Panel weighing Mackenzie pipeline issues long-awaited environmental report

CALGARY — A nearly decade-long quest to build a natural gas pipeline through the Northwest Territories has cleared a major hurdle with the release of a years-overdue regulatory report Wednesday.

CALGARY — A nearly decade-long quest to build a natural gas pipeline through the Northwest Territories has cleared a major hurdle with the release of a years-overdue regulatory report Wednesday.

The federally appointed Joint Review Panel, which has been weighing the possible effects of the Mackenzie Gas Project on Arctic ecosystems and communities, said the project could “provide the foundation for a sustainable northern future.”

However, it said its conclusion is conditional on the “full implementation” of its 176 recommendations highlighted in the 679-page report.

“The panel’s mandate required it to consider the impacts not only of the Mackenzie Gas Project itself, but also the impacts of the reasonably foreseeable developments associated with the potential expansion of the pipeline’s capacity in the future,” stated panel chair Robert Hornal.

“The panel was also required to consider the cumulative impacts of the project in combination with other developments.”

In 2000, a consortium of companies led by Imperial Oil Ltd. (TSX:IMO) began looking at the possibility of building a pipeline to carry gas from fields near the Beaufort Sea south through the Northwest Territories to Alberta.

When the seven-member joint review panel began its work in 2004, it was expected the process would take about 10 months.

The panel gathered information from 558 presenters during public hearings in 26 centres and northern communities.

Companies backing the project have been frustrated by the slow pace of the regulatory process. Communities along the route have been waiting anxiously to see the development’s economic benefits.

“A lot of businesses are just holding on, and I expect that if the pipeline doesn’t go ahead it will be very difficult for them to continue on,” Bob McLeod, the Northwest Territories cabinet minister who oversees energy development, said in a recent interview.

The National Energy Board, a federal regulator, is set to begin its hearings in April, and will incorporate the Joint Review Panel’s recommendations into its final decision on whether the project can go ahead.

The more than 1,200-kilometre pipeline, according to its most recent March 2007 estimate, is expected to cost $16.2 billion, more than double its 2004 price tag of $7 billion.

Imperial Oil Ltd. is the lead partner in the Mackenzie project, which also includes Imperial’s U.S. parent, ExxonMobil Corp. (NYSE:XOM), ConocoPhillips (NYSE:COP) and Royal Dutch Shell PLC (NYSE:RDS).

The Aboriginal Pipeline Group, which acts on behalf of communities along the pipeline’s route, also has an ownership in the pipeline.

Natural gas shipper TransCanada Corp. (TSX:TRP) would feed the Mackenzie gas into its Alberta pipeline network, and participates in the project through its investment in the APG.

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