Bob McLeod, Premier, NWT, Canada, LNG, Arctic Gas, British Columbia, Mackenzie Valley Pipeline, Photo by Dave HarbourGlobe and Mail by Brent Jang.  Northwest Territories Premier Bob McLeod (NGP Photo) says the key to reviving dormant plans for the Mackenzie Valley pipeline will be to transport natural gas from the Arctic into British Columbia instead of Alberta.  Private-sector proponents of the Mackenzie line consider the NWT project to be currently uneconomic, based on market conditions of plentiful gas supplies in North America.

Arctic Gas Leadership

by

Dave Harbour

We have much respect for the 12th Premier of the Northwest Territories, Bob McLeod, and for his dedicated leadership of a huge, 440,000 square mile area that is about 2/3 the size of Alaska.  

While we have itemized Alaska's myriad conflicts with its federal bureaucracy, the NWT has had its own federal challenges, too.

Like premiers preceding him, McLeod has fought to transfer control over natural resources from Ottawa to Yellowknife (i.e. devolution).  He has governed a great land with fewer than 50 thousand citizens and worked to develop a responsible, resource-based economic powerhouse in the Arctic.    

…and, he tenaciously pursues the 45+ year-old Arctic gas dream of moving Mackenzie Delta gas to market.  

Simultaneously, Governor Parnell pursues a similar Arctic gas dream.

Most of the industry players in the Mackenzie Delta are Alaska North Slope producers/explorers as well.  TransCanada is another party both projects have in common.

Once, it made more economic sense to move Alaskan and Canadian Arctic gas to market in the same pipeline.  First, there was the Arctic Gas Pipeline route across the top of the Arctic National Wildlife Range (i.e. now a 'refuge'); then came the Alaska Highway route.

Labor, Environmental, and Canadian Aboriginal forces worked together to create obstacles for those project over the last four decades–in addition the brutal economic challenges posed by weak gas prices a generation ago to the shale phenomenon today.

We are sure that behind closed doors, industry and government policy makers in both the US and Canada would agree that the most efficient movement of Arctic gas would still occur through a joint pipeline.  After all, the cheapest pipeline produces the greatest net profit to producers and the greatest volume of royalties and taxes to government.  

Today, shale gas has cut off the concept of a Mackenzie Valley pipeline to the Central US and Canada.

So now, Premier McLeod is hoping Canadian Arctic gas can find its way to British Columbia as Alaska's Governor and producers are hoping economics and markets will support the movement of Alaska gas to Valdez.

Both the Canadian and Alaskan Arctic gas projects would be competing with each other for big but limited Asian markets.

Today, one cannot help ask: "Why not move Mackenzie Gas over ANWR in a safe, environmentally acceptable, buried gas pipeline to Prudhoe Bay?"

The two gas streams could flow to Valdez and the economies of scale would benefit producers and governments and citizens in both areas.

We are sure there is an answer to our question of, "Why not?"

The answer is, "Don't be naive.  That may be more logical but you've got restricted rights of way that would likely take acts of both Congress and Parliament.  Besides, we're already committed to planning for separate projects."

We agree that the political realities make the most logical solution to freeing Arctic gas unlikely.

We would also observe that through great leadership,  great obstacles are overcome.

It would be a shame if Alaskans and Canadians were deprived of Arctic gas exports for another generation because two separate projects were just slightly short of economic feasibility when a joint projects' economies of scale could have produced prosperity for hundreds of thousands of citizens in both countries.

And so the Arctic Gas saga continues….