TransCanada has suffered a major setback in its business ventures. In the United States, the Canadian company is known for the Keystone XL pipeline. The company issued a statement yesterday saying that it would discontinue the construction of a pipeline in Canada. The pipeline being referenced was supposed to run to Ontario from Alberta. Before the pipeline reached its destination, it should have passed in the provinces of New Brunswick and Quebec. However, the company refused to offer details as to why it had abandoned the project. Instead, it announced in a short statement that changed circumstances had forced them to abandon the plan. At the moment, the company is headquartered in Calgary, Alberta. While asked to elaborate more, the spokesman for TransCanada Terry Cunha refused to comment. The project that would have swallowed $15.7 Canadian billion must have been opposed by indigenous groups as well as environmental organizations. An environmental group known as 350.0rg through its founder Bill McKibben thanked the indigenous people and Canadians who opposed this project. He further said that climate math is quite simple and TransCanada seems to have caught up with the equation. He said that the company should let the carbon found in tar from Alberta sand stay there.
Other than the opposition, analysts say that there are other factors that may have led to the demise of the project. One reason is the recent reviews that were implemented by the Canadian government. Economists also speculate that low oil prices may have contributed to the collapse of the project. Auspice Capital Advisors in Calgary chief investment officer Tim Pickering says that the regulatory layers on the project put the project off despite making economic sense. The project was referred to as Energy East. For starters, the project had the capability of linking the Alberta oil with the refineries that are found in other parts of Canada such as New Brunswick, Quebec, and Ontario. The bitumen from the refineries would then be put into tankers in Eastern Canada before being moved to the United States. This is just one of the challenges that are facing companies in the oil sands. This would have provided TransCanada with an opportunity to expand its market. Hydraulic fracturing in the US means that most of the oil from the US is exported to the Canadian market. During the lobbying process, TransCanada called the Energy East program a nation-building exercise.