A Canadian joint review panel has endorsed the Mackenzie Valley Pipeline, which has been in the works for years — yet there are still many obstacles in its way. Estimated to cost $16.2-billion, the pipeline is supposed to transport natural gas from the Beaufort Sea to northern Alberta. But not all of Canada supports the project. The 1220-km pipeline would cross over aboriginal land, so the project’s backers – a consortium which consists of Imperial Oil, The Aboriginal Pipeline Group, ConocoPhillips Canada, Shell Canada and ExxonMobil Canada, must receive the support of the indigenous people. Many environmental groups like the Sierra Club and WWF also oppose the pipeline. Other federal agencies must also approve the pipeline before it can go ahead.
Then, there is the problem of financing. The pipeline was conceived of as being entirely privately financed, yet with its hefty price tag, it’s looking like federal aid may be necessary. The oil consortium is emphasizing the economic benefits which the project would bring to Canada’s North. But right now, the price of natural gas is low, while the pipeline’s capital costs would be high, making the project look unfavorable.
Whether or not the pipeline can get built soon also depends on the success of TransCanada and Exxon Mobil’s nearby Alaska pipeline, on which construction is scheduled to begin in June 10. If this project is finished as hoped in 2018, then the need for the MVP could be mitigated, delaying it even further – and perhaps turning the MVP into nothing but a pipe dream.
News Links
“Canadian Board Approves Western Gas Pipeline,” New York Times
“Mackenzie Pipeline saga to drag on despite Joint Review Panel approval,” The Canadian Press
“Federal help urged to help save pipeline,” Edmonton Sun