Current Status - 2010

January 2010

NEB and GoC Processes
The Mackenzie Gas Project’s JRP Recommended Measures Response Committee evaluated and responded to the JRP’s 176 recommendations. The committee submitted its written response to the NEB and to the Government of Canada on January 28.

February 2010

Alaska Highway Aboriginal Pipeline Coalition Workshop – Whitehorse, YT
The Alaska Highway Aboriginal Pipeline Coalition (AHAPC) is a non-profit and nonpolitical society based in Whitehorse and is comprised of seven Yukon First Nation governments that have a vested interest in the proposed Alaska Highway pipeline project. Bob Reid and OD Hansen attended their workshop in Whitehorse on February 11; entitled "Learning from the Past - Preparing for the Future". Bob and OD gave a presentation on APG, and which received many positive comments.

Dehcho First Nations Winter Leadership Meeting – Fort Simpson, NT
APG was asked to speak at the Dehcho First Nations Winter Leadership Meeting in Fort Simpson. Bob Reid and OD Hansen gave an update on APG and reviewed the next steps necessary for Dehcho First Nations to join APG. The presentation was well received with a number of interested participants asking very pertinent questions, and requests for APG to return to the Dehcho to provide communities with more information on APG.

Inuvik Chamber of Commerce 2010 Annual General Meeting – Inuvik, NT
Bob Reid and OD Hansen gave an update on APG at the Inuvik Chamber of
Commerce 2010 Annual General Meeting on February 17. The meeting was attended by about 30 businesspersons/residents. Interest was high regarding the status of the MGP and APG.

March 2010

APG Operational Funding Cut
APG was advised by the Federal Government on March 19 that their portion of our operational funding will be significantly reduced for the fiscal year commencing April 1, 2010. This is part of an overall budget reduction for the Mackenzie Gas Project Office in Ottawa, who are cutting all staff except those required to support post-JRP regulatory activities. The direct impact to APG is a reduced operating budget for the coming year.

Economic Feasibility and Consultation Hearing
The Economic Feasibility and Consultation Hearing was held in Yellowknife on Monday,
March 29. The Hearing was to discuss updated evidence on Economic Feasibility filed by Imperial Oil and updated Consultation evidence filed by the Government of Canada (GOC). The updated Economic Feasibility evidence included a revised schedule showing construction starting in 2014 and an updated Natural Gas Market Demand/Supply study showing the need for Mackenzie Gas even with the increase in shale gas production in North America.

Northern Gas Project Secretariat closes its four NWT offices
All four offices of the Northern Gas Project Secretariat will be permanently closed at the end of April, 2010. Seven employees (five full-time and two part-time) will be affected by the closure of the secretariat's offices in Yellowknife, Inuvik, Norman Wells and Fort Simpson at the end of April. The secretariat has four employees in Yellowknife, and one each in Inuvik, Norman Wells and Fort Simpson. The secretariat supports the environmental and regulatory agencies that review the Mackenzie Gas Project, especially those agencies which must hold public hearings, according to information posted on the secretariat's website.

Consult to Modify Process on the Recommendations Identified in the JRP Report
The NEB issued a letter to the Chair of the JRP on Tuesday, March 9 stating that the NEB will proceed to final argument on 12 April 2010 and requested that the JRP provide any comments it may have on the NEB proposed modifications by 31 March 2010.
On Monday, March 29 JRP Chair Robert Hornal replied to the NEB stating that the JRP Panel “has concluded that its role is to provide overall comments directed at whether, in the Panel’s view, any modifications that are proposed to be made to the Panel’s recommendations would have the effect of nullifying or undermining the Panel’s overall conclusions with respect to the likely significance of the impacts of the Mackenzie
Gas Project and its contribution to sustainability. In the Panel’s view, it is not the Panel’s role to “pass judgment” on the drafting of measures that appear to be directed at implementing the Panel’s recommendations”. The letter went on to state; “The Panel understands that the Government of Canada will, pursuant to section 135 of the MVRMA, consult the Panel in the event the Government proposes to make any modifications or rejections to the Panel’s recommendations. The Panel may make further comments at that time”.
The Panel concludes that the NEB have not rejected any of the Panel’s recommendations that were directed to them, and that any proposed modifications are primarily for the purpose of “ensuring that their implementation conforms to established NEB protocols, procedures, operational requirements, and regulations”. As far as recommendations that the NEB deemed to be outside the scope of the MGP Application, the Panel notes that they do not consider this to be a rejection of their recommendations, and expects that the NEB will consider them in the context of future applications.

