rail.

"We've seen unfortunately and tragically in Quebec that rail transport is not necessarily the safest way to go," said Couillard, referring to the runaway oil train that exploded in Lac-Megantic, Que., killing 47 people nearly two years ago.

"I prefer a world without fossil fuel, only electric, you know," he added.

On other issues, the premier criticized Prime Minister Stephen Harper's Conservative government for not being "very proactively engaged in climate change."

Couillard said Canada should be at the forefront of the issue because it is an oil producer, and he said Quebec would have a "very active and visible" role at the Paris global summit in December where a landmark climate agreement is to be adopted.

The federal government has said it takes climate change seriously and it supports efforts to conclude a fair and effective global agreement on the issue.

The premier was in New York seeking investment for a plan to develop the vast northern part of his province.