Minister resists Mackenzie Valley foolishness

The unequivocal declaration by Canada’s Minister of Indian and Northern Affairs that the government’s not interested in buying into a pipeline project to bring natural gas from the far north to the Alberta oilsands is excellent news. From CBC and the Canadian Press:

“No, it’s erroneous, that is not happening,” [Jim] Prentice told CBC News on Friday.

“It’s not an option that I am looking at as minister. Plan A or Plan B or any plan has to be a free enterprise-based model for the Mackenzie Valley pipeline.”

As I’ve previously blogged, the Mackenzie Valley pipeline is a monstrous white elephant in its current form, having doubled in projected price to $16.2 billion over the last decade or so. Much of the point of the thing would be to bring natural gas from the Mackenzie Delta on the Arctic Ocean to the Alberta oilsands to fuel the huge plants that use steam to separate oil from sand.

With the cost so high, lead partner Imperial Oil says the pipeline doesn’t make economic sense and won’t be built anytime soon.

Aboriginal Pipeline Group, the entity with an ownership stake whose purpose is to funnel profits from the pipeline to northern Canadian aboriginal groups in exchange for letting the line cross their various territories, wants the project to go ahead anyway

Aboriginal Pipeline Group is aiming at getting a one-third stake in the pipeline. [Group chairman Fred] Carmichael said having Ottawa as a partner in the project would be an investment in northern infrastructure.

“They’ve been doing it all over the country. I don’t know why they can’t do it in the North,” he said Friday.

“You don’t win battles by laying down and giving up and I’ll continue to push someone like Imperial or anyone else. If they don’t think they want to be in this, they should do the honourable thing and get the heck out … open it up for others to step in here.”

Carmichael said his group would welcome “equity participation by the federal government because we know this project is economically challenged.”

It is not clear how a federal ownership stake in the pipeline would make it profitable, or what’s stopping anyone with a better idea from launching their own pipeline project.

So let’s review. We have a project whose chief purpose is to supply more fossil fuels to power a fossil-fuel extraction industry that’s Canada’s fastest-growing source of greenhouse gases (I’m talking about the extracting and processing in themselves, let alone what’s done with the oilsands oil afterward). It cannot, in the opinion of enormous profit-making companies, be executed profitably. Therefore the government should step in and buy some of it.

Good for Prentice for standing up to this gibberish.


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