SOMBA K'E/YELLOWKNIFE - The GNWT's minister of industry, tourism and investment travelled to Calgary last week to again prod the federal government to show fiscal support for the $16.2 billion Mackenzie Gas Project (MGP).

Bob McLeod, minister of tourism, industry and investment, seen here with Premier Floyd Roland (left), visited with proponents of the Mackenzie Gas Project in Calgary last week, again calling on the federal government to show its financial support for the $16.2 billion pipeline. - NNSL file photo

Minister Bob McLeod was joined by Kam Lake MLA David Ramsay for the trip last Monday and Tuesday. The ministers met with BP Canada, the Aboriginal Pipeline Group, Imperial Oil, TransCanada Pipelines, the Canadian Association of Petroleum Producers, ConocoPhillips Canada and junior exploration company MGM Energy.

It wasn't McLeod's first trip to push the pipeline. In June, McLeod visited Washington, D.C. to meet U.S. congressmen, senators, energy officials and oil and gas company representatives to make sure demand for MGP gas was still ripe within the U.S., given the United States government's promise of loan guarantees to the Alaska Pipeline Project. It was hoped the visit would stir the Harper government to announce its intentions for the long-delayed Mackenzie line.

On Monday, McLeod's speech during a gala hosted by the Aboriginal Pipeline Group reflected a growing anxiety about the project.

Two months ago, the National Post, citing unnamed sources, claimed a financial assistance package proposed for the pipeline was rejected by federal cabinet, causing many to wonder whether the Government of Canada's support for the project has waned in the wake of doubts about the project's economics and competition from recent shale gas discoveries in both the United States and Canada.

"It is a town where equipment is idle and silent," said McLeod of Inuvik. "It is a town where hotel rooms are empty and coffee shops are closing. It is a town where too many men and women sit idle, too, waiting for something to happen, waiting for the boom to come.

"That boom was supposed to come with the construction of the Mackenzie Gas Project. But now, on the eve of a new year, optimism in the MGP has waned. Where once the project filled residents of Inuvik and the NWT with optimism, it now fills them with uncertainty."

"I think his speech was on the money," said Denny Rodgers, mayor of Inuvik. "You only need look around Inuvik to see that there's a lot of people with a lot of investment in infrastructure for this project ... We've had one company here (Northwind Industries) that's had to reduce its workforce down from 140 to 30."

McLeod went on to say that, "while some may have lost faith in the project, the Government of the Northwest Territories has not," reiterating, during a media teleconference on Tuesday, the need for federal fiscal support.

Citing President Barack Obama's support for the Alaska Pipeline Project, McLeod said, "Wouldn't it be nice if the Prime Minister's office would provide the same unequivocal support for the Mackenzie pipeline?

"When we went to Washington (and) we made a big issue of the pipeline ... (Minister of Environment Jim Prentice) came out and said he was going to have the fiscal arrangements in place by the time the Joint Review Panel (JRP) releases their report," said McLeod.

The Joint Review Panel will have its report ready on Dec. 31, according to McLeod, though the Northern Gas Project Secretariat could not confirm that date.

"In my estimation, it's only two weeks away. Mr. Prentice is tied up in Copenhagen, so I don't expect that he'll have that (by Dec. 31)," he said.

"If we can have (support) by the middle of January, in time for the federal budget, that would be ideal."

"I echo his thoughts," said Rodgers. "I think both the territorial and federal government, quite frankly, need to get off their ass and get behind this project a little more."

Asked to characterize the mood among pipeline proponents, McLeod said, "I think that they're still very optimistic. They feel their project is in the national interest."

Gary Bunio, chief operating officer for MGM, met with McLeod following the teleconference.

"He asked us questions about the economics of the project," said Bunio. "You know, 'Do you think things hang together the way you put it together?' We said, 'Yeah. We still think it's a valid project.'

"A lot of people talk about, 'There's so much shale gas; do you need the natural gas?' ... Mackenzie gas continues to be competitive with the full-cycle cost of shale gas, so we continue to believe the pipeline will be built."

If that happens, don't expect an immediate flurry of activity among oil and gas exploration companies in the Beaufort Delta; the logistics don't make that possible, said Bunio.

"Here's how it works in our business: to drill in the (Mackenzie) Delta, you need to start planning and filing regulatory documents literally in January. So to drill in (the winter of 2011), I need to file regulatory applications in January 2010."

Last winter, while drilling three wells 150-kilometres northeast of Inuvik, MGM employed approximately 80 people from the Mackenzie Delta region.

Provided the report is released this month, the National Energy Board will hold the final hearing on the pipeline in April. After consulting federal cabinet and several departments, the board could make its final call on the project in September.