Basic economics – not regulation – ended the Energy East pipeline, Globe and Mail ($)

Benjamin Dachis • Published October 5, 2017

Benjamin Dachis is associate director of research at the C.D. Howe Institute.

TransCanada Corp. announced on Thursday that it would not proceed with its Energy East proposal to ship Western Canadian oil to Eastern Canada. Widely thought to have been felled by overzealous regulators, in truth the king of Canadian pipeline projects was dethroned by the simple loss of its business case. Happily for Western Canada, natural gas looks to return to the throne of Canadian energy.

The case for Energy East was weakened by the decline in global oil prices since 2014. Between then and now, the forecast for Western Canadian oil production has fallen precipitously. According to data from the University of Alberta’s Andrew Leach, the Canadian Association of Petroleum Producer’s forecast for production by 2030 is down by more than two million barrels a day. MORE>>


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