Canada gas megaproject gets nod but future cloudy

Thu Dec 16, 2010 6:10pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Jeffrey Jones and Scott Haggett

CALGARY, Alberta (Reuters) - Canada's energy regulator approved plans on Thursday for a C$16.2 billion Arctic gas pipeline, but the project faces growing economic uncertainty as natural gas prices languish.

The National Energy Board, in a ruling released after six years of hearings and deliberations, said the Mackenzie Gas Project is in the public interest, provided the major oil companies that are backing it meet more than 200 technical, environmental and socioeconomic conditions.

"We examined the benefits the project can bring. We found that they are large and varied," the board said. "We also looked at the negative impacts. We found that they can be minimized and are acceptable."

The Mackenzie Pipeline project, first envisioned in the 1970s, is led by Imperial Oil Ltd. Its partners are Royal Dutch Shell, ConocoPhillips, Exxon Mobil Corp and Aboriginal Pipeline Group.

The pipeline would carry as much as 1.2 billion cubic feet of gas a day to the Alberta border from the Mackenzie Delta on the coast of the Arctic Beaufort Sea.

The federal government still needs to sign off on the plan, and Environment Minister John Baird said the cabinet will examine the NEB's ruling in the new year. He did not say when he expected to issue a decision.

The Northwest Territories governments and many residents of northern Canada have been anxiously awaiting the decision on the massive development, which they say has the potential to create jobs and spinoff businesses, especially in regions where traditional subsistence livelihoods are vanishing.

Some environmental groups have opposed the project, arguing it would disturb pristine wilderness. And the Deh Cho, a native group whose lands make up a third of the pipeline route, have yet to support the development.   Continued...