Industry upset over JRP deadline
Guy Quenneville
Northern News Services
Published Monday, December 15, 2008
SOMBA K'E/YELLOWKNIFE - Reaction to news that the Joint Review Panel will not have its report on the embattled Mackenzie Gas Project ready until December 2009 has been uniformly negative and in some cases incredulous.
"You've got to be kidding" was the initial reaction of Ann Marie Tout, president of the NWT Chamber of Commerce.
Randy Ottenbreit, Imperial Oil's development executive for the Mackenzie Gas Project, speaks about the embattled pipeline at the Inuvik Petroleum Show in June. Project proponents and oil and gas industry leaders were unanimously disappointed with news that the Joint Review Panel will not have its report ready until December 2009.
"When the JRP was created in 2004, the timeline was 10 months to hold the hearings and file its final report," said Tout.
The JRP's community consultation hearings finished last December, at which point the panel - charged with assessing the environmental and socio-economic impact of the proposed $16.2-million pipeline project - announced it would have a report ready "sometime" in 2009.
The December 2009 deadline came on the heels of the Inuvialuit Regional Corporation (IRC) and the Mackenzie Valley Environmental Impact Review Board (MVEIRB) - two of the bodies that helped create the panel - calling on the panel to announce when the report would be ready.
"We're looking at five years now if in fact they manage to hit this most recent target," said Tout.
The JRP was originally convened in 2003.
"People are extremely frustrated by the latest and in fact all of the delays," said Tout. "The business community in the NWT, which includes many aboriginal-owned firms desperate to build wealth for their beneficiaries, has invested millions of dollars preparing for the pipeline. If it doesn't happen, life in the territories will change dramatically and not in a good way."
That thought was echoed by Danny Gaudet, owner of Deline Construction. Gaudet's company transported the rig and the camp for Petro-Canada's Kwijika rig to Deline last winter, but Petro has announced it will not return to the area unless infrastructure is put in place to move the resource to market.
"I know a lot of companies that have been ramping up and getting ready for it," said Gaudet. "But with another delay, you can't invest in things."
Michael Scott, spokesperson for Devon Energy, said the delays to the pipeline have put the company's Northern exploration plans at a standstill. Devon drilled six onshore wells in the Mackenzie Delta between 2001 and 2005 and drilled its last offshore well in the winter of 2005-2006.
"What happened is, after (we) drilled our last well - at which time we could already see that the decision-making behind the pipeline was just progressing slowly - we felt it was the right thing to stop exploring in that part of the world," said Scott. "Devon had better investment opportunities elsewhere with more manageable timelines.
"Based on what we're seeing and how this regulatory process is dragging out, indeed that was the right thing to do."
The delays faced by the Mackenzie Gas Project under line the importance of the federal government moving forward on the McCrank report, commissioned by Indian and Northern Affairs Canada, on how to streamline the Northern regulatory process, said Lou Covello, president of the NWT & Nunavut Chamber of Mines.
Despite its bold recommendation to eliminate or reduce the role of the NWT's regional regulatory boards, the McCrank report is "the most relevant thing that's happened with respect to the regulatory delays," said Covello.
"It was specifically designed to address this sort of problem."
"We're very sensitive to the feelings that must be experienced in the Delta right now," said Mike Vaydik, executive director of the chamber. "Contractors are facing layoffs and a downturn in business.
The oil business has really fled the Delta not only because of the international market conditions but also because of the difficulty of getting permits on lead time."
There is a silver lining to be found in the JRP's latest pronouncement, said Gary Bunio, chief operating officer with MGM Energy, which recently decided to drill three wells instead of four this winter north of Inuvik partly due to the delays facing the pipeline and the world economic slowdown.
"This is actually the first time that the JRP has said that they are going to finish," said Bunio.
"No matter how incredulous we may be about the date, they have at least come to grips with the notion that they have to produce something."
Not that Bunio wasn't initially upset with the latest delay.
"I really hope that the three parties - the IRC, the federal government and the MVEIRB - do take the time to sit down with the JRP and figure a way positively to get out of this mess," he said.
http://nnsl.com/northern-news-services/stories/papers/dec15_08jr.html
