Panel issues Mackenzie natural gas report

AP News
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Posted: Dec 30, 2009 7:56 PM

A nearly decade-long quest to build a multibillion-dollar natural gas pipeline in Canada's north has cleared a major hurdle with the release of a years-overdue regulatory report Wednesday.

The government-appointed panel examining the environmental and socio-economic effects of the 16.2 billion Canadian dollar ($15.4 billion) Mackenzie Gas Project said it will "provide the foundation for a sustainable northern future" if the panel's 176 recommendations are adopted.

The Mackenzie Gas Project is a 750-mile proposed pipeline through the Mackenzie Valley of Canada's Northwest Territories that would connect a dozen potential northern onshore gas fields with North American markets.

The Joint Review Panel's recommendations include calls for government funding to protect environmentally sensitive areas.

Canada's National Energy Board will begin its own hearings in April, taking the panel's recommendations into consideration when it decides whether to let construction go ahead.

Imperial Oil Ltd. is the lead partner in the Mackenzie project, which also includes Imperial's U.S. parent Exxon Mobil Corp., ConocoPhillips and Royal Dutch Shell PLC.

Natural gas shipper TransCanada Corp. would feed the Mackenzie gas into its Alberta pipeline network.

When the seven-member joint review panel began its work in 2004, it was expected the process would take about 10 months. The panel gathered information from 558 presenters during public hearings in 26 centers and northern communities.

The Joint Review Panel's report will be combined with a National Energy Board's report on the project's engineering and economics. The package will go before Canada's federal cabinet, which can accept or reject its recommendations.

Doubts, however, are gathering around the increasingly expensive pipeline as new U.S. natural gas sources threaten markets for Mackenzie gas and depress its price. And although some feel the review panel's report will revive momentum behind the project, the final decision is still a ways off.