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US a friend in need NWT sees efforts to replace coal, oil with gas as positive for Mackenzie; minister hopes shale gas will stabilize commodity prices Gary Park For Petroleum News
A mounting campaign among United States lawmakers to legislate use of natural gas rather than coal and oil to generate electricity holds hope for the Mackenzie Gas Project, said Northwest Territories Industry Minister Bob McLeod.
Based on a series of meetings with decision-makers in Washington, D.C., he told Canadian Press “everyone agrees all forms of energy will continue to be required and demand for energy in North America is going to continue to grow.”
The possible use of tax incentives in the United States to increase gas consumption for transportation “makes a lot of sense” in the campaign to introduce cleaner-burning fuels, McLeod said.
He suggested the United States will need all the gas it can get if it embraces wider use of the resource and regardless of the sudden emergence of shale gas.
McLeod said some observers and analysts have raised questions about the need for the MGP given the potential of shale gas.
“What we’re finding is that amounts of shale gas will be beneficial for natural gas because the prices will be more reliable and predictable,” he said.
“In the past utility companies have tended to (rely on coal-fired power) because of the volatility in natural gas prices.”
McLeod said the NWT also enforces the use of natural gas because it emits far less carbon dioxide than coal- and oil-based energy.
Inuvik Petroleum Show Despite the hiatus in Canadian Arctic exploration, pending a regulatory verdict and corporate decision on the MGP, the annual Inuvik Petroleum Show marked its 10th anniversary in June with about 400 delegates and 100 booths.
Larry Peckford, an event organizer, told the CBC the response was better than anticipated in the midst of a slow exploration year, but a decision to shift the focus from the MGP to offshore exploration in the Beaufort Sea was blindsided by BP’s blowout in the Gulf of Mexico.
While reluctant to “gain from someone else’s misfortune,” Bob Reid, president of the Aboriginal Pipeline Group — a potential one-third equity holder in the MGP — said BP’s Macondo incident could provide a lift for natural gas.
“If a gas line leaks, it basically dissipates into the air,” he said. “It doesn’t pollute the ground and you won’t find any ducks or geese coated with natural gas.”
Reid also told the delegates that a pipeline for the MGP would be an onshore project, posing a different set of risks than offshore drilling.
Business concern about delays McLeod said a lot of NWT businesses are taking a grim view of the continued delays in the MGP and have a “lot of questions about whether they’ll survive much longer if there’s no … pipeline.”
APG Chairman Fred Carmichael took the high road, arguing the project is “nowhere near dead. Come September (when the National Energy Board is scheduled to issue its final verdict on the MGP application) I think you’ll see the sparks fly again.”
Doug Matthews, a Calgary-based oil and gas analyst, said that the time being taken by the NEB “is not necessarily a bad thing” except for businesses that had been hoping Beaufort exploration work would fill some of the void caused by the slowdown in MGP-related activity.
Brian Love, manager of the Yukon government’s oil and gas branch, said his government and Imperial Oil, lead partner in the MGP, have reached an agreement to manage the impact of MGP pipeline construction if the Dempster Highway to Inuvik becomes the major trucking route for materials.
He also said he hopes the NEB will require the MGP consortium to build a spur line into the northern Yukon if viable natural gas discoveries are made in that region.
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