Mackenzie pipeline's numbers questioned
Last Updated: Monday, February 8, 2010 | 12:02 PM MT
CBC News
If approved, The 1,200-kilometre pipeline would run through the Mackenzie Valley from Inuvik, N.W.T., to northern Alberta, where it would connect with southern markets. (CBC)A Yellowknife social justice group wants proponents of the proposed Mackenzie Valley pipeline to produce updated information on whether the project makes economic sense.
In a notice of motion filed with the National Energy Board on Thursday, Alternatives North asked pipeline proponents to update their assessment of the natural gas market and the economic feasibility of the pipeline.
The federal energy regulator has given the consortium of pipeline proponents, led by Imperial Oil, until Wednesday at noon MT to respond.
Alternatives North says the pipeline consortium has been using numbers from three years ago.
"Since the project was initially filed in 2004 and updated in 2007, there have been significant changes in the gas market in North America," reads the group's notice, signed by co-chair Suzette Montreuil.
The market changes Montreuil cited include changes in gas supply and demand, the discovery of "significant quantities" of shale gas, and a competing proposal for a natural gas pipeline in Alaska.
Alternatives North's notice comes as the National Energy Board is set to determine whether to approve the proposed 1,200-kilometre pipeline through the Northwest Territories' Mackenzie Valley.
"The proponents really need to talk about what the cost of their project, is in terms of labour, the construction costs, the material that goes into building the pipeline," Kevin O'Reilly, a member of Alternatives North, told CBC News.
"Only they have that sort of information and insight, so they need to bring that to bear, and their view on how this is going to fit into the overall supply and demand for natural gas in Canada and North America."
Last month, the Conference Board of Canada predicted that even with regulatory approval, the Mackenzie Valley pipeline will not go ahead until at least 2017, as gas prices and production continue to decline.
"With gas prices right now hovering between $5 and $6, it's obviously not [a] significantly high enough price to go up there and invest $15 [billion] or $16 billion in a gas pipeline," said Todd Crawford, an economist with the Conference Board.
"But over time, we do see natural gas prices rising to a sufficiently high enough level where an investment like that could be profitable."
