Mackenzie Gas Pipeline

In speeches today in Washington, NWT Industry Minister Bob McLeod will tell U.S. lawmakers that getting Arctic gas reserves to market through the $16.2-billion Mackenzie Gas Pipeline project is the best way to reduce the environmental threat to the Arctic because it will enable gas-fired power stations to replace dirtier coal plants, thus mitigating global warming.

While Mr. McLeod will argue that getting Arctic gas to market is therefore key to protecting the habitat of species such as polar bears, he will also criticize recent U.S. legislation that categorizes polar bears as a threatened species.

The change won't protect the animals, but will substantially damage the NWT's economy by destroying its sport hunting industry, valued at $1.6-million a year, according to an advance copy of the speech.

"We want to highlight the importance of Arctic gas to North American energy security and supply," Mr. McLeod said in an interview.

"But we also want to tell [lawmakers] that we can manage our own natural resources. Our polar bear populations are well managed, and our Arctic coastal communities depend on revenues from sports hunting to survive."

Last month, the U.S. government placed polar bears under the protection of the Endangered Species Act, and environmental groups have said they will sue to prevent oil and gas drilling in Alaska in attempts to shield the newly protected species from any development impact.

While Canada hasn't listed the polar bear as threatened, officials say privately that they believe the environmental battle will carry into Canada as well, potentially threatening Imperial Oil's Mackenzie gas pipeline or oil drilling in the Beaufort Sea.

"Under the guise of protecting polar bears and seals - something that none of us in the North have asked for - [environmental] groups ... are seeking to shut down oil and gas exploration and development off the coasts of both Alaska and the Northwest Territories," Mr. McLeod will say in his speech today. "We as northerners are concerned about climate change. What we do not welcome are ill-founded efforts to address the issue."

While high costs have long kept the NWT's oil and gas reserves off limits to companies, sky-high oil and gas prices mean companies are increasingly looking to gain access to the region's vast potential resources. Earlier this month, BP PLC pledged to spend as much as $1.2-billion on searching for oil in three areas in the Beaufort Sea, although it's far from clear yet how oil or gas produced there would actually get to market.  Source