Canada's on-again, off-again Arctic natural gas project is back on track again after behind-the-scenes official maneuvering smoothed out the latest regulatory roadblock (see Daily GPI, Sept. 10; May 24).

Federal Environment Minister Jim Prentice said a procedural wrangle has been "substantially resolved" between representatives of the government in Ottawa and the environmental and socio-economic Joint Review Panel (JRP) on the Mackenzie Gas Project.

In a brief interview Prentice predicted the resolution will enable the National Energy Board (NEB) to keep its promise to make a regulatory ruling on the C$16.2 billion (US$15.4 billion) production and pipeline scheme as early as this month. The decision will certainly come down in time for the federal cabinet to begin final review of the case this fall, the minister added.

All materials required for a completed regulatory review by both agencies will be in the NEB's hands on schedule, Prentice said in clearing up the critical point raised by the latest procedural duel. In a dispute that broke out in August, JRP Chairman Robert Hornal threatened to hold up the ruling by refusing to participate in confidential consultations of a draft version of a report on a process known as "consult to modify."

The feud grew out of a wrinkle in Canada's notoriously complicated northern regulatory regime. Prior to the project ruling, the government is required to provide the NEB with a report on its replies to recommendations of the JRP, including explanations for why some are accepted and others are rejected. Ottawa officials demanded confidential discussions on the draft version of the consult-to-modify document, but Hornal initially insisted on a public procedure that had the potential to escalate into another round of project hearings.

No statements were released on the resolution of the bureaucratic quarrel. But veteran observers of Canadian northern and native affairs pointed to a potent source of potential pressure on Hornal from within the JRP. The panel chairman is a Vancouver environmental and aboriginal affairs consultant. But his group's members include representatives from three of four native communities affected by the project: the Inuvialuit and Gwich'n on the Mackenzie Delta, and the Sahtu Dene in the central Mackenzie Delta.

The three participating First Nations, as aboriginal societies or tribes are known in Canada, are partners in the Aboriginal Pipeline Group, which owns a one-third interest in the gas transmission half of the mammoth project. On top of a continuing share in transportation tolls and jobs on the system, the communities stand to gain employment and other benefits from drilling and development that is expected to result from construction of the first connection between arctic gas and southern markets.

Of the four native societies along the route of the proposed Mackenzie Valley Pipeline, only factions of the Deh Cho in the southern Northwest Territories are actively resisting the project and not represented on the JRP. The Deh Cho were not on the panel because, unlike their northern neighbors, they have not yet concluded one of Canada's comprehensive northern land claims settlements, which include creation of aboriginal self-government and regulatory agencies.

Northern affairs observers pointed to another case as an illustration of the conversion that happens when aboriginal communities decide to participate in economic development rather than resist it in the name of native rights or delay projects as claim or compensation negotiation tactics. In northeastern British Columbia (BC), near the Northwest Territories, the Fort Nelson First Nation is urging the NEB to grant accelerated approval for the first stage of construction of TransCanada Corp.'s proposed Horn River Pipeline to connect BC's budding shale gas fields to the Nova grid in Alberta.

Eh-Cho-Dene Enterprises, a business arm of the Fort Nelson aboriginal community, is seeking NEB approval for a start this winter on clearing the proposed pipeline's right-of-way through the northern woods, well before a full and final decision, including conditions on construction, is expected. An accelerated ruling on the first stage of the work would provide "greater flexibility, time and resources," the native business says. "We would be able to participate with more of our own employees, equipment, and contractors -- native and non-native -- and be overall less reliant on outside support to fulfill contract obligations."

The aboriginal business request is supported by the Northern Rockies Regional Municipality, representing residents of all backgrounds in the Fort Nelson area. Early approval for parts of construction that remote communities can handle is a way of ensuring that they obtain the greatest possible benefits from projects in their back yard, said the local government.

"Typically, a pipeline company will clear and construct a new pipeline within the same season. To do so large contractors are required to ensure the work will be completed in a timely matter. As a result they require equipment from outside the Fort Nelson area in order to meet the demands of tight time limits, thus reducing the opportunities for local employment and contracts," the northern regional government said.

Accelerated, staged approvals are an as-yet unused tool for spreading positive effects of industrial projects that deserves to be tried out, the northern BC leaders said. "Currently, with the expansion of activity in the Horn River Basin (a Canada shale gas drilling hot spot) many locals are not realizing the positive impacts due to many workers being flown in directly from outside our community right into the field and camp."

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