Canada’s northern natural gas consortium is fighting off an environmental protest that threatens to add dimensions in complexity-and approval time, especially-to the proposed Mackenzie Valley pipeline.

The critics go far beyond standard conservationist issues of pipeline routes and effects on wildlife and natural features to challenge the reasons for tapping and transporting gas from the Mackenzie Delta at all. The resistance aims to force an inquiry into the use of the gas, and it draws some of its ammunition from the industry.

The northern project shows signs of contributing to increases in greenhouse gas emissions by accomplishing little except to deliver fuel for oilsands plants, said Karen Wristen, executive director of the Ottawa-based Canadian Arctic Resources Committee.

Such conservation groups are seeking an investigation of links between gas and oilsands projects at meetings in Ottawa with the Canadian Environmental Assessment Agency, Wristen said. Talks on the apparent connection between the oilsands development wave and northern gas are also being pursued with the Canada’s federal environment and northern affairs ministers, she added.

The agency has been holding preliminary meetings with groups that intend to participate as interveners in the regulatory review of the Mackenzie gas project. The makeup of a co-operative panel of federal and territorial authorities is expected to be announced this spring.

Wristen said the need for the investigation was demonstrated most clearly and directly by disclosure in early spring of an agreement between the Dene Tha’ First Nation in northern Alberta and TransCanada PipeLines Ltd. The arrangement established a long-term consultation protocol that laid the ground for co-operation between the pipeline company and the aboriginal community.

Initially, the focus is on established operations of TransCanada’s Nova gas-gathering grid in Alberta. But at the time the agreement was made, both sides also spoke openly about possibilities for constructing a new Nova line, to be called the north-central crossing, between the oilsands capital of Fort McMurray and the end point of the Mackenzie project near the Alberta border with British Columbia.

TransCanada, the natives and oilsands developers promptly stopped talking about the north-central crossing after the conservationists seized upon the idea as proof that the environmental assessment agency needs to do some investigating. But the line figured prominently on maps used in investor presentations that were readily available to critics with Internet research skills.

As the behind-the-scenes battle developed over the environmental review’s terms of reference, the industry also resorted to legal arguments used in previous and smaller versions of the dispute.

The relevance of uses of gas transported by proposed pipelines to project environmental reviews has been a fighting matter in British Columbia, where the issue erupted during hearings on a gas connection between Washington state and Vancouver Island.

Neither side won a total victory in the B.C. case. The project, the Georgia Strait Crossing, eventually won approval. But the approval was held up for more than a year and by the time it was granted by federal authorities, provincial regulators directed pipeline project partner BC Hydro to look for lower-cost, environmentally-friendlier anchor customers than proposed gas-fired island power generation.

The critical questions in Canada have been whether environmental critics of a pipeline project have to demonstrate a direct connection between it and end uses of the gas to be delivered in order to trigger a widened regulatory review, and whether the user developments undergo separate but adequate assessments.

In the arctic pipeline case TransCanada president Hal Kvisle, for instance, is emphasizing that there is no direct connection with oilsands development.

The pipeline does not rely on oilsands projects as anchor customers. Nor do oilsands projects rely on arctic gas. Alberta and federal authorities have been conducting joint environmental reviews of oilsands projects separately from other issues, including gas development.

But the conservationists point to evidence that there is at least some indirect linkage between northern gas and the oilsands. Kvisle himself has described “voracious appetites” for gas by oilsands developments as a key factor in driving up overall Canadian demand and creating a need for arctic supplies.

Oilsands gas demand also figures in a TransCanada toll case before the National Energy Board, where the phenomenon is described as a factor in driving up “supply risk” for the company’s eastbound mainline out of Alberta by accelerating the emergence of spare capacity on the system.

Gas consumption by oilsands projects for heat processes and power generation will triple by 2015 to 1.8 Bcf/d, say forecasts by TransCanada. The figure exceeds anticipated deliveries by the Mackenzie pipeline for at least its early years in operation. The arctic gas consortium’s engineering plans currently call for maximum capacity of 1.9 Bcf daily to be reached eventually by additions of compressor power.

Conspiracy theorists in the environmental faction also point to what they see as implicit connections between arctic gas and oilsands developers. Two of the gas producers in the Mackenzie consortium, Imperial Oil and Shell Canada, rank among the largest participants in oilsands development, while ConocoPhillips Canada also belongs to both camps.

The environmentalists can also point to authoritative reports on the state of the Canadian industry that have repeatedly highlighted the role of gas in the oilsands. Current gas use by oilsands developments has been described as outright “unsustainable” by the Alberta Chamber of Resources.

Oilsands projects consume up to an Mcf of gas to extract a single barrel of oil – a use of one-sixth as much energy as is in that barrel to produce it.

The NEB and the Canadian Energy Research Institute have also identified gas as a key cost issue for oilsands projects, as have financial statements of producers in explaining high and rising production costs. A forthcoming NEB state-of-the-industry report on the oilsands, due out later this month, is expected to raise the issue again.

In the meantime the environmentalists made the most of the understanding between the Dene Tha’ and TransCanada, refusing to be distracted by official statements that the oilsands pipeline link is still one tentative plan among many for transporting arctic gas and nowhere near approval.

“This deal means the sole function of the Mackenzie pipeline is to supply natural gas to extract oil from the Athabasca tar sands, the world’s dirtiest source of oil,” said Elizabeth May, executive director of the Sierra Club of Canada.

Wristen, a lawyer, said Canada’s national environmental agency must widen the scope of its northern pipeline inquiry to include the project’s effects on Canada’s international commitment to reduce greenhouse gas emissions.

“The end use of the product (natural gas) is critical,” Wristen said. “If Mackenzie gas were to displace coal burned in electricity generating plants or diesel oil burned to heat homes . . . the pipeline could make a positive contribution to meeting Canada’s Kyoto commitments. Now that we know the gas will be burned just to heat up the tar sands to extract oil, it’s a different case entirely.”

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