Ontario and Quebec’s pipeline demands ‘very reasonable,’ N.B. Premier says

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TransCanada Corp.'s Energy East oil pipeline is shaping up to be a key issue in climate change discussions between Canada's premiers, as Ontario and Quebec seek to make its effect on global warming a major element in its approval.

And some of the project's proponents are willing to consider added measures to fight climate change in order to win Central Canada's support for the $12-billion project.

The premiers, who gather early next year in Prince Edward Island, have pledged to hammer out a Canadian energy strategy before next summer. That plan is expected to contain measures for cutting greenhouse gas emissions.

On Monday, Ontario Premier Kathleen Wynne met with her New Brunswick counterpart, Brian Gallant, a pipeline supporter. She made it clear afterward that the pipeline would be part of talks on the energy strategy.

"We look at the discussion of the Energy East pipeline in the context of the Canadian energy strategy," she said following the 40-minute meeting at her Queen's Park office. "We understand that we are connected, that Alberta needs to move its resource and Ontario and Quebec and New Brunswick are part of that endeavour. But there are some principles that we need to adhere to."

Ms. Wynne and Quebec Premier Philippe Couillard last week unveiled a set of seven joint demands for the pipeline, including that its affect on global warming will be taken into account when the provinces decide whether to give the plan their blessing. The National Energy Board will ultimately decide whether Energy East goes ahead, but Ontario and Quebec can intervene at its hearings to try to persuade it to either allow or block the pipeline.

Mr. Gallant, whose province stands to benefit from the crude the line would feed to a refinery in Saint John, struck a conciliatory note. He said he believed Ontario and Quebec's conditions could be met.

"The principles are very fair, they're reasonable, they're also achievable," he said. "We'll certainly, as a province, continuously work to ensure that the whole country sees that we can achieve these principles, we can make sure that we do it in an environmentally sound way."

Over the weekend, Alberta Premier Jim Prentice told the Globe that he, too, is ready to discuss climate change standards as part of talks over the pipeline. He is planning to meet with Ms. Wynne and Mr. Couillard in early December to discuss Energy East.

A TransCanada spokesman said Monday the company had no further comment than what it had said Friday, that it is still studying the conditions laid out by Ontario and Quebec. "We are studying these principles and look forward to working with both governments in the appropriate manner to make the project successful," Tim Duboyce wrote in an email.

The proposed pipeline would stretch 4,600 kilometres from Hardisty, Alta. to Saint John, carrying 1.1 million barrels of crude per day to refineries in Quebec and New Brunswick. It would also connect with export terminals, allowing the oil to be shipped off the continent.

But the massive project is drawing opposition from environmentalists who argue it will accelerate climate change by driving up oil production.

Ms. Wynne and Mr. Couillard have now linked the pipeline with interprovincial talks on global warming mitigation.

Currently, different provinces employ different measures. Quebec runs a cap-and-trade system with California, in which the governments limit the amount of greenhouse gas that can be released into the air. British Columbia imposes a carbon tax on fossil fuels. Alberta, meanwhile, charges oil producers who produce above a certain amount of carbon. Ontario has spent several years vacillating over whether to join Quebec's cap-and-trade system or find some other way to put a price on emissions.

With a report from Shawn McCarthy