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Slashing through red tape Regulators deliver speedy response to Mackenzie gas pipeline filing Gary Park Petroleum News Calgary Correspondent
After 20 years of being bogged down in doubt, disagreement and delay, Canada’s Mackenzie Gas Project is taking on a new image.
From the filing of the preliminary information package for the C$5 billion scheme it took less than two weeks for the 11 regulatory agencies overseeing the project to report that the document has been “evaluated and accepted as complete.”
A formality perhaps and only a small step on a long road, but also a sign that a carefully constructed “single-window” approach to the regulatory phase might work.
It comes just two years after then-Natural Resources Minister Ralph Goodale promised a “one-project-one-assessment” model for the environmental review.
A memorandum of understanding with government, regulatory and aboriginal groups set the lofty goal of establishing a “framework to ensure that impacts of any northern pipeline proposal receive careful consideration.
“The parties are also mindful of a desire to avoid duplication in the evaluation of any project.”
Northern Pipeline Agency resurrected To speed the process, the Canadian government also resurrected the Northern Pipeline Agency, created initially to deal with the regulatory issues related to development of Arctic gas and rendered inactive when a market downturn in the 1980s and aboriginal resistance scuttled the first serious attempt to bring Arctic gas on stream.
The regulatory timetable now shifts to the formal stage, expected to stretch over 24 to 30 months.
It includes filing separate applications, likely in 2004, to develop the Mackenzie Delta’s three anchor fields, the gas gathering system and the pipeline proper along the Mackenzie Valley.
If all goes according to plan, the hearings should be concluded in 2005, followed by facility and pipeline construction in the 2006-08 period, setting the stage for the first deliveries between late 2008 and late 2009.
The preliminary information package, although not a formal application for the pipeline and field development, triggers other processes, including the National Energy Board, Canadian Environmental Assessment, Canadian Oil and Gas Operations and the Mackenzie Valley Resource Management acts.
It outlines plans for a gas-gathering system from the Taglu, Parsons Lake and Niglintgak fields to gas compression and natural gas liquids facilities at Inuvik in the Northwest Territories.
The thinking at this stage involves two pipeline legs — one of almost 800 miles to deliver raw gas to the northwestern corner of Alberta and one of 300 miles to carry 12,000-15,000 barrels a day of gas liquids to Norman Wells in the Central Mackenzie Valley.
The liquids would then flow into the existing Enbridge crude line from Norman Wells to northern Alberta.
But if a combined line for gas and liquids becomes the final choice, the NGL facility would be built at Norman Wells rather than Inuvik. Firm transportation agreements in 2005, once permits issued Firm service transportation agreements will be executed in 2005 once regulatory permits have been issued. If there are no commitments other than from the anchor fields, the Aboriginal Pipeline Group can use its pre-development expenditures to gain an equivalent ownership position in the pipeline, at the expense of the producers’ group.
Details of the actual route will be determined during “further technical and commercial studies, socio-economic and environmental impact assessment” as well as public consultations.
The current map shows five compressor stations which could boost pipeline capacity to 1.9 billion cubic feet per day from the “base case” of 1.2 bcf per day.
The preliminary information package is intended to help the regulatory agencies “identify their roles and obligations” in the regulatory phase.
For now, the delta producers’ group has listed seven challenges that the project faces: A favorable gas-market outlook; verification of sufficient delta reserves without the need for costly exploration in the Beaufort Sea; sound returns for the owners; safe and environmentally acceptable operations; timely regulatory approvals; stable government fiscal terms; and backing from the financial markets.
Among the unknowns is the response from environmentalists beyond their allegations two years ago that the cooperative deal on streamlining the pipeline review seemed crafted towards approval rather than a rigorous assessment.
A spokesman for the Canadian Arctic Resources Committee said at the time that the governments and First Nations were focused only on “how to approve this proposal.”
But an official with the Canadian Environmental Assessment Agency is emphatic that the federal government will show its commitment to a high-quality assessment.
“We want to achieve it in a manner that facilitates coordination and provides opportunities for participation,” he said.
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