CALGARY – The Mackenzie Gas Project has been approved by federal regulators, marking a new chapter in a 30-year pursuit of Arctic natural gas riches by southern producers and a territorial government seeking economic independence.
“We looked at how the project would contribute to sustainability in the way it would affect the people, the land where they live, and the economy, now and in the future," the panel said in its lenghty decision, which also included 264 conditions that must be met by the developers.
"We recognize that the Mackenzie Gas Project would have much larger and more far-reaching effects than previous developments in the North. “
Supporters of the $16.2-billion pipeline proposal, the largest capital project to be undertaken in Canada, greeted the National Energy Board’s decision Thursday with unabashed enthusiasm.
“This is a great day, not just for the North, but for Canada as a whole,” said Bob Reid, president of the Aboriginal Pipeline Group. “It’s been a very lengthy regulatory process, but that’s all behind us now.”
Christmas has come early for the territory, added Bob McLeod, NWT minister of industry.
“This is an important milestone for a project which could provide significant economic and environmental benefits for the Northwest Territories and Canada,” Mcleod said.
The pipeline and development of three major “anchor” fields will bring jobs and hope to the Northwest Territories, much needed infrastructure and spinoff jobs in construction, hospitality and service across Canada.
The APG holds a 30 per cent stake in the pipeline, which is lead by Imperial Oil, ConocoPhillips, ExxonMobil Corp. and Royal Dutch Shell PLC.
However, approval by the federal energy regulator does not spell sanction by proponents of the $16.2-billion project. The consortium of stakeholders, led by Imperial, continue to seek support from Ottawa to proceed with the pipeline.
“We would need to have sufficient confidence in a fiscal framework agreement with the federal government to allow us to make the decision to restaff the project, to resume engineering work, field work, permitting.” said Imperial spokesman Pius Rolheiser.
The earliest Imperial Oil will issue an investment decision on the line will be 2013, Rolheiser said.
Oil and gas producers have been chasing northern resources since the 1970s, reviving the pipeline project in 2000 when natural prices started climbing again and the outlook was for even higher returns.
The Mackenzie project will bring Arctic natural gas down to southern markets via the development of three major natural gas fields and a 1,200-kilometre pipeline.
Millions of dollars already have been spent on the ambitious project that will/would tap into approximately six trillion cubic feet of recoverable natural gas reserves lodged beneath the Arctic tundra.
But the forces that propelled oil and gas producers in 2000 to revive a project first aired in the 1970s have changed dramatically.
The promise of high natural gas prices on short supply that lured producers to the harsh NWT landscapes has been engulfed by cheap, abundant and easily accessible shale gas.
“Why would anyone be excited about bringing on gas from remote locations in the Mackenzie Delta,” questioned Steve Paget, analyst with FirstEnergy Capital Corp.
domeara@calgaryherald.com
stice Thomas Berger also calling for conservations areas and land use plans to be completed prior to building a pipeline. Soft gas prices kept the project off-line until surging demand sparked new interest in natural gas in the late 1990s.
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