Mackenzie Project: "Must Do" - Denali Open Season Opens Today - Hofmeister On CNBC Today

Last Week We Urged Alaska Readers To Participate in Tomorrow's Meeting With Chancellor Fran Ulmer, Now Serving on the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

Please Do.

Financial Post by Diane Francis.  "MACKENZIE A 'MUST DO'".  After more than a generation of unnecessary review, the supporters of the Mackenzie Valley Gas Pipeline anticipate that the National Energy Board will approve the project this fall.  Then the politics begin. Ottawa must be heavily involved if it is ever to be built, because the $16.2-billion line must be backstopped with loan guarantees by Canadian taxpayers. This is a challenge considering the fallout from the BP blowout and concern about Arctic oil and gas exploration and production.  But the Mackenzie line is long overdue and it is important that taxpayers and leaders alike understand the benefits and discount objections that are rooted in misinformation.  ...  Nellie Cournoyer (NGP Photo), former premier of the Northwest Territories and chairwoman/CEO of the $300-million Inuvialuit Regional Corp. (which will invest in the line), said the federal government has mishandled matters for long enough. "It's just got to do it. We have been pawns in a game that's gone on too long," she said in an interview. "The federal government has the power to do it and should."  (More background from CBC)

Comment:  

Nellie Cournoyer--along with Fred Carmichael (NGP Photo) of the Gwich'in--are great leaders of their time and deserve support for their Mackenzie gas pipeline commitment via the Aboriginal Pipeline Group.  

Perhaps the "Must Do" mantra in their attitude and in Diane Francis' above editorial can begin to pervade Canadian decision making affecting the Mackenzie gas pipeline.  Public support for reasonable action by Parliament and the Cabinet at the end of the National Energy Board process this fall could unjam the log dam of delay.  If so, a Canadian "Must Do" approach could distinguish itself from Alaska's "Must Have" gas pipeline legislative mentality which has resulted for nearly a decade in, "Cannot Do Big Gas Pipeline Projects".

We've seen long, expensive and delayed gas pipeline processes in both countries.  Those processes are now complicated with the plentiful and well dispersed sources of shale gas and with climate change and local gas distribution politics.  Could that complex combination end up killing one or both projects?  If so, proponents must then turn to alternative ways of marketing Alaska North Slope and Canadian Mackenzie Delta natural gas--much as the Prudhoe Bay and Mackenzie Delta producers did in the late 1960s.  This will demand creative, non-biased, out-of-the box thinking in an atmosphere whereby, "all options are on the table" and cooperation is the keystone of conversations.  Meanwhile, we fervently hope that Alaska open seasons and Canadian regulatory processes that are now underway, all bear fruit.  -dh

 

It may not be realistic to urge government to simply, "get out of the way and let private enterprise build the projects for the lowest price consistent with prevailing law," as some of us would prefer.  And, we may never see a majority of government leaders dedicated to a constant and reasonable tax and regulatory foundation.  But there is one role in which government could very well serve the public interest.  Governments of both countries could simply support their own established leasing/tax/royalty/regulatory processes, moderate them when possible and defend project sponsors against inordinate delay fomented by extremist project opponents.  That would be a better role than bowing to the ever more hysterical cries of amateur and professional project opponents who, 'want their voices heard', as project timelines slip week by week and consumer costs move up with rising project costs.

Right now, a 'glass is half empty' syllogism seems to be controlling some energy decision-making in both countries: "If it is easier to kill development projects than to build them, and if opposing forces are growing while development forces weaken, the future prospect for big energy projects is diminished."  

We suspect and hope, however, that citizens in both countries are beginning to wake up.  Not developing North American resources exports money, jobs and environmental expertise elsewhere.  Alaska and Canada's Northern Territories must have resource development to protect a sustainable way of life.  There is a way to view that half-full glass through the lens of another syllogism.  "If political decisions determine energy policy, and if citizens elect and influence those who make political decisions, an aroused citizenry can affect energy policy."  

Citizens, arise!

dh)

Check here for more reports on John Hofmeister's CNBC interview today on his book, "Why We Hate the Oil Companies."

KTUU.  Tuesday's scheduled open season by Denali, a joint effort of ConocoPhillips and BP, comes as a competing project, led by TransCanada Corp., enters the last weeks of its open season.  Both projects propose similar lines to take gas from Alaska's North Slope to North American markets by large lines to Canada, with goals of being in service by around 2020. Denali estimates its project cost at $35 billion; TransCanada, $32 billion to $41 billion.    *    In an earlier release, Denali CEO Bud Fackrell (NGP Photo) said, "“We have invested over 670,000 man?hours and $140 million dollars to develop a high quality cost estimate and execution plan. I believe our technical work and our commercial offer provide the best opportunity for potential customers to evaluate the competitiveness of Alaska North Slope natural gas.”    *    The Republic.  Tuesday's scheduled open season by Denali, a joint effort of ConocoPhillips and BP, comes as a competing project, led by TransCanada Corp., enters the last weeks of its open season.