A spat over formalities has escalated into open feuding between Ottawa's Mackenzie Gas Project (MGP) Office and the Northwest Territories-based environmental and socioeconomic Joint Review Panel for Canada's C$16.2 billion (US$15.4 billion) arctic natural gas pipeline project. The result is a potential postponement of a report that the National Energy Board (NEB) needs in order to complete the final regulatory ruling, which was promised by the end of this month after almost six years of project reviews.

The formalities are a process known as "consult to modify." The northern regulatory regime requires the federal government, represented by the project office, to give the panel a last chance to respond to Ottawa's plans for dealing with the report and recommendations that the review agency released in December.

In a mid-August letter, project office chief France Pegeot asked for talks about the draft consult-to-modify report to be considered an internal civil service matter and held "in the strictest confidence." But panel chairman Robert Hornal, a Vancouver environmental and aboriginal affairs consultant, rejected the request, saying such private conversations are neither required by the letter of Canadian northern regulatory law nor in keeping with the open and transparent spirit of the gas project review to date.

In reply to Hornal, who forced the issue into the open by digging in his heels and posting his letters on the panel's digital document archive, Pegeot insisted that the Ottawa office is only following a procedural agreement reached last winter. "The public hearing phase of the process is now complete," Pegeot told the panel chairman. "This is an interim step prior to government finalizing and publicizing their final response. The Mackenzie Valley Resource Management Act [MVRMA] does not contemplate third party involvement during the consult to modify process." The project office chief added, "Rest assured that the governments' response will be made public after final decisions are made under the MVRMA and Canadian Environmental Assessment Act."

The Ottawa official observed that "the degree of public engagement on this project has been unprecedented." Federal government representatives have also held months of private follow up discussions with aboriginal leaders since the panel's report, Pegeot disclosed.

Project supporters, saying they are no longer surprised by panel delays and in-fighting among layers of officialdom involved in northern Canadian affairs, shrugged off the latest spat as just one more all too predictable procedural storm. Opponents of the gas project supported Hornal, demanding an open process that would give all concerned a last chance to respond to the federal government's approach. Critics predicted that the pro-business Conservative regime in Ottawa will scrap most of the panel's 176 recommendations for project conditions and an overall northern development policy.

It was not a hard prediction to make. While withholding release of draft final reports on the environmental and socioeconomic side of the Mackenzie project review, the federal and Northwest Territories governments already dealt out an abrupt defeat to an attempt to scale down the gas development and hold back the pace of potential growth.

In a brief spring statement, the governments rejected a panel plan for breaking up the MGP into stages requiring separate approvals. The panel, as a compromise solution to conflicts among divided native communities, called for limiting the MGP to production and deliveries of 830 MMcf/d or the total covered by current firm transportation service contracts with sponsors Imperial Oil, Shell Canada, ConocoPhillips Canada and Exxon Mobil Canada.

The panel's scheme called for separate approvals for ramping up deliveries to the pipeline's initial installed capacity of 1.2 Bcf/d with gas from other arctic producers. Yet more approvals would be required for using built-in expansion potential to 1.9 Bcf/d by low-cost additions of compressor power.

The federal and territorial governments said they "consider this to be an inappropriate constraint on development."

Along the pipeline, the Deh Cho Dene straddling the southern 40% of the 750 mile route fought to hold up the project as a bargaining chip for land claims negotiations that remain far from completed. In the northern half of the Mackenzie River Valley and on the Mackenzie Delta, the Inuvialuit, Gwich'in and Sahtu Dene have claims settlements, own one-third of the pipeline as the Aboriginal Pipeline Group and support the project.

In addition to rejecting staged, slowed development, the federal and territorial governments announced that they can adopt only 10 of the panel's 176 recommendations as written. The accepted proposals were described as the practical ones that focus on tangible issues such as environmental protection and cleanup during and after construction.

In 77 cases, the governments said only the avowed good intentions of panel proposals can be adopted as elements of a grand design for eventually overhauling northern public services and living conditions as the gas industry evolves, often at considerable and unpredictable expense. In more than a score of other cases, recommendations were set aside as beyond the panel's mandate or already covered by other agreements or legislation such as the Ottawa's 2006 federal Mackenzie Gas Projects Impacts Act, which creates a C$500 million (US$475 million) fund and a grant dispensing agency to take care of development issues from housing to health care and alcohol abuse.

The panel annoyed industry and pro-gas development government leaders by taking 25 months to write an elaborate report that paints a complex vision of "sustainable development," derived from a repeatedly extended 22-month marathon of northern hearings. The national and territorial governments vowed to prevent further regulatory procrastination by communicating final conclusions to the NEB in time for it to stay on its promised schedule of a project approval decision in September. All concerned are awaiting some sign that officialdom will find a way past the current procedural impasse.

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