For the North, from the North : Enbridge perspectives on a Mackenzie Valley gas pipeline

The increase in natural gas demand and strong gas prices are the main driving forces behind northern pipeline development. While Western Canada can supply much of the demand growth to key markets in the Pacific Northwest, California, Eastern Canada, as well as the Eastern and Midwestern U.S. it is not expected to supply all the growth. Producers are acquiring land in the Northwest Territories (NWT) and planning to increase drilling activity. In February 2000, Imperial, Gulf, Shell and Mobil entered into an agreement to study the feasibility of developing Mackenzie Delta gas, a study in which Enbridge Inc. participated. Enbridge is the major transporter of Canadian crude oil and liquids and they have a growing involvement in natural gas transmission. They also own and operate the largest gas distribution company in Canada. They have extensive Northern experience and already operate two pipelines in the NWT. The proposed 2,100 km, 36 inch pipeline will transport 1.2 bcf/d of natural gas increasing to 1.7 bcf/d with more compression. Its estimated cost is $4.2 billion. Some of the economic risks of such a project include the need for large amounts of equity, timing of market development, competing sources of gas, and stability of gas prices. The multitude of regulatory processes are also complex. Clarity is needed in many jurisdictional processes. Support of indigenous people is also crucial. A historic January 25, 2000 meeting of Aboriginal leaders of the Northwest Territories resulted in a declaration of support for a Mackenzie Valley pipeline. Protecting the permafrost is also a priority when constructing and operating a pipeline in the North. It is unlikely that Mackenzie Delta gas will flow before 7 years .13 figs