NEB Releases Draft Conditions to the Certificate
On March 9, the NEB released the draft conditions to a potential Certificate of Public Convenience and Necessity (CPCN).

2010 Dehcho Business Conference – Hay River, NT
During March 16-18 Bob Reid, OD Hansen and Viola Cli attended the Dehcho Business
Conference in Hay River, NT. Presentations on economic development and nation building were given by numerous speakers. An update on the MGP was given by Randy Ottenbreit as well as an update on Access and Benefits by Shane Parrish. Over-all the conference was positive; with everyone agreeing economic development was needed and welcomed in the Dehcho.

April 2010

Bruce Marsh, CEO of Imperial Oil was quoted in the Calgary Herald that fiscal framework discussions between the GOC and MGP proponents are taking a “time out” until after the NEB decision.

NEB Final Argument
The NEB Final Argument process began in Yellowknife on Monday, April 12, and concluded in Inuvik on Thursday, April 22. The hearings followed the usual process, with proponents arguing for and some interveners arguing against the Mackenzie Gas Project. In general there were six principal issues argued before the NEB:

  1. MGP and the public interest – whether the Project was in the best interest of the Canadian public,
  2. Need for all JRP recommendations to be implemented – whether the

MGP would cause significant adverse impacts (if not applied to future hypothetical projects),

  1. Sunset date for approvals – proponents argued for Dec. 31, 2016, while most other parties supported the NEB’s proposed date of Dec. 31, 2013,
  2. MVP & MGS toll and tariff issues – argument over the MGS design capacity, the MVP toll design, and the timing of NEB decision on MVP toll and tariff principles (APG cannot secure financing without NEB approval of principles),
  3. Dehcho issues – DFN stated MGP should not proceed prior to Dehcho final agreement and land use plan
  4. Drainage concerns at Niglintgak and Parsons Lake – argument whether these fields were draining adjacent lands (owned by other companies).

There were some disconcerting remarks from Dehcho First Nation Grand Chief
Gargan during the Yellowknife proceedings in regards to the Aboriginal Pipeline Group and its shareholders; the Inuvialuit, Gwich’in, and the Sahtu organizations. GTC President Richard Nerysoo and IRC Chairperson Nellie Cournoyea presented final argument in Inuvik on behalf of their respective organizations. APG Chairperson Fred Carmichael presented final argument on behalf of APG and APG’s legal council, Laurie Smith, presented APG’s rebuttal during the “bottom up” reply segment of the hearings. Final argument concluded with MGP’s Don Davies final remarks, and then NEB Panel Chairman Kenneth Vollman closed the proceedings, stating “You can expect to receive our decision with reasons in September 2010.”

GOC Response to the JRP Report proponents
The GOC Response to the JRP Report is due to be issued in July 2010. As part of the process, the GOC is required to consult with the aboriginal groups on any modifications the Government may have on the recommendations that may affect aboriginal rights.

May 2010

GOC Response to the JRP Report proponents
The Governments of Canada and the Northwest Territories issued their Interim Response to the JRP Report to aboriginal groups on May 14. The Governments propose:
• To accept or accept the intent of 87 of the 115 recommendations within their respective jurisdiction,
• To take no position on the 60 recommendations directed to the NEB nor the 1 recommendation directed to the Government of Alberta and,
• To not accept the remaining 28 recommendations within their jurisdiction
(21 were determined to be outside the scope of the JRP’s mandate).
The Governments identified 58 responses that they deemed may adversely impact section 35 rights.

Start Your Engines: Transportation Logistics for Oil and Gas Development and Northern Industry – Hay River, NT
Bob Reid, OD Hansen, and Viola Cli attended the Start Your Engines conference in Hay River. There were a number of comments from delegates wondering when APG is shutting down. Bob gave a presentation on behalf of APG and assured everyone APG is alive and well, and that APG continues to work towards the construction and operation of the Mackenzie Gas Project.

June 2010

GOC Response to the JRP Report Proponents
Consultation has concluded with a number of Aboriginal organizations, while consultation with other organizations is still in progress, or will start imminently. The expectation is that the GOC Response to the JRP Report could be issued in late July, or early August of 2010.

