U.S. economists back Mackenzie Valley pipeline

Gary Park

Two United States energy economists are betting that a C$3 billion gas pipeline will be operating along the Mackenzie Valley before gas starts flowing from the North Slope.

University of Houston economists Ronald Oligney and James Longbottom said the proposed delivery system from the Mackenzie Delta down the Northwest Territories would cost less to build.

They also said it would allow for less risky, multi-stage development, including an undersea link from the North Slope to the Delta, despite opposition from politicians in Alaska and the Yukon.

The study forecasts that gas prices will rise in the next two years to levels that make pipeline construction economically viable.

It says the United States will need 12 billion cubic feet of gas a day from Arctic sources — more than double the most optimistic projections of combined North Slope and Delta production.

The economists suggest that to reduce cuts, risks and uncertainty there should be staged pipeline development, starting with a link from the Delta, and followed by a line under the Beaufort Sea.

They estimate that the peak construction period would generate the equivalent of 23,161 jobs lasting one year.