Mackenzie pipeline decision coming soon

The Mackenzie Valley natural gas pipeline faces a key decision this week as the National Energy Board is expected to say whether it approves the proposed project.

The board, which regulates parts of Canada's energy sector, is expected to release its decision sometime this week on whether the $16.2-billion pipeline being proposed in the Northwest Territories would be in the interests of all Canadians.

If approved, the 1,200-kilometre pipeline could transport natural gas from the Beaufort Sea, through the Mackenzie River Valley south to a hub in northwestern Alberta, where it would connect with existing networks.

The gas would come from three "anchor fields" located near the Beaufort Sea in the Mackenzie Delta.

Calgary-based Imperial Oil is the lead company in the consortium that is spearheading the pipeline. The consortium also includes ExxonMobil Corp., ConocoPhillips, Royal Dutch Shell PLC and the Aboriginal Pipeline Group.

"Certainly we'll be looking for a favourable decision on the pipeline," said Fred Carmichael of the Aboriginal Pipeline Group, which represents three N.W.T. aboriginal groups that have negotiated a one-third stake in the pipeline.

"Hopefully it will be favourable so we can keep moving forward on the project."

While the idea of building a gas pipeline from the Beaufort Sea to southern Canada has existed since the 1970s, Imperial Oil and its partners began looking at the possibility again in 2000.

The current pipeline proposal has since been winding its way slowly through the regulatory process. From 2004 until 2009, the Joint Review Panel consulted northerners about the environmental and socio-economic impacts of the proposed pipeline.

Emotional debates

The panel conducted public and technical hearings in the N.W.T., often sparking emotional debates between pipeline supporters who believe a pipeline would pump jobs and money into the territory, and critics who worry the project would open vast areas of the territory to environmental damage and social disruption.

The Joint Review Panel approved the project in December 2009, on the condition that its 176 recommendations are implemented by the pipeline proponents, the federal and territorial governments.

The panel's report was forwarded to the National Energy Board, which held its own round of hearings earlier this year. The board's decision will be subject to final approvalby the federal cabinet.

Calgary-based energy analyst Doug Matthews said he expects the NEB to approve the project. Matthews said what he really wants to know is how much time the board will give the companies to decide whether they actually want to build the pipeline.

The consortium currently has until 2013 to make that decision, but Imperial Oil has told the NEBit wants more time as it waits for markets to improve.

Imperial Oil spokesman Pius Rolheiser said the company also wants to secure a financial commitmentfrom the federal government.

"Certainly should we receive approval with acceptable conditions, it would be a significant, positive, critical step in the journey," Rolheiser said.

"But this is a journey of many steps and we're not there yet."