Meeting with Larry Persily, US Federal Coordinator for Alaska Natural Gas
Transportation Projects
On June 23rd APG met with Larry Persily in Inuvik, NT. Mr. Persily was appointed the Federal Coordinator for Alaska Natural Gas Transportation Projects by the Obama Administration earlier this year, replacing Drue Pearce. He is a former Alaskan journalist, and has previously worked in several capacities in the Alaskan State Government including the Office of the Governor of Alaska in Washington, D.C., assisting with oil and gas, Arctic, commerce, transportation and tax issues.

Mr. Persily’s responsibilities include facilitating the regulatory process for an Alaskan pipeline, and openly promoting the need for the pipeline and Federal support for the project. He emphasized that he considers the Mackenzie Pipeline complementary to the Alaska line - they are not competitors. He is familiar with APG’s role in the Mackenzie Gas Project, and is also up to date on the status of the MGP. US Federal support for the Alaskan line was discussed and he confirmed that their government has pledged a $20 billion loan guarantee. The US Senate is currently introducing legislation to increase this loan guarantee to $30 billion, plus inflation.

The Alaskan pipeline has been made a national priority to reduce America’s dependence on foreign oil.

July 2010

GOC Response to the JRP Report Proponents
Consultation has concluded with a number of Aboriginal organizations, while consultation with other organizations is still in progress. Some groups requested more time; therefore the GOC Response to the JRP Report could be delayed till late August of 2010. A NEB decision (and reasons for decision) is more likely in October 2010, rather than September 2010.

August 2010

GOC Response to the JRP Report
Proponents Review and Update
At the National Energy Board's (NEB) April 2010 final argument hearing in Inuvik, the chair of the NEB panel indicated it was their intention to issue a decision in September 2010. Before that decision, the Government of Canada (GOC) must issue its response to the Joint Review Panel's report. In turn, the GOC must first consult with both aboriginal groups and the Joint Review Panel (JRP). Consultations with aboriginal groups began in mid-May 2010 and ended in early August 2010 (3 weeks later than originally expected). The GOC then updated its interim report and sent it to the Joint Review Panel on August 13th, seeking a response by September 7th. This initiated a series of letters between the GOC and the JRP, summarized below:

i. August 13, 2010 – letter from MGP Assistant Deputy Minister (ADM) France Pégeot to JRP Chairman Hornel:

• Providing clarification of the Governments modifications to the JRP recommendations,

• Updating the JRP of the GOC and GNWT consultation with the affected aboriginal groups and,

• Requesting a response from the JRP (re: the consult to modify process) by September 7th.

ii. August 30, 2010 – letter from JRP Chairman Hornel to MGP ADM France
Pégeot:

• Declining to engage in a “consult to modify process” that is based on a confidential document,

• Stating that there is no requirement in the MVRMA or the CEAA that the “consult to modify” process or the “clarification process” be conducted in confidence.

iii. September 2, 2010 – letter (sent by email) from MGP ADM France Pégeot to
JRP Chairman Hornel:

• Referring to the agreement between government and the JRP regarding the consult to modify process,

• Stating the public hearing phase of the process is complete,

• Stating there are currently restrictions on the distribution of the Interim
Government Response document, and

• Still expect comments from the JRP on the interim response by September 7th.

iv. September 3, 2010 – letter from JRP Chairman Hornel to MGP ADM France
Pégeot:

• Denying any agreement exists between government and JRP regarding the consult to modify process (although acknowledging discussion),

• The September 7th deadline is not achievable, and

• Refusing to comment on the interim response document if it remains classified as confidential.

Creating Our Future Northern Leaders Forum
Bob Reid represented APG at this forum in Inuvik Tuesday, August 31. This forum was one of several sponsored by Premier Roland to garner input from various sectors on a vision for the future of the NWT. The Premier used six questions to frame the discussions:

1. What do you wish the NWT to look like 20 to 30 years from now?

2. How you do believe this vision of a future NWT can be achieved and what can you contribute to help make it happen?

3. What you do think of our unique system of consensus government? What ideas do you have to make this system of government more sustainable?

4. What legacy should the current generation leave to future generations in terms of finding the right balance between economic development and conservation?

5. What do we need to do today to ensure the economy of tomorrow generates jobs for Northerners in all our regions?

6. What do you consider to be the best – and worst – features of the NWT?
There were 11 delegates that represented different regions and various levels of various governments.

