Eastern Ontario residents who use natural gas would likely see their wintertime bills jump by an average of nearly 12 per cent if the planned Energy East pipeline proceeds, says a report released Thursday by the Ontario Energy Board.
The report also raises concerns about the potential impact of the pipeline, which will pass through rural areas in Ottawa’s south end, on sensitive waterways, singling out the Ottawa River, Rideau River and the Nepean and Oxford-Marsh aquifers for special mention.
The $2.4-million OEB report, commissioned by the Ontario government, concludes there’s an imbalance between the economic and environmental risks of TransCanada’s proposed $12-billion pipeline and the “modest” economic benefits it would produce for Ontarians.
The project involves converting 3,000 kilometres of existing natural gas pipeline to carry 1.1 million barrels per day of crude oil from Alberta and constructing a new 1,600-kilometre pipeline from Iroquois, Ont. to Saint John, N.B.
In Ontario, about 1,900 kilometres of existing 42-inch natural gas pipeline in northern and eastern Ontario would be converted and an additional 100 kilometres of new pipeline built from Iroquois to the Quebec border.
A technical study done for the OEB found the conversion would create insufficient capacity along a section of the pipeline running from North Bay to Iroquois.
“This will reduce the supply of natural gas and is expected to lead to price increases in Eastern Ontario,” the OEB report says.
During the winter months, when demand is highest, Energy East would likely increase the price of gas by an average of 11.9 per cent between 2016 and 2035, the OEB says. Because there would no impact in summer, the average price increase would be 3.5 per cent over a full year.
To deal with the anticipated shortfall in pipeline capacity needed to meet forecast demand in Eastern Ontario, TransCanada is proposing to build a new natural gas pipeline from Maple, Ont. to Cornwall.
But even with that new pipeline, the OEB says it is concerned that Energy East “will reduce the supply and increase the price of natural gas” for consumers in Eastern Ontario.
The OEB finding vindicates a 2013 warning by Enbridge Gas Distribution, which said Energy East would leave it as much as 25 per cent short of the capacity needed to serve the Ottawa area on the coldest winter days.
In a statement responding to the OEB report, TransCanada was silent about Energy East’s potential impact on natural gas prices in Eastern Ontario.
The company said the project is still in the early stages of the design and regulatory process overseen by the National Energy Board, which is expected to hold a public hearing in 2016.
“As such, certain aspects of the project will continue to be refined based on technical studies planned or underway, as well as the results of extensive ongoing public consultations,” it said.
The OEB report followed public consultations in January 2014 and January 2015, described by the board as the most comprehensive it has ever undertaken.
Adam Scott, a spokesman for Environmental Defence, said the public input the OEB received “made it clear that the risky project does not have the support of communities along the pipeline route in Ontario — especially in the Ottawa area.”
The public’s biggest concern was the safety of the proposed pipeline and its potential impact on the province’s lakes, rivers and drinking water in the event of a spill, the OEB said.
The Energy East pipeline would cross or run parallel to many Ontario waterways, including the Ottawa, Mattawa, Madawaska, Rideau and St. Lawrence rivers, the board report notes.
It says TransCanada “needs to assess whether it is appropriate to take a route originally chosen for a natural gas pipeline and use it for the transportation of crude oil.
“Where the existing pipeline route is too close to environmentally sensitive areas, TransCanada should reroute the pipeline or justify why rerouting is not necessary.”
The report says TransCanada “should pay particular attention” to Nipigon Lake, Trout Lake, the Ottawa River, the Rideau River and the Nepean and Oxford-Marsh aquifers, which supply well water for rural areas of Ottawa and Eastern Ontario.
TransCanada should be using the latest leak detection systems for Energy East and should demonstrate that, in the event of a spill, as little crude oil as reasonably practicable would be released, the report says.
The report cited three studies done of Energy East’s estimated economic impact in Ontario. They show that, directly and indirectly, the project will create between 92,668 and 114,000 full-time equivalent jobs and add between $12 billion and $19 billion to the province’s GDP.
The report characterized those benefits as modest, though it acknowledged that the pipeline’s long-term economic impacts “cannot be quantified with any certainty.
“Regardless, we believe there is an imbalance between the risk of the project and the expected benefits for Ontarians,” the OBE says.
“While there may be economic benefits, Energy East has costs and risks that Ontarians, and the province’s natural gas consumers, do not currently have to bear.”
The Ontario government, which has no regulatory authority over the pipeline project, will use the OEB study’s findings to inform its arguments when it intervenes at the National Energy Board’s hearing into Energy East.