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Why the Mackenzie Gas Project Must Go Ahead

After years of delay, distraction and political dithering, a turning point in the exploitation of this resource has probably been reached – and the Mackenzie River valley is poised to become the central right of way for moving the gas to market

July 01, 2006
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Detractors and formidable environmental, cultural and political barriers notwithstanding, the vast pools of natural gas in the Arctic Ocean remain one of the last frontiers of accessible and conventional hydrocarbon development in the world.

At 4,240 kilometres the Mackenzie comes second only to the Mississippi-Missouri for the longest of North America’s river systems. But it’s not only its length that’s enormous. Also enormous are the natural gas resources ready to be tapped at the end of it, the dollars needed for infrastructure to bring the gas out, and the socio-economic stakes that exist for the myriad indigenous peoples across whose land the infrastructure, most likely a pipeline, will run. Even the amount of studies and government filings for the pipeline-based Mackenzie Gas Project (MGP) have been prodigious: regulatory approval documents alone filed in late 2004 weighed in at 8,650 pages.

Indeed, the approval challenges facing the front-runner MGP proposal are formidable: the project will see people, technology and industry slice through the lands of four different aboriginal groups – the Inuvialuit, Gwich’in, Sahtu and Dehcho; involve at least five corporations, including the Aboriginal Pipeline Group (APG), lead proponent and project manager Imperial Oil Resources, along with ConocoPhillips Canada, Shell Canada and ExxonMobil Canada; require the jurisdictional vetting of two Canadian governments – the Government of the Northwest Territories and the Government of Canada; and be intervened by dozens of individuals and at least two key community and industry representatives – the Northern Gas Project Secretariat and the Joint Review Panel for the Mackenzie Gas Project.

Insurmountable? Not according to energy economist Frank Atkins.

“I can’t see why we wouldn’t go ahead with it,” says Atkins, Associate Professor of Economics at the University of Calgary. “I think this is a perfect thing for Canada right now.”

For one thing, says Atkins, northern gas is far more valuable sold to the U.S. than it is as a source of energy self-sufficiency – even after factoring in the voracious appetite for natural gas that mining and in-situ operations in the Athabasca and Peace River oilsands have generated. So, we should export it, argues Atkins, and revisit nuclear power for generating the steam and power needed to extract oilsands bitumen.

“Nuclear got really bad press twenty years ago with Chernobyl and Three Mile Island and that silly movie China Syndrome,” he says. “I think that – and everybody says this – Mr. Klein just rejects it because it’s not Alberta. The nuclear technology would come from Ontario, so I don’t see any problem with it but, granted, this is maybe something down the road.”

For its part, the views of the minority federal government are also clear.

“It’s important to recognize this is one of the largest and most important infrastructure projects in Canada,” says Jim Prentice, Minister of Indian Affairs and Northern Development. “It will have enormous economic and social benefits for people right across Canada. The pipeline is to be a basin-opening project and that’s part of its fundamental importance to the North; it’s not just the gas from the delta that we’re speaking of here, it essentially opens up an infrastructure spine that proceeds up the entire Mackenzie Valley corridor, which is extremely important in the context of declining production in the western Canadian sedimentary basin.”

Overall, Prentice’s remarks echo the extent to which the rhetoric around Canada’s energy future has recently ratcheted up a notch. Comments made by Prime Minister Harper to members of the Canada-U.K. Chamber of Commerce in July about Canada being an “energy superpower” reflect similar language already well in circulation.

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