Anytime Diane Francis starts her turgid prose, if you instinctively stay on the opposite side of whatever she is saying then you will probably be fairly safe. In this case, the rule holds. Ever more so, however, is a slight admission contained within the article: "There's enough already to produce one billion cubic feet per day and the pipeline needs 1.3 billion a day," why, pray tell, does the pipeline "need" 1 billion point three cubic feet a day?
Ahh, but that's almost exactly the rate of energy growth demands coming from the tar pits. But even more sinister is the admission (certainly not for the first time) that the pipeline can not get the full 1.3 bcfd from the Beaufort Delta. What this means is simple but also nearly unspeakable. They will need to go to the Colville Hills region, one of the most important sites for the Sahtu Dene, and currently both undeveloped and one of the most tradtional communities on the planet. The reason this "plan" needs to be kept clear is that this plan would scuttle the APG involved nations, all of whom are unwilling to talk of developing this region, even referring to it as genocide.
So, instead of saying "we plan to get the rest of the needed gas from the Colville region", industry speaks their own language: "We need Ottawa to guarantee the life of the pipeline".
We should draw more attention to the clear indications that any such pipeline, in order to feed the tar sands, would not only send the gas directly there but have to utterly decimate the inner reaches of Kasho' Gotin'e.
Enough is enough. Kill the Mackenzie Gas Project
Why Ottawa must back pipeline
Time to put money where sovereignty mouth is
Diane Francis, Financial Post
Published: Thursday, September 20, 2007
In a world of predators and state-owned energy giants, Canada cannot just leave everything up to market forces.
Take Hibernia or Syncrude, for instance. Both projects would never have happened if they hadn't been backstopped by Ottawa and provincial governments.
Now these two operations represent about 20% of the country's oil production. More importantly, they opened up energy opportunities that led to more discoveries, plus world-class technologies.
Canadians were the first to produce oil from a fixed platform 200 miles offshore in water one mile deep where icebergs float by. Canadians were the first to commercially produce oil from gooey tarsands.
Now, Ottawa must fast-track the stalled Mackenzie Valley Pipeline project for similar reasons.
For starters, the line will allow the eventual production of an estimated 30 trillion cubic feet of natural gas north of the 70th parallel, equivalent to 10 years of Canadian consumption.
There is already up to 7 trillion cubic feet of proven reserves where the pipeline is going. The Mackenzie Delta is a triangular region, 75 miles from point to point.
"There's enough already to produce one billion cubic feet per day and the pipeline needs 1.3 billion a day," said Clay Riddell, chairman of MGM Energy Corp.
MGM owns most of the exploration lands close to the line and has one trillion cubic feet of proven reserves.
The holdup has been triggered the jitters on the part of some market players (Imperial Oil and its partners) plus 30 years of land-claims-negotiation incompetence between Ottawa and First Nations.
The holdout is the Del Cho nation, whose land claims must be included in order to build the line.
Ottawa should make it clear that it will financially backstop the line if certain conditions are met by the many interested parties, including the Del Cho.
I'm a fan of equity participation in return for backstopping or, at least, higher royalties after payout. In this case, backstopping probably will never cost anything.
"I don't think the government ever will have to dig into its wallet," said Mr. Riddell in an interview in his Calgary office.
Besides the enormous energy and economic benefit, the government should fast-track the line for two other compelling reasons: Washington and Moscow.
The U.S. government has promised price guarantees for Alaska, but that pipeline has been the subject of years' worth of squabbles over its route.
Costs would be exceptionally high--an estimated US$30-billion -- because of the difficulty, duration and distance involved.
The Mackenzie Valley pipeline, at an estimated cost of $11-billion, will eventually tap a similar trove of gas, which has been discovered offshore in shallow water in the Beaufort Sea.
Moving ahead with a Mackenzie pipeline is not only more sensible, but it will also stall the competing Alaska line.
Moscow is another issue. Ever since Russia's submarine stunt in the Arctic, it's obvious that Ottawa must establish sovereignty, beyond just subsidizing First Nations' traditional way of life and building a few ice roads.
By making the Mackenzie Valley pipeline a national priority, Canada will put its money and support where its sovereignty mouth is.
dfrancis@nationalpost.com
