Elusive Pipe Dreams

Article excerpt

During his five-day tour of northern territories this week, Prime Minister Stephen Harper heard a great deal about the need for roads, seaports and pipelines to bring the region's minerals to buyers in southern Canada and overseas. Physical remoteness from industrial markets is one of Northern Canada's most obvious economic handicaps, and it's a tough one to deal with.

Mr. Harper is a big believer in the importance of the Arctic for Canada. He visits the region every year and has promised a deep-water port at Nanisivik, a research station in the Arctic islands and a satellite communications service -- all of which still await fulfilment. Plans for enhanced military presence in the North fell foul of the government's cost-cutting drive.

The Mackenzie Valley Gas Pipeline project of Imperial Oil and others is one of Canada's greatest unbuilt infrastructure projects. After years of investigation and litigation over aboriginal title and further years of environmental review, the project won National Energy Board approval in 2010. It is not being built, however, because U.S. oil and gas exploration companies have found ways of extracting great volumes of natural gas that were previously not recoverable. In the present glutted natural-gas market and low natural-gas prices, the expense of the Mackenzie Valley line is difficult to justify.

Northerners eager to see the Mackenzie Valley line built believe it was killed by too much environmental review. The Harper government agreed and changed the National Energy Board Act to allow itself to set limits to environmental review and speed up approval. The three-member panel studying Enbridge Inc.'s proposed Northern Gateway gas pipeline from Alberta to the Pacific Coast is now operating under the government's tighter timeline.

But it is just as reasonable to conclude that the Mackenzie Valley line is a technically good project that just has to wait until somebody needs the gas badly enough to pay for construction of the line. …