Why it hasn’t gotten anywhere
For two generations now, various governments and corporations have been trying to build a pipeline to bring natural gas from the Mackenzie River delta north of the Arctic Circle, south to consumers in the Canadian provinces, and potentially to the American Midwest as well.
It hasn’t gotten anywhere for a variety of reasons.
The original pipeline was quashed because neither the government nor business had bothered to consult the people who actually lived in the area — various bands of Canada’s First Nations. Then the price of gas and oil plummeted during the 1980s, and the pipeline languished for lack of interest.
Well, it’s a bold new century but that’s no excuse not to revive the last century’s bad ideas, so the Mackenzie Valley Pipeline is back. Except at quadruple the price. The price of oil and gas gear has skyrocketed since 2000, and labor costs in Alberta are rising too.
Interestingly, the First Nations issues have largely been resolved, with most of the local bands having been brought on board. The environmental issues linger, however. There’s the obvious issue of building a major industrial pipeline through sensitive wilderness, plus there’s a big question as to who’s using the gas for what purpose at the customer end.
One of the biggest single consumers of natural gas in Canada is the group of companies producing tar sands oil. So even though natural gas is a relatively clean fossil fuel, it’s certain to be used to make dirty (and far more CO2-intensive) oil.
Finally, there’s the issue of economics. There’s already talk of building a nuclear plant in Athabasca to replace the natural gas inputs, which could undercut a lot of the rationale for the pipeline in the first place. On top of that, any gas from the Mackenzie Valley destined for central Canada or the U.S. will have to compete with LNG imports in the future, and imports from Russia and Qatar may very well make the Mackenzie Delta uncompetitive, especially if costs keep increasing.