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Mackenzie Official: Don't Let Alaska Gasline Beat Us to Market

Prospects that an Alaska gas pipeline will move ahead are raising anxiety in the Canadian camp promoting construction of a Mackenzie project first. Bob Reid, Calgary president of Aboriginal Pipeline Group, let the concern show in a blistering statement intended to light a fire under the stalled Canadian regulatory process.

"This is the year gas from the Mackenzie Delta was scheduled to flow when the regulatory applications were filed with the National Energy Board (NEB) in October of 2004," the frustrated 67-year-old Reid said. The career veteran of TransCanada Corp. came out of retirement to run the native coalition that holds a one-third interest in the proposed Mackenzie line.

"Don't hold your breath," Reid said. There are a number of reasons for the delay but "one stands out," and that is the seven-member environmental and socio-economic Joint Review Panel for the project. While the NEB completed its Mackenzie hearings on schedule three years ago, it is still waiting for the review panel report as an essential before the case can proceed into its final argument and decision stages (see NGI, Feb. 23; Dec. 8, 2008).

When about a dozen federal, Northwest Territories and native agencies created the joint panel, the review was projected to take about 10 months, including the writing of its report. "The panel's performance has been dismal and very disappointing to our aboriginal shareholders," Reid said. "They are strangely silent about what is taking them so long," including a refusal to respond to date to December public appeals for quicker work by northern native leaders.

The Mackenzie Gas Project has lost three valuable years, Reid told a Calgary industry conference where the two Alaska gasline project backers -- TransCanada Corp. and Denali -- vowed to proceed as quickly as possible with their rival entries to build the Alaska gas pipeline (see related story).

North American markets will need Alaska and Mackenzie Delta gas supplies combined, but both northern pipelines may not be built if they are approved in the wrong order, Reid warned.

"The Mackenzie project is not in competition with Alaska but must precede it," he said. "It is far cheaper to expand an existing pipeline than to build a new one."

Reid predicted that if the Alaska line goes into service first, its delivery capacity could be expanded by the initial 1.2 Bcf/d planned on the Mackenzie route for 60% of the cost of building the Canadian project. "If the Alaska project goes first, the Mackenzie pipeline will be put on the shelf for a very long time."

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