September 2010

NEB and GoC Processes – Consult To Modify: Next Steps
The Governments of Canada and the Northwest Territories and the Joint Review Panel have reached an agreement which will enable the consult to modify process to proceed in a timely manner.

The JRP will immediately begin reviewing the Interim Government Response and will make best efforts to provide their comments to Governments by October 4, 2010. The Government of Canada will post the JRP’s full comments on the Mackenzie Gas Project Office website (http://www.ec.gc.ca/bpgm-mgpo).

The Governments will carefully consider the comments and revise the Interim Government Response, where appropriate. As soon as the Final Government Response is approved by both the Governments of Canada and the Northwest
Territories, it will be made public on the Canadian Environmental Assessment Registry website.

We anticipate that the Final Government Response should be available by mid-
November, assuming there are no further glitches in the process. This would mean an NEB certificate could be available by mid-December.

Pembina Institute Northern Oil and Gas and the Environment Workshop
Tour of TransCanada Pipeline Control Center
Bob Reid and OD Hansen assisted in organizing and participating in a tour of the TransCanada Pipeline Control Center within the TransCanada building for a number of northern delegates. A Pipeline Construction video was shown along with a presentation on TransCanada’s Control Center. Many of the follow-up questions were directed to APG regarding pipeline construction techniques for the Mackenzie Valley Pipeline and Gas Gathering System.

The delegates represented the Mackenzie Valley Environmental Impact Review Board (5 members), the Inuvialuit Environmental Impact Screening Committee (3), the Canada/Inuvialuit Fisheries Joint Management Committee (1), Ducks Unlimited (4), Environment Canada (1), Sahtu Land and Water Board (1), GNWT (1), and Pembina Institute (2).

October 2010

APG Northern Communities Update Tour
After some re-scheduling, as requested by communities, the meetings went ahead on the following dates (attendance in brackets):

Delta Communities                                       Sahtu Communities
Oct 04 Ft. McPherson (12)                             Oct 18 Deline (7)
Oct 05 (AM) Tsiigehtchic (12)                        Oct 19 Tulita (47)
Oct 05 (PM) Inuvik (14)                                  Oct 20 Fort Good Hope (20)
Oct 06 Tuktoyaktuk (40)                                Oct 21 Norman Wells (8)
Oct 07 Aklavik (18)

The Mackenzie Gas Project accompanied APG at all these meetings and MGP updates were provided by Grace Blake, Gwich’in liaison, Wendy Smith, Inuvialuit liaison, and Shirley Harley, Sahtu Liaison. Attendance averaged around 10 -15 per community with a low of 7 in Deline (due to a raging early winter storm) to a high of 47 in Tulita, where we gave 2 presentations. The common questions throughout all the communities were; when is this pipeline going to be built? Why is it taking so long; what is causing the delay?

Our conclusion was that the northern communities are desperate for work and they see the Mackenzie Gas Project as the only sustainable project that will provide long-term benefits through contract work and employment, and yearly dividends through ownership in APG.

A comment that was made in all the communities was their appreciation to APG and MGP for coming to their communities to give them this update. Many asked for us to return once we had significant (good) news to bring.

November 2010

NEB and GoC Processes
The Final Government Response to the JRP’s report was released on November 15, 2010. The Federal Government and the Government of the NWT said they are willing to “accept” or “accept the intent” of 88 of the 115 JRP recommendations directed towards them. Of the 27 recommendations rejected by the governments, 20 were determined to be “outside the scope” of the JRP’s mandate.

On November 24 the National Energy Board released a letter stating “Intervenors may provide written comment on the Governments’ Response by noon Calgary time on December 01, 2010. The applicants for the Mackenzie Gas Project may provide reply comment by noon Calgary time on December 03, 2010.”

This NEB letter requesting intervener comments was a surprise to most, and may cause a further delay before a Decision and Reasons for Decision is handed down by the NEB.

APG T’licho Presentation
A presentation to the T’licho Investment Corporation Board was set up for Friday,
November 26 in Yellowknife, NT. Unfortunately the board members were unable to attend the presentation due to ongoing meetings in outlying communities. OD Hansen gave the presentation to eight T’licho executives that were available.

