The Energy East pipeline will lead to greenhouse gas emission increases equal to adding over seven million cars to Canada’s roads.
Executive Summary of Climate Implications of the Proposed Energy East Pipeline, published February 6, 2014, by the Pembina Institute. The full report can be downloaded here (pdf).
In August 2013, energy infrastructure company TransCanada announced its intention to build a $12 billion pipeline and export terminal project called Energy East. The proposed route would run from Hardisty, Alberta, to the Canaport crude terminal near Saint John, New Brunswick. The pipeline would have the capacity to transport 1.1 million barrels per day of crude oil, including oilsands and conventional crude production.
If it proceeds as proposed, Energy East would be a very significant new piece of oil transportation infrastructure. Indeed, Ontario’s Minister of Energy, Bob Chiarelli, called the proposal “certainly the most significant east-west energy transportation initiative in a generation” and “the largest pipeline project in Canada in over 50 years.”
This report provides an initial assessment of one of the potential environmental consequences of the proposed pipeline: the effect of Energy East on Canada’s greenhouse gas (GHG) emissions. Although pipeline infrastructure, such as pump stations, produces greenhouse gases, the overwhelming majority of the emissions associated with oil pipelines come from the product those pipelines carry. These GHG emissions occur both upstream and downstream of the pipeline itself.
While the precise mix of crude oils that the Energy East pipeline would transport is not yet known, it’s clear that oilsands products would make up a significant part of the pipeline’s contents from the outset.
While conventional oil production in Canada is projected to plateau by 2015 and remain flat to 2030, oilsands producers plan to nearly triple their production between 2012 to 2030. Thus, over time, the share of Energy East’s capacity devoted to shipping oilsands would be likely to increase.
Oilsands production is Canada’s fastest-growing source of the GHG pollution that causes climate change. According to Environment Canada, oilsands GHG emissions are projected to nearly triple between 2005 and 2020, an increase large enough to cancel out all emission reductions that other parts of Canada’s economy are projected to make over the same period.
The Energy East pipeline would represent approximately a one-third increase in the capacity of the pipeline network carrying crude out of western Canada today, thus significantly increasing oilsands producers’ access to markets. Crucially, Energy East would also carry oilsands to tidewater, where it could be exported on ocean-going tankers to wherever it fetches the best price.
By providing predictable access to desirable markets for oilsands products, a large-capacity pipeline like Energy East would make the economics of oilsands production more compelling — and thus help to unlock the GHG emissions that increased production would create.
Our assessment quantifies only the emissions from producing the crude that would fill the pipeline. By not including emissions that occur after the crude leaves the pipeline — those from refining the crude and then burning the finished product — we exclude the vast majority its life cycle emissions impact. However, our decision to focus on upstream emissions means that our analysis concentrates on emissions that take place in Canada.
The same cannot be said of the downstream emissions that would be associated with Energy East. At this point, it is far from clear that the bitumen transported on Energy East would be refined in Canada. Of the three refinery facilities that TransCanada plans to connect to the pipeline, none is currently equipped to refine extra heavy oil.
TransCanada’s current plan would see the Energy East pipeline also transport lighter crudes, and eastern Canadian refineries can process those products. However, the capacity of the Energy East pipeline proposal is greater — by a significant margin — than the current capacity of the three Canadian refineries it would connect to. Thus, in order to produce a conservative assessment focused on the GHG impacts in Canada, we have left refining emissions outside of our analysis.
Similarly, given oilsands companies’ focus on reaching world markets via tidewater, it is likely that a significant fraction of the emissions from burning the crude oil transported on Energy East will occur outside Canada’s borders once the oil is exported.
Because the precise contents of the proposed pipeline are not known, we modelled a range of emissions scenarios. Our assumptions produce a preliminary estimate of the Energy East proposed pipeline’s upstream GHG impact of between 30 and 32 million tonnes of annual emissions.
For an individual piece of infrastructure, this is a very significant impact. It is equivalent to the annual emissions of adding over 7 million cars to Canada’s roads, which is approximately the total number of cars on the road in the province of Ontario. The volume of new oilsands production associated with the Energy East pipeline’s capacity would represent a 34 to 39% increase from current (2012) oilsands production levels.
As a result of these very significant GHG implications, we recommend that any regulatory review of the Energy East proposal should include upstream impacts — the environmental consequences of producing the products that would flow through the pipeline — within its scope. In addition, we recommend that the federal government adopt stringent regulations to reduce oil and gas sector GHG emissions. Such regulations are urgently needed to curb Canada’s fastestgrowing source of GHG emissions and to help get Canada on track for its national 2020 climate target. Stringent emission regulations in the oil and gas sector would also provide the incentive companies need to invest in significant improvements to their emissions performance.