For the relatively small price of a slight procedural delay, the Mackenzie Gas Project won the opening round of a regulatory fencing match with conservationists that had potential to cut the ground out from under the northern pipeline project.
Demands by Canadian critics for an inquiry on a national and even international scale into future uses of northern natural gas were rejected in the final version of the mandate for the project’s environmental impact assessment. A fight to keep southern gas uses out of the northern regulatory review cost the project about a month.
The 70-page terms of reference, a detailed template for the review, requires Mackenzie sponsors Imperial Oil, Shell Canada, ConocoPhillips Canada, ExxonMobil Canada and the Aboriginal Pipeline Group to take into account effects of greenhouse-gas emissions and global climate change in only a limited fashion. The assessment will attempt to forecast at least a reasonable range of possibilities for temperatures to warm up over the project’s life span in Canada’s Northwest Territories, and especially on the Mackenzie Delta where the production wells and gathering pipelines will be built.
The engineers will be required to document the sensitivity of the project to climate change and show how the design takes the issue into account. But the environmental template kept a lid on the bigger can of worms — how the industry expected to consume northern gas, and especially the Alberta oil sands, will affect the nation’s overall greenhouse-gas emissions. Unlike the United States, Canada has ratified the Kyoto Protocol on reducing greenhouse-gas emissions.
A coalition of environmental groups such as the Canadian Arctic Resources Committee and the Sierra Club of Canada attempted to make the northern gas project review comply with their view of the spirit of the Kyoto treaty. The groups urged federal, territorial and aboriginal authorities to make the northern pipeline review a test case of compliance with the international commitment. Attempts will still be made to add end uses of the gas to the pipeline review, but the exclusion of the topic from the official mandate for the regulators confronts the environmentalists with an uphill battle.
The conservationists wasted no time in affirming they will keep on trying to widen the northern pipeline review’s agenda. “We’re taking a relatively prized low-carbon fuel and using it to produce a high-carbon fuel,” said Sierra Club leader Elizabeth May. She was referring to widespread belief that virtually all the new Mackenzie gas supplies will wind up as fuel for rapidly developing oilsands extraction projects. Consumption by the Alberta oil plants is forecast to triple by 2015 into the range of 1.8 Bcf/d. Projects on the drawing boards of the TransCanada-Nova gas gathering system in Alberta include a new pipeline, titled the north-central crossing, across the top of the province from the end point of the Mackenzie line east to the oilsands region. “We’ll raise that in the hearings even if it’s not in the terms of reference,” May vowed.
While the Sierra Club is polite and diplomatic by the standards of the industry’s environmental critics in Canada, others are less restrained. As the case develops, some are expected to call attention to dual roles of Imperial, Shell and ConocoPhillips as oil sands developers as well as Mackenzie project owners. The regulatory decision on the terms of reference for the environmental impact assessment left the project sponsors entitled to reject oilsands questions as irrelevant, and no time was wasted in doing so.
“We come at it from the aspect that we don’t know what volumes will go to the oilsands or elsewhere,” Mackenzie project spokesman Hart Searle said. “How would you track that? How would you know?” Corporate decisions on oilsands and northern gas projects are separate, Searle added.
The regulators predicted the Arctic gas environmental review will take 16 months after the forthcoming formal filing of full construction applications. The process will be run by a seven-member panel appointed by Canada’s federal environment minister, the territorial Mackenzie Valley Environmental Impact Review Board and the aboriginal Inuvialuit Game Council.
The review panel chairman, Robert Hornal, is a Vancouver consultant with a 40-year background in northern, environmental and aboriginal affairs as a federal civil servant. The Mackenzie project, which formerly set its sights on filing construction applications this summer, is no longer declaring target dates. The documents will be presented when they are complete and all the partners are ready, Searle said.
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