NWT
The National Energy Board has granted an extension to Imperial Oil Resources Ventures Ltd. for its multi-billion dollar Mackenzie Gas Project.

A map showing the components of Imperial Oil Resources Ventures Ltd.'s Mackenzie Gas Project. - map courtesy of the National Energy Board

The project would develop three natural gas fields in and around the Mackenzie Delta, a processing plant and the transportation of the natural gas extracted south to Alberta through 1,842-kilometres of pipelines. The National Energy Board (NEB) had approved the project with 270 conditions in 2010, including a clause stating its approval would expire at the end of 2015 unless construction had started. The Globe and Mail reported in 2013 the project could cost more than $20 billion, up from a 2007 estimate of $16 billion.

Construction of the long-delayed project has not started. The price of natural gas - an important factor in moving the plan forward - has fallen since it was conceived as U.S. and Canadian shale gas reserves have been developed.

Imperial applied last August to extend the sunset point seven years. On June 2, the NEB granted Imperial's request, moving the deadline to Dec. 31, 2022.

"The board finds that the project is still in the public interest and that the original conditions attached to the approvals will require the project to be designed, constructed and operated in a manner which would be safe and protect people and the environment," the board wrote in a letter to Imperial released last week.

The NEB also varied its original approval to now require an annual public report describing steps taken to advance the project, including the timing of the construction.

The extension decision by the board must still be approved by the federal government.

Lisa Schmidt, a spokesperson for Imperial, stated in an e-mail shortly after the decision that the company welcomes the news and that it remains hopeful it can develop the gas reserves in the future.

"This extension will allow time to assess whether changes in the North American natural gas market, including the potential impact of numerous proposed (liquid natural gas) projects, will result in improved economics for development of Mackenzie Delta gas reserves," she stated.

The letter noted there were 14 submissions to the board commenting on the extension from the GNWT, aboriginal groups, the public and two chambers of commerce. Alternatives North, Ecology North, Greg McMeekin and World Wildlife Federation submissions opposed the extension.

Alternatives North, a social justice advocacy group based in Yellowknife, had penned a letter to the NEB urging the rejection of the extension.

The letter signed by Ben McDonald states that the board cannot assume decisions made five years ago will still be in the public interest in seven years. The group reissued the letter last week after the NEB announced the decision.

"I think it's a good move," Premier Bob McLeod, also minister of Industry, Tourism and Investment, told reporters after the announcement. "This is something that the people of the Northwest Territories have wanted for a long time . We all expect (the price of natural gas) will come back before 2022."

The GNWT's budget last week cut its Mackenzie Valley Petroleum Planning Office in Hay River to save $665,000. Funding may need to be restored if the company moves ahead with the plan, McLeod said.

"The projection is that nothing is going to happen for some time. When that happens, our approach is that we'll refund as we have done in the past. It's our third go-around now."

The project was originally proposed in the 1970s resulting in an inquiry by Justice Thomas Berger.

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