Pipeline review panel told to block oilsands from using Mackenzie natural gas

By: BOB WEBER
Canadian Press
26-Feb-2007

EDMONTON (CP) - Environmentalists want Alberta's booming and greenhouse-gas-spewing oilsands blocked from using natural gas flowing through a proposed $7-billion pipeline from the Mackenzie delta.

"We have to interfere in the market," Stephen Hazell, director of the Sierra Club of Canada, said Monday as a panel reviewing the proposal's environmental effects took its hearings to Edmonton. "The government has got to get involved and start to ensure that relatively clean natural gas has got to be used in a way that helps Canada reduce its greenhouse gas emissions."

A coalition of environmental groups suggested in a submission to the panel that the impacts of the project and the oilsands should be considered together, especially as Canada struggles with a climate change strategy.

"The point is to look at the uses of gas, how they have an impact on the global atmosphere and what are the opportunities for maximizing a greenhouse gas reduction," said Julia Langer of the World Wildlife Fund, one of five groups at a news conference held before the hearings opened to the public.

"We're saying open it (the review) up a little bit wider than just the pipeline. Look at the possible end uses of the gas and assess them in the context of climate change."

Environmentalists have long claimed that a good portion of the natural gas that would fill the 1,200-kilometre pipeline proposed for the Mackenzie Valley in the Northwest Territories is destined for Alberta's oilsands. On Monday, Hazell pointed to a map by TransCanada Pipelines (TSX:TCA.PR.X) showing a long-planned spur line from the end of the Mackenzie line into the Fort McMurray area.

Low-carbon gas is burned at the oilsands to liquefy underground bitumen deposits so they can be pumped to the surface and turned into high-carbon oil, a process many compare to turning gold into lead.

Unfettered access to Mackenzie gas will only encourage the growth of what is already Canada's most rapidly increasing source of emissions, Hazell said.

The groups, which also included the Pembina Institute, Sierra Legal Defence Fund and the U.S.-based Natural Resources Defense Council, all say Mackenzie natural gas should instead be used for projects that reduce Canada's greenhouse emissions. One example would be using gas rather than coal to fire electricity plants.

"There's an opportunity for this pipeline to be a green pipeline," said Hazell.

The government should regulate how Mackenzie gas is used by controlling who can buy contracts for it out of the pipeline, he added.

"It's the obligation of the government to restrict contracting so that uses that are Kyoto-friendly should receive a contractual preference, perhaps mandated by law."

Telling producers who they can sell to would be a huge interference in the marketplace, said Pius Rolheiser, spokesman for Imperial Oil (TSX:IMO), the project's main proponent.

"That would certainly be an unprecedented manoeuvre," he said.

Although Rolheiser acknowledged the oilsands are likely to be good customers for Mackenzie gas, he dismissed any suggestion the two projects are linked. Both the oilsands and the pipeline would be viable even if the other didn't exist, he said.

"The only link between the two projects is that they happen to be taking place at the same time."

Rolheiser suggested the environmental groups are using the pipeline hearings to take a crack at the oilsands.

"This continuation is more about their concerns about oilsands projects than the (pipeline)."

Langer acknowledged that emphasizing the pipeline's climate change impact is at least in part an attempt to capitalize on growing public concern.

"It is a bit of a new world order and global warming was never on people's lips or headlines years ago when people were starting to draw their pipeline maps."

However, she pointed out the Edmonton portion of the hearings was always intended to consider the end uses for Mackenzie gas.