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Joint Review Panel Gives Go-Ahead to Mackenzie Gas Project in Canada

After a four-year review process, the Joint Review Panel for the Mackenzie Gas Project (MGP) has concluded that, subject to the full implementation of its recommendations, the adverse impacts of the MGP, and the associated Northwest Alberta Facilities, would not likely be significant and that the MGP and its facilities would likely make a positive contribution towards sustainability. The MGP would be the largest construction project to date in Canada’s Northwest Territories (NWT).

The parties proposing to develop the Mackenzie Gas Project are:

  • Imperial Oil Resources Limited (IORL);
  • Imperial Oil Resources Ventures Limited (IORVL);
  • Shell Canada Limited as managing partner of Shell Canada Energy;
  • ConocoPhillips Canada (North) Limited and ConocoPhillips Northern Partnership;
  • ExxonMobil Canada Properties; and
  • Mackenzie Valley Aboriginal Pipeline Limited Partnership, generally referred to as the Aboriginal Pipeline Group (APG).

The MGP consists of five proposed developments:

  • Three natural gas fields, referred to as the “Anchor Fields,” located in the Mackenzie Delta;

  • the Mackenzie Gathering System, consisting of gathering pipelines from the Anchor Fields to a processing facility near Inuvik and a natural gas liquids (NGLs) pipeline from Inuvik to connect with the existing Norman Wells oil pipeline at Norman Wells; and

  • the Mackenzie Valley Pipeline (MVP), a 30-inch pipeline with three compressor stations and a heater station, to carry processed natural gas from Inuvik approximately 1,196 km to a proposed interconnection 10 meters south of the Northwest Territories–Alberta border with new facilities to be constructed in Alberta.

The MGP and the Northwest Alberta Facilities, as applied for, would have the capacity to transport 1.2 Bcf/d of natural gas, as well as the NGLs produced in association with that gas. Production from the Anchor Fields, however, is expected to be approximately 0.83 Bcf/d.

Further developments to produce additional volumes of gas up to the capacity of the MVP at 1.2 Bcf/d had not been proposed at the close of the Panel’s record. Those developments would require regulatory review and approvals in the future.

Mgp1
Mgp2
Overview maps of the MGP area. Click to enlarge.

The MVP would be designed to allow for its future expansion, beyond its initial capacity, by the addition of up to 11 compressor stations, to a maximum capacity of 1.8 Bcf/d. There is currently no proposal to expand the MVP to this capacity. Such expansion would require the development of further gas fields within an accessible distance of the MVP; no specific developments for this purpose have been identified or proposed at this point.

There have been a number of environmental issues raised around the project, not the least of which is the nature of the pipeline:

The construction and operation of a buried non-ambient temperature gas pipeline in a permafrost environment has no direct precedent in North America. It could thaw frozen ground and freeze unfrozen ground, destabilizing terrain and disrupting water courses. The Project thus poses distinctive engineering and environmental challenges. In view of the limited experience of constructing and operating such a pipeline in a northern environment, the Panel considers that there is a need for conservatism in Project design and construction methods, caution in impacts prediction and mitigation, and well-designed and effectively implemented monitoring programs.

—JRP report

Concerns were also expressed about the end use of the gas: first, that it would be used as a fuel source in Alberta oil sands developments, and secondly that it would increase global outputs of GHGs and contribute to climate change.

The Panel is not persuaded that gas from the MGP would in fact be used in the exploitation of the oil sands. Further, the Panel sees no viable way by which specific end uses could be assigned to or excluded from Project gas. The Panel acknowledges the Proponents’ concern that, until a national climate change policy and regulatory framework are in place, they would not be participating on a level playing field if the Project were to have requirements placed upon it that would be significantly different from those placed on other energy projects serving similar markets.

—JRP report

Therefore, the Panel has not recommended that the Project be required to offset its GHG emissions at this stage, although the Panel has recommended that national standards be developed. The Panel also concludes that mandating carbon neutrality and intervening in the market to specify preferred end uses for natural gas cannot be resolved on a project-by-project basis through the environmental assessment process. Rather, these matters must be addressed by governments through comprehensive climate change strategies.

The JRP has recommended that Canada’s climate change policies include provisions for optimizing the benefits of using natural gas as a transition fuel to developing a sustainable low-carbon economy.

At the same time, the Panel observes that in the absence of global controls on energy consumption, if the Project were not to proceed, it is likely that the energy production foregone would be replaced by other energy sources to meet global demand. There is no assurance that these other energy sources would not be more GHG-intensive than Mackenzie gas. Consequently there is no assurance that, without the Project, there would be any measurable abatement of the global level of GHGs, or any amelioration of climate change effects in the Mackenzie Valley and Beaufort Delta regions.

For the NWT and the rest of Canada, the Project represents both an opportunity and a challenge to achieve sustainability objectives associated with resource use efficiency and to enhance any future positive trends of emissions reductions directed at achieving international and national targets. Depending on how emissions from the Project are managed over its life, the Project also has the potential to erode and delay progress on future emissions reductions.

—JRP report

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Comments

HarveyD

Most of this new NG is required to triple+ tar sands operation in the next 10/12 years.

It could be positive if a major portion was used to replace polluting coal fired power stations. It will not happen because tar sands operators will control the NG market and can afford to pay more than e-power plants.

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