Groups weigh in on Mackenzie Gas Project deadline extension

If Imperial Oil wants another seven years to decide whether to build the Mackenzie Gas Project, then the company should be forced in the near-term to build a liquefied natural gas plant to create a made-in-the-North supply of energy for the N.W.T.'s Beaufort Delta region and parts of Nunavut.

That's the standout comment received by the National Energy Board after a (now-expired) three-month period during which the board sought public feedback on whether to grant Imperial Oil and its partners an extension to the "sunset clause" of their certificate to develop the Mackenzie Valley pipeline.

If the board doesn't grant the extension, the long-delayed pipeline could face another lengthy environmental assessment, deterring Imperial Oil from moving forward with the $16.2-billion pipeline.

Russ Duncan, co-founder of Calgary-based airborne survey company Sky Hunter Corporation, says an extension from the board should produce immediate benefits for the North.

His suggested condition? "The project develop a portion of the gas reserves onshore and gather them to a common point as planned. At this point, the project or others could construct a LNG plant to provide the energy requirements of the area."

Duncan says LNG could be exported by water to western parts of Nunavut, such as Cambridge Bay, in addition to supplying communities in the N.W.T.'s Beaufort Delta region.

Calls for public hearing

"Sure, why not?" says Doug Matthews, a consultant and the former director of the N.W.T. government's oil and gas division.

"But the cost of developing a field, liquefying the gas and trucking to Inuvik, divided by the market size, would be a problem."

Groups like Ecology North and Alternatives North say the requested seven-year extension shouldn't be granted at all.

"The operating context has changed dramatically internationally, in Canada and here in the Northwest Territories," wrote Ben McDonald of Alternatives North.

"Nationally the perspective of the new federal government towards climate change and energy policy is quite different from the one under which the [pipeline]was reviewed. Around the world, energy prices and technologies have changed dramatically, and the seriousness of the significant negative impacts of climate change and its consequences are broadly acknowledged.

"If this much change has happened since the [pipeline]review was concluded, how much might conditions be different seven years from now?"

Not granting the extension would also give other companies a crack at being producers on the Mackenzie line, added McDonald.

Support from indigenous groups

The Inuvialuit Regional Corporation, the Gwich'in Tribal Council, the Tulita District Land Corporation and the Fort Simpson Chamber of Commerce all wrote letters in support of the extension.

Imperial Oil has until March 8 to provide a written a response to the comments.

It's unclear when the board will rule on whether to grant the extension. If it grants the extension, Alternatives North wants a public hearing in Yellowknife to consider the implications of the extension.