Picking up the pace

Canadian minister promises to tackle Mackenzie regulatory hurdles

Gary Park

Petroleum News Calgary Correspondent

Canada’s Natural Resources Minister John Efford has thrown his weight behind the Mackenzie Gas Project, pledging to do whatever he can to remove regulatory obstacles.

He said the federal government is committed to the project and will get more involved in heading off delays that Imperial Oil, the project’s lead partner, is worried could increase costs and push the start-up date to 2010.

Efford told reporters in Washington, D.C., on March 3 that the major sticking points are aboriginal land claims, completing environmental assessment and speeding up the pace of other regulatory approvals.

He said “there hasn’t been enough (Canadian) government involvement” in dealing with first nations — a challenge he described as crucial.

“We haven’t done our job in a timely fashion, so speeding up that process and getting a settlement is absolutely crucial to getting the pipeline started,” he said.

“We are now getting refocused and are going to set a direction and address the issues of concern.”

Deh Cho want land claim resolved

The Deh Cho, whose lands cover the lower 40 percent of the Mackenzie Valley pipeline route through the Northwest Territories, say they have not been fully consulted and are ready to take their case to the federal court.

Imperial Chief Executive Officer Tim Hearn gave a rare display of frustration last month, telling reporters he was “concerned right now about the pace of things,” especially with the Mackenzie Valley Environmental Impact Review Board’s dithering over when and how its hearings should take place.

Hearn warned the slow pace could add six months to the regulatory process and postpone the start of construction.

The Mackenzie gas producers (Imperial, Shell Canada, ConocoPhillips Canada and ExxonMobil Canada) along with the Aboriginal Pipeline Group hope to complete all of their regulatory applications this year.

Efford said the prospect of delays is a “legitimate concern,” putting pressure on his government to work with industry and stakeholders in a “timely manner.”

While in Washington, Efford told Sen. Larry Craig of Indiana and Sen. Jeff Bingaman of New Mexico that the Mackenzie project is a top priority for Prime Minister Paul Martin.

He also impressed on Bingaman that Canada prefers to let market prices determine whether the Alaska gas project goes ahead rather than see the U.S. Congress introduce price guarantees to get North Slope gas to market.

Pierre Alvarez, president of the Canadian Association of Petroleum Producers, who attended an energy seminar sponsored by the Canadian embassy in Washington, welcomed Efford’s pledge to get the Mackenzie project on the move.

He told reporters that there is a “great deal of frustration from an applicant’s point of view” in negotiating the regulatory process.

Piling on layers of new regulations “doesn’t necessarily lead to a better regulatory result or environmental assessment,” he said.