The proposed Mackenzie Gas Project cleared another major hurdle last week after receiving the final go-ahead from both the federal cabinet and the National Energy Board.

“I think this is another great day for the Northwest Territories,” McLeod said in the legislative assembly on March 10. “The next big step is to get the two parties, the federal government and the pipeline proponents, together to negotiate and finalize a fiscal framework.”
McLeod said the proponents, which include Imperial Oil, the Aboriginal Pipeline Group, Exxon Mobil Canada, Shell Canada Limited, and ConocoPhillips Canada, have asked the federal government for a fiscal framework that includes loan guarantees, and not subsidies.
APG Chair Fred Carmichael said last week’s announcement was a “big step forward” for the project.
“We’re certainly happy and excited about that,” he said Monday. “It’s good for the north and good for Canada.”
Imperial Oil spokesperson Pius Rolheiser said the decision marks the final major regulatory approval for necessary for the project to proceed.
“This is the conclusion of the formal regulatory process,” he said. “It is a significant milestone for the project.”
Carmichael said it’s still too early to say when the discussions between the proponents and federal government will resume.
“We’ve all been preparing for this, trying to make sure as soon as we had a favourable decision we’d move forward in those discussions,” he said. “The project will be trying to reengage with the government just as soon as possible.”
Rolheiser said a tremendous amount of work remains before the proponents make a final decision on whether to proceed with the pipeline, including finalizing a fiscal framework with the federal government, securing the nearly 6,000 permits required for the project, restaffing the project team, and resuming engineering work.
“All of that work will take place between now and the end of 2013,” he said.
According to government estimates, the “basin opening” project will contribute$67.5 billion to the NWT economy and a further $86 billion to the Canadian economy.

The proponents of the Mackenzie Gas Project reiterated the need for federal government support of the 1,200-kilometer natural gas pipeline amid a CBC report the $16.2-billion project could gain cabinet approval as early as this week.
“Should we obtain this approval, which would make regulatory approval of the Mackenzie Gas Project final … then our intent would be to reengage with the federal government in discussions on a fiscal framework for the project,” Imperial Oil spokesperson Pius Rolheiser said on Monday.

Rolheiser said the proponents and the federal government paused talks in early 2010 while they waited for the outcome of the regulatory process.
In December, the National Energy Board (NEB) approved the project with a list of 264 conditions. Cabinet approval would be the “final step” in the process, Rolheiser said.
“From our perspective, our intent has been from the outset, and remains, to work with the government to develop an agreement on a fiscal framework that makes sense for the project, and that provides an appropriate balance of risk and benefit – both for the proponents and for the federal government,” he continued. “We’ve been clear from the outset – we aren’t looking for a subsidy. That’s not what this is about.”
NWT Industry Minister Bob McLeod said federal support is integral and could come in the form of loan guarantees.
“We certainly feel in order for the proponents to make a decision, the two parties – the federal government and the proponents – have to negotiate a fiscal framework,” he said.
Aboriginal Pipeline Group chairman Fred Carmichael said the proponents have no indication when the project might get cabinet approval.
“We don’t know when,” he said. “All we know is (it’ll be) sometime by late January, or early February.”

Bob McLeod, Northwest Territories Minister of Industry, Tourism and Investment, said the government’s support of the proposed Mackenzie Gas Project remains high, even as optimism in the project has waned elsewhere.

McLeod was in Calgary, Alberta last week for an oil and gas reception and met
with a number of industry players during the two-day visit, including Imperial Oil, Aboriginal Pipeline Group, BP, Conoco Phillips and MGM Energy. With the Joint Review Panel’s oft-delayed report on the proposed pipeline expected by the end of the month, McLeod said he used the trip to reinforce the importance of the project not only to the Northwest Territories, southern provinces like Alberta, Canada and the United States.
“We see the pipeline project as being in the national interests,” he told The Hub on Thursday. “It’s a priority for our government – we’re still a strong supporter and we also wanted it to reinforce the need for the construction to go ahead. And what some of the consequences might be if it didn’t.”
During an evening reception on Dec. 15, McLeod used the Town of Inuvik as an example in a speech.
“It is a town where equipment is idle and silent. It is a town where hotel rooms are empty and coffee shops are closing. It is a town where too many men and women sit idle, too, waiting for something to happen, waiting for the boom to come,” he said during the speech. “The boom was supposed to come with the construction of the Mackenzie Gas Project. But now, on the eve of a new year, optimism in the MGP has waned … but I am here to tell you that while some may have lost their faith in the project, the Government of the Northwest Territories has not.”
McLeod said the future of the proposed pipeline rests on support from the federal government. Jim Prentice, the federal minister responsible for the pipeline, said in January that the government was willing to provide the pipeline proponents with financial support for infrastructure and other associated costs.
During a recent meeting with ministers in Ottawa, McLeod said he was questioned whether the MGP was even needed, due to the shale gas deposits discovered in the United States. McLeod responded by reminding the ministers of the “chorus of northern support” behind the MGP.
With the Government of the United States providing $60 billion in “unequivocal” support for proposed gas pipelines in Alaska, McLeod said the federal government could help level the playing field by stepping up with support for the $16.2-billion MGP, which would create 30,000 person-years of employment, while adding $67.5 billion to the NWT’s GDP, and $1.6 in new tax revenue.
“They think it’s a very good project, they like the jobs and they like the benefits to Alaska and the United States. And, most importantly, they like the long-term supply of natural gas,” McLeod stated. “We said, ‘wouldn’t it be nice if Canada and the Prime Minister’s Office would provide a similar level of unequivocal support.’”
With the JRP report set to be released on Dec. 31, McLeod said the next critical deadline is April, when the pipeline’s proponents would be expected to appear for any “b” hearings into the project. Prentice had originally proposed to have the financial support deal in place before the JRP released their report – something that is now unlikely, McLeod said.
“He’s preoccupied with Copenhagen so it’s very unlikely he’ll have the fiscal arrangements in place before Dec. 31,” McLeod said of Prentice. “In an ideal world we were truly and hopefully would have the fiscal arrangements in place by now.”
In October, a report in The National Post suggested the federal government was set to yank its support for the pipeline. McLeod said he hopes the government is not letting the project slip away.
“I guess they want to make sure that they’ll spend the money in the right places, where they see it,” he said. “We think they should be spending it to make sure the Mackenzie Pipeline goes ahead.”