Canada Order Brief Delay in Mackenzie Project Review

Mackenzie Delta Area, Northwest Territor
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Preliminary sparring has ended in a delay of about three months for regulatory review of Canada's arctic natural gas production and pipeline project. But authorities also have vowed to keep the process going at a brisk pace.

The joint review panel of agencies responsible for the environmental side of the C$7 billion (US$5.6 billion) Mackenzie Gas Project have directed sponsors to improve their filings. The National Energy Board suspended its schedule for its economic and engineering review.

But aboriginal and environmental interveners have again failed to halt the process or divert it into wide, deep political and legal issues that ultimately killed the first incarnation of the arctic project in the 1970s.

The NEB has set aside a deadline of April 27 for all sides to complete written filings and be ready for oral hearings. The target was dropped after interveners picked enough holes in the project's initial documentation to require the sponsors to assemble book-length volumes of additional information. In a letter to the gas consortium, panel chairman Robert Hornal warned that it was starting to look as if "there may be a divergence between the proponent's understanding of impact assessment review by a panel and the panel's expectations."

But Hornal also rejected a demand by 15 interveners for the panel to call an outright halt to the review, on grounds that analysis of a project's environmental impact statement can only proceed if the report is in complete conformity with the regulators' official terms of reference.

Hornal wrote, "While the panel is of the view that there are significant information gaps in the EIS, the panel has determined that there is sufficient information to proceed with the technical analysis." He ruled that "proceeding with this analysis, by way of initiating the information-request process and issuing other directions to the proponent is the most effective means of ensuring that the information gaps are addressed."

The panel, which is a combination of federal, provincial and aboriginal authorities, effectively agreed with the project sponsors that an environmental impact statement is a work in progress that is only complete after it evolves out of dialogue between industry and its critics.

The ruling upheld a tone of co-operation established by the dozen agencies involved in the case when the formal applications were filed last fall for a Mackenzie Delta gas production system and Mackenzie Valley pipeline.

The regulatory apparatus was established by an agreement reached among the various jurisdictions involved prior to the formal filings. A statement released by the regulatory panel last week repeated its interest in getting on with the case. The tone continued to sound a sharp contrast to the approach taken in the 1970s, when Canada added a royal commission on arctic industrialization onto the regulatory apparatus and the entire procedure ended in a moratorium on northern development after years of hearings.

"The environmental impact assessment and regulatory chairs' executive committee remains committed to a timely and transparent review of the proposed Mackenzie Gas Project." A formal regulatory cooperation plan, laid out in 2002 as the project advanced preliminary information packages through a preliminary consultation procedure, remains in force, the statement added.

The regulatory fuss prompted a fresh round of warnings from territorial and provincial energy ministers that long delays in the Mackenzie project could kill it by letting Alaska development plans move out ahead of it. But the delay is turning out to be measured in months rather than years.

Proposals for a revised schedule, distributed by the NEB, call for the written record to be complete and the case to be in shape to move on into the oral hearing stage by July 15.

The regulators' decision to keep the process moving followed a string of rulings against formal motions to divert the case into legal disputes over aboriginal rights, government jurisdiction and the scope of environmental regulation.

The Mackenzie project sponsors diplomatically refrained from comment on the decision and said only that they intend to comply with the procedures the regulators establish. But the environmental intervenors, led by the Canadian Arctic Resources Committee and the Sierra Club of Canada, were blunt about how they see the northern gas project review developing. "The decision sets an unfortunate and early precedent for cutting other process corners," the intervenors said in a last letter to the panel on the environmental review's preliminary round "for the record."

(Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.


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