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Canada to fast-track Alaska Learned from Mackenzie gas line mistakes, will speed Alaska line passage Gary Park For Petroleum News
The Canadian government is promising not to repeat the plodding process that has been a drag on the Mackenzie Gas Project if it is asked to regulate an Alaska gas pipeline across Canadian territory.
A senior federal official told a conference of U.S. and Canadian energy officials in Calgary May 5 that Ottawa is confident it can match U.S. timelines if an application is submitted.
At the federal level, Canada is making preparations for “an effective, efficient screening process,” said Sue Kirby, an assistant deputy minister with Natural Resources Canada.
Delays in handling the Mackenzie gas pipeline file have been identified by the consortium partners as a major factor putting the project at risk.
“We are hoping we can learn from the experiences we’ve had on Mackenzie,” Kirby told reporters.
She said it will be “helpful to have an Alaska pipeline organized as a major project and have the co-ordination of all federal departments … with greater weight in terms of timelines that must be met and with memorandums of understanding between federal departments.”
Kirby said a major projects office established in 2007 by Prime Minister Stephen Harper’s government will make a “big difference” once Alaska awards a project license to set the ball rolling on the massive undertaking.
She said the regulatory review will be designed to fit the project, but it must include a “modern, independent and efficient environmental process.”
Aboriginal support critical One of the toughest challenges involves the construction of a pipeline across aboriginal lands in the Yukon, British Columbia and possibly Alberta, with the support of First Nations “absolutely critical” to the success of the project.
She said Ottawa has a team available to handle aboriginal consultation and engagement and workshops have been held to identify employment, training and business opportunities.
“It won’t be sufficient, but it’s a start,” she said. “We’re spending more time up front.”
Plenty of room for both gas lines Kirby said she was not troubled by the prospect of competition between the Mackenzie and Alaska pipelines, noting that the decline in conventional gas production and the rising demand for gas-fired power generation suggests there will be “more than enough room” for both projects to “deliver significant gas volumes (currently planned for about 4.5 billion cubic feet per day from Alaska and 1.2 billion cubic feet per day from the Mackenzie Delta) and to encourage U.S. exploration activity in the Arctic.”
She said the Canadian government would prefer to have a pipeline through the Alberta gas hub to give Alberta’s petrochemical plants access to ethane from the liquids-rich North Slope gas and to help correct underutilized capacity in Canadian pipelines. (ConocoPhillips has calculated that 100,000 barrels per day of ethane could be removed from 4 billion cubic feet per day of Alaska gas).
Boosting volumes on Canadian pipelines would benefit Alaska and Alberta shippers and ultimately consumers by reducing tolls.
Alaska open season by September 2009 Tony Palmer, TransCanada’s vice-president of Alaska development, told the conference his company’s system currently delivers about 15 billion cubic feet per day and has 2 billion cubic feet per day of surplus space, which could grow to 4 billion-5 billion cubic feet per day without Arctic gas being injected.
He estimated that feeding Alaska gas into the Alberta network could save Western Canadian producers about C$10 billion over the first 15 years.
Palmer said that if TransCanada receives a license for an Alaska pipeline, an open season to secure shipping commitments could be completed by September 2009, four months behind its original forecast, but it would have to be preceded by a new cost estimate.
Mac line faces another delay Meanwhile, the Mackenzie Gas Project faces another delay, with a Joint Review Panel report now not expected in 2008, Brian Chamber, executive director of the Northern Gas Project Secretariat, said.
Until it receives the panel’s recommendation, the National Energy Board is unable to hear final arguments, stalling until 2010 the regulatory approvals which had been expected in 2009.
Bob McLeod, the recently appointed industry minister in the Northwest Territories, had already voiced concern that the Mackenzie gas line’s regulatory requirements were too onerous and too long, noting that the more time that is needed the more a revival of northern exploration is delayed.
Canada’s Industry Minister Jim Prentice, who has cabinet control of the Mackenzie Gas Project file, has agreed Ottawa must streamline regulations to approve permits for the project. The various boards and agencies are planning to “bundle” permits in an effort to shrink the number of applications.
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