TransCanada Corp. is facing mounting challenges to its $12-billion Energy East project in Quebec as growing concerns over its impact on beluga whales in the St. Lawrence threaten to derail its proposed export terminal there.
The Calgary-based pipeline company said Monday that it is suspending operations at the Cacouna, Que., site while it assesses a scientific report that recommends the belugas be declared an endangered species with full protection of its habitat. TransCanada has touted the proposed export terminal in its effort to persuade Quebeckers that the benefits of Energy East outweigh the risks. The terminal would be key for shippers trying to reach nearby international markets, the company has said.
The grim report on the state of the marine population will surely heighten opposition to the project as the municipality promises to hold a referendum on it and the provincial government pursues its own environmental assessment.
"We are standing down on any further work at Cacouna, in order to analyze the [endangered species] recommendation, assess any impacts from Energy East, and review all viable options as we look ahead," the company said in a statement.
It also cancelled a public information night in the town that was planned for Thursday.
Energy East would carry 1.1-million barrels a day of Western oil to eastern refineries and export terminals. TransCanada proposed the convert capacity on its west-to-east gas pipeline to carry oil to near the Ontario-Quebec border, then build a new line to Saint John, N.B. It is the latest in a roster of pipeline projects that have drawn the condemnation of environmentalists and opposition of local governments, as the Alberta industry and government – backed by Ottawa – desperately look to access new markets for growing oil sands production.
The proposed St. Lawrence River port is being designed to handle up to 175 super tankers a year, with a maximum carrying capacity of 1-million barrels per vessel. That is equivalent to 480,000 barrels a day on average over the course of a year. Analysts expect the oil exports from Quebec to reach refineries on the U.S. East Coast and Gulf Coast, though the range would be limited because the port would not be able to handle the largest ocean-going supertankers, as the facility at Saint John would.
The timing of the endangered species recommendations comes at an awkward moment for Alberta Premier Jim Prentice, who is scheduled to meet Tuesday with his Quebec counterpart, Philippe Coulliard, in Quebec City and then Ontario's Kathleen Wynne on Wednesday.
Mr. Coulliard's government came under pressure earlier this fall when a court ordered TransCanada to stop site preparation work at Cacouna and slammed the province for failing to do a proper environmental assessment. A number of polls have suggested the project has little support among Quebeckers.
Mr. Prentice – a former federal environment minister – said he was aware that the beluga could be moved from the "threatened" to the "endangered" category.
"I am not aware of the specifics of the Cacouna site and the impact in terms of beluga whales, but I know it has been a material consideration and obviously the shifting of the species to the endangered list is of material consideration," he told reporters during a visit to Vancouver.
"I think any of these projects, this one included, need to be subject to a rigorous environmental assessment and the purpose of a rigorous environmental assessment is to deal with exactly these kinds of issues."
With an "endangered" designation, the federal government is expected to set aside critical habitats for protection of the species, including a plan to allow its population to recover. A spokeswoman for Fisheries Minister Gail Shea said that work is under way.
"It is important to note that it is already illegal to kill, capture, harass or harm the beluga whales and to destroy its habitat" under a federal recovery strategy, Sophie Doucet said in an e-mail. A critical habitat order will give the federal government the ability to impose fines and prosecute offenders, she added.
But one scientist who studies the marine mammals said Ottawa has failed to follow its own laws because it was supposed to establish a critical habitat order more than two years ago.
"This uplifting of the status of the beluga will put more pressure on the federal government," Robert Michaud, a biologist with the non-profit Group for Research and Education on Marine Mammals, said in an interview."It would obviously be much more difficult for TransCanada to go ahead, or for the federal government to allow it to go ahead, if the habitat is designated."
With files from Ian Bailey in Vancouver