CALGARY — The prospect of a federal election this year has one backer of the long-stalled Mackenzie pipeline concerned more delays may loom ahead.
“An election would certainly cause delay. There’s no question about it. We’re under a bit of a time crunch here,” said Bob Reid, president of the Aboriginal Pipeline Group, which is entitled to a one-third stake in the line.
The Mackenzie project cleared a key milestone on Thursday, after the National Energy Board issued what’s known as a certificate of public convenience and necessity.
The federal energy watchdog granted its approval in December, but needed the blessing of the federal cabinet before it could issue the permit.
The next order of business is for the consortium building the project — led by Imperial Oil Ltd. (TSX:IMO), along with Shell, ExxonMobil, ConocoPhillips and the APG — to hammer out a financial agreement with the federal government.
Former environment minister Jim Prentice put the talks on hold last year until the regulatory process wrapped up. He has since resigned his post, and now the file is in the hands of Indian and Northern Affairs Minister John Duncan.
Among other things, the financial support could include loan guarantees, like the ones Washington has offered for a much larger pipeline planned for nearby Alaska.
“I don’t know what our fiscal discussions will come up with, but something to kind of level the playing field would be what we’re looking for,” Reid said.
The National Energy Board requires the Mackenzie partners to make a decision to move ahead with the pipeline by the end of 2013 and to start construction by 2015.
Once Ottawa and the project’s proponents agree on terms, the partners still need to hire staff, obtain thousands of permits from government agencies and local boards and complete loads of engineering work.
“With the work that we have to do, it’s important we move ahead fairly quickly on this,” said Reid.
Energy consultant Doug Matthews agrees a possible federal election is a major “wildcard.” In the event the file moves to a new minister following the potential vote, it could take several months to bring him or her up to speed.
Matthews said he’s frustrated that Ottawa and the Mackenzie backers have been tight-lipped about what kinds of incentives they have been discussing. Prentice first mentioned the offer more than two years ago, and no details have emerged since then.
Government officials form the Northwest Territories have been touting the economic boost the pipeline would bring not only to the North, but to the rest of Canada as well. Ministers in Ottawa and top executives at Imperial ought to be equally vocal, Matthews said.
“That part of it is outrageous, because there is no broad public support for the project, primarily because the public doesn’t know anything about the damn project.”
If built, the Mackenzie pipeline would connect natural gas from near the coast of the Beaufort Sea in the Northwest Territories to northwestern Alberta, where it would link up with TransCanada Corp.’s (TSX:TRP) vast network.
The most recent cost estimate in 2007 was pegged at $16.2 billion.