The Mackenzie Valley pipeline project was supposed to move natural gas out of the Northwest Territories and bring prosperity to the northern aboriginal groups that supported it.
More than 10 years after it was first proposed, the $16-billion, 1,200-kilometre pipeline is still little more than an idea.
The Aboriginal Pipeline Group, which represents four northern aboriginal groups and their one-third stake in the project, says it’s frustrated oil companies have not worked harder to build the pipeline.
“If industry partners were serious they would have found a way to make it work,” said Fred Carmichael, chairman of the Aboriginal Pipeline Group.
The pipeline would bring “badly needed” employment to the Northwest Territories, he said.
In January 2012, representatives from the Aboriginal Pipeline Group and Imperial Oil, the lead oil company on the project, met with Aboriginal Affairs and Northern Development to discuss financial support from the federal government.
According to documents obtained under the Access to Information Act, the aboriginal group was “stunned” by the lengthy approval process for the Mackenzie Valley pipeline and “panicked” about the tight timeline to build it.
At that time, the Mackenzie Valley partners were already two years into their five-year certificate, which expires in December 2015, from the National Energy Board to build a pipeline from the Mackenzie Delta in the Northwest Territories to northwest Alberta, with no federal funding or construction to show for it.
The Mackenzie group was offered financial support from the government, but not the loan guarantee they wanted.
Carmichael said the partners turned down the federal money because they couldn’t agree to the conditions attached to it.
Aboriginal Affairs and Northern Development declined to comment for this story.
Carmichael said the Aboriginal Pipeline Group is eager to start construction before the end of 2015, but he expects that no progress will be made until two or three years from now.
He said oil companies sit on land until it makes the most financial sense for them to develop it.
“They take it when they can make the most money off of it,” Carmichael said. “The resources on our lands they use at their will.”
Declining natural gas prices and rising construction costs led to Imperial Oil’s decision to delay construction of the Mackenzie Valley pipeline, said Pius Rolheiser, a spokesperson for the company.
“There was a pretty fundamental shift in North American supply and demand for natural gas, largely due to the emergence of shale gas,” he said.
Imperial Oil submitted its application for the Mackenzie Valley pipeline to the National Energy Board in October 2004. The project was not approved until December 2010 after six years of review by multiple branches of government.
Carmichael said it normally takes the federal agency 18 months to two years to approve a project.
Sarah Kylie, a National Energy Board spokeswoman, said in an interview that the involvement of multiple levels of government, and parties in the Northwest Territories including aboriginal groups, was what made the process so lengthy and complicated.
The Aboriginal Pipeline Group is not an oil company. It is reliant on Imperial Oil, Shell, ExxonMobil, and ConocoPhillips, the other partners on the Mackenzie Valley project, to provide the expertise and resources to build it.
Frustrated by the Aboriginal Pipeline Group’s seemingly powerless position in the Mackenzie Valley project, Carmichael said he wants to approach more aboriginal groups to start their own oil company so they won’t have to rely on southern industry in the future.
“We’ve got to somehow build a stronger, trusting relationship between industry, aboriginals and the government,” Carmichael said. “The only way to do that is we need to become partners in the industry.”
Document for ATIP story
You must be logged in to DocumentCloud and have access to David McKie’s Research Methods to view the private documents for ATIP requests and correspondence. Please view them here.
What is the information?
This document is a series of presentation slides and meeting notes between Aboriginal Affairs and Northern Development, the Aboriginal Pipeline Group and Imperial Oil in regards to the Mackenzie Valley pipeline project. Much of the material is boiler plate content and information that is so redacted, the context is missing. However, on page 34 and 36, there are handwritten notes that allude to comments made by an Aboriginal Affairs policy advisor suggesting that the Aboriginal Pipeline Group is frustrated and overwhelmed by the process involved to get the pipeline approved.
From which department and level of government did you obtain these pages?
This document package was received under a previously completed ATIP request from the department of Aboriginal Affairs and Northern Development.
Why was this information helpful?
I used these notes as a jumping off point to find out how the Aboriginal Pipeline Group felt about the project and why, after 10 years of discussion, construction on it hadn’t even begun. This information acted as a hint as to what kind of questions I should be asking sources about the project.