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Canada lowers barriers for Mackenzie Valley pipeline approval Draft deal would reduce regulatory approvals by one year; Northwest Territories offer C$100 million in loan guarantees to aboriginals; federal government urged to provide ‘seed money’ By Gary Park PNA Canadian Correspondent
Governments are rallying to the cause of the troubled Mackenzie Valley pipeline proposal, promising to slash one year off the normal approval process and dangling millions of dollars in support of the project.
The Canadian government struck a tentative deal with the Northwest Territories and aboriginal groups to streamline an environmental review of a valley route.
Federal sources say the memorandum of understanding would remove one of the major hurdles blocking construction of a pipeline from the Beaufort Sea and Mackenzie Delta to Alberta.
Under existing regulations, applicants would be required to go through a tangle of review processes and obtain more than 300 permits to build the C$3 billion line.
The draft agreement would establish a “super board,” consisting of up to 20 people, to oversee the environmental review, which sources say would reduce the time needed to get a project up and running by about one year.
The sources said the agreement reflects a government desire to establish a level playing field with Alaska for approval of either an Alaska Highway or Mackenzie Valley pipeline, noting that Alaska has already taken steps to ensure its red-tape is kept to a minimum. Environmentalists frozen out But environmentalists are fuming that they have been frozen out of the discussions that so far have involved seven governmental, regulatory and aboriginal groups.
“What we’re really looking at is, ‘How to approve this proposal,’” said Kevin O’Reilly of the Canadian Arctic Resources Committee, a non-profit group with offices in Yellowknife and Ottawa. “It’s really crafted toward approval of a proposal rather than a rigorous assessment.”
Although the draft agreement emphasizes that the “impacts of any northern pipeline proposal receive careful consideration,” the final deal will allow for no more than three months of public comment once it is released in September.
Canadian Arctic Resources Committee Executive Director John Crump said there needs to be a “strenuous examination of the costs and benefits” of a pipeline, especially since global warming and free trade have surfaced as issues since Arctic development was last an issue 30 years ago.
He said doubts have been raised about the validity of U.S. and Canadian permits issued in 1977, arguing “we don’t think those permits are like Rip van Winkle and can wake up unchanged after 20 years.”
The draft says the review will combine the work of the National Energy Board, which approves pipelines across Canada and gas exports, the Northwest Territories Water Board, the Mackenzie Valley Land and Water Board and the Yukon Water Board. Northwest Territories offers loan guarantees Meanwhile, the Northwest Territories government has offered up to C$100 million in loan guarantees to help aboriginals acquire part ownership of a Northwest Territories pipeline, while a Canadian government committee has called for at least C$100 million in federal seed money to accelerate Arctic natural resource development, in addition to any federal financial backing a pipeline development might receive.
Northwest Territories Finance Minister Joe Handley said his government is ready to provide financial guarantees for the Aboriginal Pipeline Group, which has represented seven aboriginal groups in negotiations with the Mackenzie Delta gas owners — although two of those Native organizations have now expressed strong opposition to the Delta owners’ offer of one-third aboriginal equity in their pipeline.
“As far as our government is concerned, we’re ready to ask the APG, ‘How can we help you?’ If it came down to it, we could look at up to C$100 million in a loan guarantee. No-one has asked for that, but in my mind that’s the kind of limit I have.”
Handley said the money would enable the Aboriginal Pipeline Group to obtain commercial bank loans, a low-risk commitment for the Northwest Territories given the strong economics supporting a pipeline. He said the federal government has held preliminary talks with the Aboriginal Pipeline Group, but has not yet been asked to contribute money or provide guarantees. Federal money needed to improve regulatory regime Federal Natural Resources Minister Ralph Goodale said grants or guarantees would represent “a very major policy decision” that he was not prepared to speculate about “because there has been no substantive discussion about it at the federal level.”
However, the federal government’s National Round Table on the Environment and the Economy said the money is needed to improve the regulatory regime, open the way for aboriginal participation, provide a stronger investment climate and assess the impact of development on the environment.
Round table executive director David McGuinty said the oil and gas industry has made it clear that strategic federal investment is a vital underpinning of development. He said the existing regulatory agencies and regulations in the Arctic are incapable of dealing with the influx and speed of development that would accompany a pipeline project.
The round table also urged the government to expedite the settlement of unresolved aboriginal land claims and transfer more federal powers to the Northwest Territories and aboriginal governments.
It estimated a Mackenzie Valley pipeline would generate C$1 billion a year in economic activity during the construction phase, 2,540 full-time jobs and direct and indirect spending on field development of C$1.1 billion over four years.
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