TransCanada Corp. has hit a snag in its $11-billion Energy East pipeline project after the Quebec Superior Court issued an injunction halting the company's exploratory drilling at a planned export terminal at the mouth of the St. Lawrence River.
The Calgary-based pipeline company is set to file for a permit from the National Energy Board for the 4,600-kilometre Energy East pipeline, which would carry 1.1 million barrels a day of western crude to eastern refineries and export terminals. But it needs approval from the Quebec regulator for its planned export facility at Cacouna, one of two terminals it plans to construct, including a larger one in Saint John.
The injunction was sought by several Quebec-based environmental groups that argued the provincial ministry that granted TransCanada a drilling permit had failed to properly consider the impact of endangered belugas that calve in the area around Cacouna. The groups said Tuesday that they would seek a permanent injunction.
The injunction stands until Oct. 15, seen as the end of the critical calving period for the belugas. It is not clear what will happen after Oct. 15, but TransCanada had a work plan it wanted to complete before the ice forms on the river.
In issuing the injunction, Justice Claudine Roy slammed both the Quebec government and TransCanada for rushing the work without taking proper precautions to protect the belugas. In a statement, TransCanada said it followed all proper procedures in obtaining its permit, and is now considering how to proceed in light of the injunction.
Western Canadian producers are increasingly worried about opposition to new pipelines that would bring them greater access to new markets on the U.S. Gulf Coast, in the Asian market, and in the Atlantic basin. TransCanada's proposed Keystone XL project through the U.S. has long been stalled, while there is staunch political opposition in British Columbia to proposals to build or expand oil sands pipelines to the West Coast.
With Energy East, TransCanada intends to convert an underused natural gas pipeline to carry crude to the Ontario-Quebec border, and then build a new line through Quebec and New Brunswick. That project has been seen as less contentious politically, although the company still has to demonstrate to residents and politicians along the route that the risks are modest and manageable.
Parti Québécois critics say the company should not be allowed to do any work on the project until it has been fully reviewed by the Bureau d'audiences publiques sur l'environnement, the province's regulatory agency.