NGI The Weekly Gas Market Report
On the heels of a decision showing that Canadian landowners canforce changes, the National Energy Board has called hearings on 38objections to the route of Alliance Pipeline Project.
The NEB stressed that it will deal only with route details andnot reopen the tangle of economic and competitive issues whichdelayed Alliance’s in-service target date by a year until 2000 byigniting a 77-day marathon of hearings last year. There are,however, still so many unresolved landowner issues along theproject’s path across British Columbia, Alberta and Saskatchewanthat the NEB scheduled a string of further hearings to commenceApril 12 and run well into May. A travelling NEB panel will holdthe sessions in the landowners’ communities.
The additional hearings come as no surprise to Alliance, which filed details and posted notices of its route this winter. Theproject already had extensive preliminary landowner discussions and does not expect serious delays to its construction schedule.The NEB stressed that compensation for interference withestablished land uses is outside its jurisdiction. Landowners havethe right to apply directly to the Canadian natural resourcesministry for negotiation or arbitration. But the NEB has alsoserved notice on pipelines that it is prepared to listen with anopen mind to landowners and require route changes at the expense ofprojects. The warning came in a ruling on a leg of Maritimes &Northeast Pipeline in Nova Scotia, where William (Billy) MacDonaldsuccessfully appealed for an expensive modification. The boardordered M&NE to make changes costing up to an estimatedCDN$431,000 (US$305,000) to avoid interfering with MacDonald’sproperty and his Red Tail Nature Awareness Camp as well as habitatfor wildlife such as wood turtles, moose and deer.
While the NEB said the Nova Scotia case involved “uniquecircumstances,” it will follow the same procedure in the Alliancehearings. The method lets landowners make cases that they arespecial, by hearing them out one at a time.
At the same time, the momentum that drove Alliance through toapproval last year, as a producer-inspired alternative to afiercely-resisting Canadian pipeline establishment, continues tobuild.With gas prices holding firm north of the border, thanks tocurrency-exchange rates as well as expanding delivery capacity,Canadian producers continue to accelerate development.TalismanEnergy, for instance, declared intentions to dedicate 75% of itsCanadian budget to gas this year.
Concentration on gas drilling and development shows amongpillars of the Canadian industry such as Alberta Energy Co., PocoPetroleums and PanCanadian Petroleum. Much of the new fieldactivity is along the Alliance route in northeastern B.C. andnorthwestern Alberta. Aggressive competition is under way to seewhich Canadian publicly-traded producer can top 1 Bcf/d, and AECexpects to be 90% there this year. Talisman president Jim Buckee,announcing recent drilling successes of up to 58 MMcf/d per well innortheastern B.C. and northwestern Alberta, voiced a widespreadCanadian consensus: “I am a strong believer in the long-termstrength of the gas market as industry supplies are provingelusive, while the new pipelines connect Canada integrally to thelargest market in the world.”
Gordon Jaremko, Calgary
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