The Ontario Energy Board has voiced its opinion on the $12 billion Energy East oil pipeline project, reflecting the concerns of the communities along the route that the environmental risks are greater than the potential benefits.

The Board expressed an added concern that the project would drive up natural gas prices, as the project entails the conversion of a natural gas pipeline into an oil pipeline and there would be less supply of this resource.

"What we have found is there is an imbalance between the economic and environmental risks of the project and the expected benefits for Ontarians," said OEB vice-president Peter Fraser as he released a report on Energy East. "The top concern expressed," he said, "was the risk of an oil spill as the pipeline runs new or across many waterways. Our advice is that for the existing pipeline, when it is too close to environmentally sensitive areas, it should be rerouted unless it can be justified by TransCanada as necessary."

TransCanada Corp. (TSX:TRP) is planning to build the pipeline to bring Alberta crude to refineries in Quebec and to a refinery and marine terminal in Saint John, N.B. For two-thirds of the way, it plans to convert a natural gas pipeline for oil and then build all new pipe throughout Quebec and New Brunswick.