Ruling threatens to stall pipeline
Mackenzie plan lacks aboriginal input, says judge
Shaun Polczer
Calgary Herald
Saturday, November 11, 2006
The proposed Mackenzie Valley pipeline faces additional regulatory delays after a Federal Court judge ruled Friday that the government failed to consult with the Dene Tha' First Nation on the project.
The court also ruled that the joint review panel into the project's social and environmental impacts cannot file a report to the National Energy Board until another hearing into remedies for the Dene Tha' is concluded.
"It's a good judgment for us," Chief James Ahnassay said in a telephone interview. "We're very happy. We hope the federal government will now give us meaningful participation."
The Dene Tha' consist of about 2,500 members living in three main communities in northwest Alberta with traditional lands extending into the southern Northwest Territories and northeast British Columbia.
Despite its recognized Treaty 8 rights, the federal government opted to exclude them from the consultation process that was developed in 2000, the court said.
"The Dene Tha' had a constitutional right to be, at the very least, informed of the decisions being made and provided with the opportunity to have its opinions heard and seriously considered by those with decision making authority. The Dene Tha' were never given this opportunity," Judge Michael Phalen wrote in his decision.
Lead proponent Imperial Oil Ltd. -- along with Shell Canada Ltd. and ConocoPhillips -- are proposing a 1,200-kilometre line to link discoveries on the Mackenzie Delta into the main Alberta gathering system.
Imperial spokesman Pius Rolheiser said the impact of Friday's decision remains unclear.
"The short answer is that we need time to read it and understand it," he said. "It's important to remember that we don't manage the regulatory process, we are subject to it."
The Mackenzie project has been plagued by delays and disputes over benefits and land access almost since the start.
The joint review panel report was supposed to be complete by December, but was delayed until spring.
Also, a comprehensive cost review that was to be completed before the end of the year has been pushed back until early 2007, Imperial's Rolheiser confirmed.
Industry observers believe the final price tag for the project, currently pegged at $7.5 billion, could climb past $10 billion.
Meanwhile, Alaska is looking to jump-start a competing pipeline from Prudhoe Bay after the results of midterm elections this week.
The state's new governor-elect, Sarah Palin, has scheduled a series of meetings to revisit the Alaska project starting on Dec. 5, the day after she is sworn into office.
The prospect of renewed competition in Alaska and further regulatory delays at home has analysts worried about the future of Mackenzie gas.
"Uncertainty is not a good thing," said Martin Molyneaux, FirstEnergy Capital Corp.'s managing research director. "Every time we turn around, this thing gets pushed out."
Molyneaux noted that Imperial and its parent, ExxonMobil, have their plates full with the Kearl oilsands hearings and other megaprojects in Canada and around the world.
"There is a point where you throw up your hands and put this thing back in the cupboard for another 20 years . . . that's what happened last time."
Imperial shares fell 69 cents in Toronto on Friday, to $42.11.
spolczer@theherald.canwest.com
© The Calgary Herald 2006 |
