Mackenzie gas pipeline project still faces unresolved issues

Gary Park

Petroleum News Calgary correspondent

The formal regulatory process will begin rolling in early 2004 on the Mackenzie Gas Project and could be completed within two years, allowing gas to start flowing as early as 2009 — assuming all the approvals are obtained, said a member of Canada’s National Energy Board.

John Bulger told a Ziff Energy Group conference that some issues remain unresolved, including discussions among the responsible regulatory agencies that hope to coordinate the process.

He said the objective of averting duplication still needs an agreement along the lines of a previously negotiated agreement by the 13 agencies that share jurisdiction over a Mackenzie Valley pipeline.

Bulger also said he anticipates a comprehensive U.S. energy bill, if adopted, will offer subsidies for a pipeline from the North Slope to the Lower 48, although he is uncertain what impact that might have on the Mackenzie project and domestic Canadian markets.

Of Canada’s other prospects to meet the North American gas demands, he said the East Coast holds the “promise of large resources” in the range of 22 trillion cubic feet, while coalbed methane could be an important piece in the supply equation.

But, despite its “enormous” potential, development of coalbed methane is “very dependent” on the industry finding coals with the capability to yield gas at acceptable rates and developing the technology to lower costs, Bulger said.

To date, he said, the 20 coalbed methane pilot projects operating in Western Canada are achieving mixed results, indicating it will take the next few years to “demonstrate how successful” the sector can be.

Bulger explained that the challenge for the Western Canada Sedimentary Basin is to step up well completions just to hold the line on production at a time when a doubling of gas wells through the 1990s yielded only a modest increase.