Facing tougher regulations, TransCanada scraps $12 billion oil pipeline

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Alberta Premier Rachel Notley says TransCanada's decision to pull the plug on the Energy East pipeline is "unfortunate".

"I could be at the grocery store, I could be at the coffee shop, and people would constantly stop or say to me "protect our drinking water".

Last month the company revealed that it was suspending efforts to get regulatory approval.

The demise of the pipeline comes less than a year after the Canadian government rejected another export pipeline, Enbridge Inc's Northern Gateway, and is a further setback for Canada's oil industry which is already hurting from low global crude prices.

TransCanada submitted an application for its Energy East project three years ago, proposing the construction of a new 930-mile segment and converting 1,800 miles of gas line for oil service.

"This is evidence of how a lack of clarity and an unclear decision-making process regarding pipeline projects in Canada are challenging the energy sector's ability to be competitive in the world market", the organization said in a release.

"TransCanada was forced to make the difficult decision to abandon its project, following years of hard work and millions of dollars in investment", the Canadian Energy Pipeline Association, an industry group, said in a statement to Bloomberg.

He added that TransCanada will also withdraw from a Quebec environmental review.

Canada's National Energy Board (NEB) granted TransCanada a 30-day suspension on September 8, after the company said it needed to review the impact of new assessment criteria that would consider the C$15.7 billion ($12.58 billion) project's indirect greenhouse gas contributions. "While this is not the result we hoped for, we will continue to drive our business forward to ensure a positive and prosperous future for our region, our communities and our company".

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The 4,500km Energy East pipeline, which would have carried 1.1 million barrels of oil per day, faced stiff opposition from environmental groups and several municipalities in Quebec concerned about possible spills affecting groundwaters and rivers along its path.

"We understand that this was ultimately a business decision by TransCanada based on current economic and political realities", reads the statement.

Heurtel asked TransCanada Pipelines to supply a report on the environmental impact of Energy East in Quebec.

The premiers of Alberta and New Brunswick say they're disappointed by TransCanada's cancellation of the Energy East pipeline, which would have connected their two provinces.

Environment Minister David Heurtel said TransCanada didn't have much choice but to scrap the project, saying he believes the company realized numerous elements weren't in place successful conclusion of the project.

Greenpeace and other environmental groups also claimed a victory for those who believed there was "no social value in the project" in a world fighting climate change.

June 16, 2016: The National Energy Board says it has officially started the clock on its review of Energy East.

With this cancellation, there remains one more tar sands pipeline that has been proposed in Canada, taking oil to the West Coast.

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