The recent shakeup at the National Energy Board’s panel examining TransCanada’s (TRP.TO) proposed Energy East pipeline may have doomed the project, according to a new report from Scotiabank.
All three panelists reviewing the Energy East project recused themselves from the process on Friday. The move comes amid complaints that two of the panelists met privately with former Quebec Premier Jean Charest – who was a paid TransCanada consultant at the time – to discuss the oil pipeline in 2015.
The NEB has also limited the duties of its chairman and vice-chair: they will not be involved in choosing the new panel to resume the Energy East pipeline hearings at a later date.
“A further delay highlights to us once again the many political and regulatory challenges facing TransCanada's Energy East project,” Scotiabank analyst Robert Hope wrote in a report to clients on Monday. “We place a 25 per cent probability that the pipeline proceeds and it is not included in our estimates or valuation.”
The Energy East project is highly unpopular in Quebec and the Federal Liberal Party is unlikely to risk the political backlash of approving the project, according to Hope. He believes Kinder Morgan’s (KMI.N) proposed Trans Mountain pipeline expansion or expansions of Enbridge’s (ENB.TO)Mainline system have a better chance of getting the green light.