On Thursday, Canada’s National Energy Board will make a decision on whether to green-light the Mackenzie Valley Pipeline. Plans for the pipeline have been up in the air since the 1970s, alternately buoyed and sunk for many reasons, one of them being changes in natural gas prices. It is estimated that natural gas futures should be around $6 for the project to break even – a price that won’t be reached again until 2016, based on current market predictions. Industry backers for the MVP, led by a consortium of four oil companies (Imperial Oil, ConocoPhillips, Shell, and ExxonMobil) and one group representing aboriginal peoples (the Aboriginal Pipeline Group), have expressed the need for federal funding if the CAN $16 billion project is given the go-ahead.
Potential challenges to the MVP are also coming from the competing Alaska Pipeline Project. Backed by TransCanada, the APP has already been promised CAN $500 billion in funding from the state of Alaska if it receives approval, though the project is farther behind in the regulatory process. Plus, the subsidy is a drop in the bucket compared to the APP’s $27 million price tag.
Questions exist about whether the region really needs or can afford to build two similar pipelines. While the MVP would bring 1.2 billion cubic feet (bcf) of natural gas south everyday, the Alaska Pipeline would carry an estimated 4.5 bcf daily – and it’s debatable whether all of that energy would really be used.
Beginning at 4:30 pm, the “Reasons for Decision” report will be available online at http://www.neb-one.gc.ca/clf-nsi/rthnb/pplctnsbfrthnb/mcknzgsprjct/rfd/rfd-eng.html.
“Arctic gas lines: adversaries or teammates?”, Alaska Dispatch