Meeting with Dehcho A&B Negotiating Team
Carl Chala met with the Dehcho Access & Benefits Negotiations Team on November 8 in Edmonton. In attendance were Chief Tim Lennie (Wrigley), Chief Roy Fabien (Hay River), Chief Jim Antoine (Fort Simpson), Chief Lloyd Chicot (Kakisa), Ria Letcher (Executive Director, DFN), and DFN negotiators Shane Parrish and Mel Benson. APG was requested to provide a presentation on the steps for Dehcho communities to join APG.

The meeting lasted about an hour and several questions were raised around; a) the timing of the project, b) when the Dehcho needed to elect to participate, c) gas markets and whether there still is a need for the MGP, and d) the requirement for a fiscal package from the Federal Government. The team has further meetings with Imperial in November and December to continue the A&B agreement negotiations.

December 2010

NEB and GoC Processes
Five Aboriginal organizations sent written comments to the NEB, along with four environmental groups. The aboriginal organizations that sent in written comments were:

The environmental groups that sent in written comments were:

On behalf of the Mackenzie Gas Project, Imperial Oil Resources Ventures Limited sent their response to the NEB on December 03, 2010 commenting on 12 of the JRP recommendations. In conclusion the letter stated:

“For all of the reasons outlined during Final Argument3, the Proponents submit that implementation of all 176 Joint Review Panel Recommendations is not required in order to ensure that there are no significant adverse effects resulting from the Mackenzie Gas Project. Moreover, the Governments’ of Canada and the Northwest Territories have concluded that implementation of the Governments’

Response meets the overall intent of the Joint Review Panel’s Report and its Recommendations, and have concluded that implementing the Governments’ Response would eliminate or mitigate any significant adverse impacts of the Mackenzie Gas Project.4 Therefore, the Proponents submit that the Board should find that the Mackenzie Gas Project will make a net positive contribution to sustainability and will not result in any significant adverse impacts. Approval of the Mackenzie Gas Project will be in the public interest of all Canadians.”

On Tuesday, December 14 the NEB released a letter informing of the release of the Reasons for Decision GH-1-2004 with respect to the Mackenzie Gas Project on Thursday, 16 December 2010 at 2:30 p.m. Mountain Standard Time.

December 16, 2010
National Energy Board Approves Mackenzie Gas Project

CALGARY - The National Energy Board (NEB) today approved the applications for the construction and operation of the Mackenzie Gas Project through Canada's North.

The Mackenzie Gas Project includes the 1,196-kilometre long Mackenzie Valley Pipeline, three onshore natural gas fields, a 457-kilometre pipeline to carry natural gas liquids from Inuvik, NWT to an existing oil pipeline at Norman Wells, NWT and other related facilities. The Mackenzie Valley Pipeline would run from the Beaufort Sea to northwestern Alberta, and is designed to carry up to 34.3 million cubic metres (1.2 billion cubic feet) of natural gas per day. This is enough to supply about two-thirds of the six million Canadian households that used natural gas to heat their homes in 2009.

Imperial's latest estimate, released in 2007, pegged costs for the project at $16 billion.

The NEB attached 264 conditions to the project's approval in areas such as engineering, safety and environmental protection. Conditions are requirements which must be met. If the project is built, the National Energy Board will monitor the project throughout its lifespan to see to it that the operators meet these conditions.

"Our goal was to encourage public participation and listen to the people so they could help us determine the public interest of the project," the panel said in their Reasons for Decision.

"We looked at how the project would contribute to sustainability in the way it would affect the people, the land where they live, and the economy, now and in the future. We recognize that the Mackenzie Gas Project would have much larger and more far-reaching effects than previous developments in the North."

The NEB began hearing evidence in January 2006 on five applications filed by Imperial Oil Resources Ventures Limited, the Mackenzie Valley Aboriginal Pipeline Limited Partnership, Imperial Oil Resources Limited, ConocoPhillips Canada (North) Limited, Shell Canada Limited and ExxonMobil Canada Properties. Final argument was completed in April, 2010.

In total, the Board held hearing sessions over 58 days in 15 communities throughout the Northwest Territories and Northern Alberta. More than 200 individuals and organizations participated in the NEB's hearing.
If this decision is approved by Governor in Council (Federal Cabinet), the NEB will then issue the appropriate approvals, including a Certificate of Public Convenience and Necessity.

If the proponents decide to build the Mackenzie Gas Project, they would also be required to obtain various permits and authorizations from other boards and government agencies before construction could commence.
The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest.