Regulatory red tape helped kill the Energy East Pipeline proposal, says a Red Deer business advocate.
“It’s frustrating because it’s just another example of the heavy regulatory burden — or the over-regulation, I would say — of industry,” said Robin Bobocel, Red Deer and District Chamber of Commerce executive director.
“With the barriers that regulators put in front of industry to get things developed, this is just another casualty of that process,” he said on Thursday.
The current NDP government deserves some of the blame for TransCanada’s decision to cancel plans for the Energy East pipeline and Eastern Mainline projects that were to move Alberta oilsands production to Quebec and New Brunswick, he said.
Alberta’s new carbon tax creates uncertainty in the marketplace, which “was one of the contributing factors to TransCanada’s decision.”
What the carbon tax’s impact would have on costs could not be defined, he said.
“Business does not thrive in uncertainty and that’s the situation the government has created here.”
Garett Cupples, owner of GenTex Oilfield Manufacturing, was shaking his head over the situation.
“I don’t know what to say. It’s pretty depressing,” said Cupples. “It seems to me like we’re going backwards not forwards.”
For an oil and gas industry that is slowly recovering from the downturn decisions like this can have a “psychological effect,” on the sector. Businesses might start shrinking their operations again, he said.
“That could happen.”
Cupples said it does not make sense for those who oppose the pipelines because of environmental concerns, such as Montreal Mayor Denis Coderre, to prefer a situation where oil must be moved by rail cars across thousands of kilometres and rail crossings.
Premier Rachel Notley expressed her disappointment with TransCanada’s decision and said the TransMountain pipeline should be considered a national priority.
Bobocel said the same approach should have been taken with Energy East and Keystone XL, which will transport Alberta oil to distribution hubs in the U.S. President Donald Trump gave the pipeline his stamp of approval but it still needs other state approvals.
How the Energy East decision will affect local companies is difficult to estimate.
“It’s tough to draw a straight line. Red Deer is a service hub to oil and gas so I’m sure there would have been some trickle down (benefits).”