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August 2008

Vol. 13, No. 34 Week of August 24, 2008

Mackenzie line threat to bird life?

Agency wants restrictions on gas line impact; reports show tensions within government circles over Canada’s investment reputation

By Gary Park

For Petroleum News

The sole protected wildlife area in Canada’s Mackenzie Delta is threatened by the Mackenzie gas project, claims a study by the federal government’s conservation branch.

But shelving the project could have damaging consequences for Canada’s investment reputation, the Canadian Wildlife Service (CWS) warned.

The CWS is urging the physical impact of a Mackenzie Valley pipeline, if it proceeds, should be restricted to 1 percent of the Kendall Island Bird Sanctuary, a 240-square-mile blip near the coast of the Beaufort Sea.

The sanctuary was created in 1961 as a shelter for migratory birds such as snow geese and tundra swans and is home base for grizzly bears, polar bears and wolverines.

CWS regional director Bill Gummer told a federally-appointed environmental assessment panel almost two years ago that if Mackenzie Delta gas is developed in a “manner which reflects the highest standards of environmental practice,” the impact would be minimal.

But Canwest News Services has obtained federal documents indicating government officials fear the pipeline footprint could be greater than 1 percent.

A February 2006 draft briefing note attributed to Giles Morell, assistant director of the Northern Oil and Gas Directorate of Indian and Northern Affairs Canada, said that any “future subsidence and destruction of habitat through flooding” that is linked to the Mackenzie project could surpass the basic threshold.

Gummer told the regulatory hearing that although subsidence is a “major concern,” there was no consensus on how much of the region would be affected.

A briefing note by Morell in early 2007 indicates Environment Canada fears the 1 percent level may already have been exceeded.

According to a briefing note by Morell, the CWS can refuse permits for the project, adding the Kendall Island sanctuary “has been identified as a potential show stopper … and is one of the top concerns for the proponents.”

But the note also warns that if the Mackenzie project is halted “the competitiveness of Canada will be put into question, with negative implications for Canada’s investment climate.

“Canada could also lose an opportunity as a member of circumpolar countries to become a global model for sustainable development in the Arctic.”

Hinting at disagreement within the government, the 2007 note said Indian and Northern Affairs Canada is worried that “lands with high resource values are not sequestered indefinitely.”

Environment Canada, which oversees the CWS, has suggested a Delta-wide land-management approach, which Indian and Northern Affairs believes could “add to the burden of obtaining regulatory approvals, increase costs and limit exploration and development” — all matters of special concern to the Canadian government of Prime Minister Stephen Harper, the Northwest Territories government and the industry.

The issue has surfaced prior to a scheduled visit by Harper to the Mackenzie region later this month to reinforce his administration’s pledge to advance Canada’s claims to Arctic sovereignty.

He has promised to introduce an “integrated northern strategy” that gives equal weight to sovereignty, the environment, economic development and the social concerns of aboriginal communities.





Frustrations boil over

Norman Wells, which stands to be one of the major beneficiaries of a Mackenzie Gas project, is growing edgy over continuing delays in the regulatory process.

The Town of Norman Wells, with a shrinking population of less than 800, and its business community have reacted sharply to word that the Joint Review Panel, charged with evaluating the environmental and socio-economic impact of a Mackenzie pipeline, does not expect to deliver its final report until2009.

The town, along with the Norman Wells & District Chamber of Commerce, has rejected claims by the panel that the volume of material under review needs more time to sift through than originally anticipated.

A joint new release said: “Why the JRP wasn’t better prepared to manage the vast amount of evidence and produce a report on time is a mystery to us and — we would assume — potential developers.

“This type of bureaucracy is unacceptable and will only serve to harm — not help — the economy and people of the North.”

A succession of regulatory delays has been the major factor in stretching the projected start of gas deliveries from the Mackenzie Delta to 2014 from 2010.

Norman Wells in the central Northwest Territories is the service hub of the pioneering oilfield north of the 60th parallel in Canada, which was discovered almost a century ago by Imperial Oil, although initial production did not start until the 1940s.

Volumes on the existing Enbridge pipeline out of Norman Wells has been in decline, with hopes for its revival pinned on the Mackenzie project and successful exploration in the Central Mackenzie Valley.

The Mackenzie proposal includes a gas line from the Delta to southern markets and a separate liquids pipeline feeding into the Enbridge system.


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