Mackenzie Valley Pipeline, Canada

The Mackenzie Valley Pipeline and Gas Project were a series of proposed fossil fuel extraction and development projects in the Canadian North. Although they didn't come to fruition, lasting impacts were left on communities living in the Mackenzie Valley.


Description

After large quantities of fossil fuels were discovered in Alaska in 1968, discussion started around beginning Canadian resource extraction and development in the North, particularly Yukon and the Northwest Territories. By 1970 Pierre Trudeau’s government had already created policies on pipeline development with plans of looking north, and Canadian Arctic Gas Pipeline Ltd. along with Foothills Pipe Lines Ltd. created plans to run natural gas either from Alaska, across the Yukon, through the Mackenzie Valley south to Alberta and the U.S., or directly from the Mackenzie Delta to Alberta. The former was an idyllic development project and at the time would have been the longest pipeline in the world and quite an engineering marvel given the difficulties of building on permafrost and other geographical barriers set out by the Canadian North. The potential economic benefits of the project as well as the ability to expand southern infrastructure and control into the Canadian North through resource development was an attractive proposal. However, the local Aboriginal communities of the Mackenzie Valley saw issue with the pipeline and potential changes to their physical, social, economic, and environmental well being, resulting in a number of conflicts, land claims, and land disputes among stakeholders. Concerns over construction, environmental degradation, safety, and human impacts led to the appointment of Justice Thomas Berger to conduct an inquiry on the proposed pipelines and the potential environmental, cultural, social, and economic impacts they may have on Canada’s north and its people. By 1977, Berger had visited over 35 communities in 3 years to hear from all the involved stakeholders in Canada’s North and document their concerns. The 1977 report concluded that further study was necessary, especially with regards to Indigenous land claims, and that the pipeline should not be constructed given the vulnerable northern environment in the proposed development area. Berger recommended a 10-year moratorium on construction to allow for more baseline studies on environment, people, wildlife, and to better understand the economic effects this development would have on the area. The moratorium was also intended to give the Aboriginal communities involved time to settle their land claim settlements, and by 2000 the Inuvialuit, Gwich’in, and Sahtu peoples had their claims taken care of. These communities now had an interest in the economic prosperity of the pipelines, and when the initial proposals fell through Imperial Oil, ConocoPhillips, ExxonMobil and the Aboriginal Pipeline Group (made up of local communities with pipeline interests) proposed the $16.2 billion Mackenzie Gas Project to carry 34.3 million cubic m of natural gas about 1,200 km from the Beaufort Sea to northern Alberta. The plan was submitted to the NEB in 2004 and approved in 2010 with December of 2015 set as the deadline to begin construction. Changing economics and the falling price of natural gas resulted in Imperial wanting to delay construction further to ensure the economic feasibility of the project (as natural gas prices were dropping). The extension was granted by the NEB to the dismay of environmentalists, but by the end of 2017 Imperial Oil decided the Mackenzie Gas Project was no longer profitable enough in the North American natural gas market with new forms of competition and new technologies to construct, and declared the end of the nearly 50 year deliberation and development process. 

Basic Data
NameMackenzie Valley Pipeline, Canada
CountryCanada
ProvinceNorthwest Territories
SiteMackenzie River and Valley
Accuracy of LocationHIGH local level
Source of Conflict
Type of Conflict (1st level)Fossil Fuels and Climate Justice/Energy
Type of Conflict (2nd level)Deforestation
Land acquisition conflicts
Oil and gas exploration and extraction
Climate change related conflicts (glaciers and small islands)
Oil and gas refining
Water access rights and entitlements
Pollution related to transport (spills, dust, emissions)
Transport infrastructure networks (roads, railways, hydroways, canals and pipelines)
Tourism facilities (ski resorts, hotels, marinas)
Specific CommoditiesCrude oil
Electricity
Natural Gas
Project Details and Actors
Project DetailsArctic Gas Pipeline Ltd. = $8 billion (2,400 mile pipeline from Prudhoe Bay to Lower 48)

Mackenzie Gas Project = initial cost said to be roughly $7.5 billion, today expected cost of $16 billion (1,196 km pipeline from Inuvik to northern Alberta)

Technical details: (Mackenzie Gas Project)

- 34.3 million cubic metres of natural gas per day

- 1,196 km pipeline, Beaufort Sea NWT to Northern Alberta, possibility to extend into United States (expand market)

- 3 natural gas fields in/near Mackenzie Delta, transport natural gas/gas liquids to southern markets (in pipelines buried 60-90 cm below the surface)

o Niglintgak

o Taglu

o Parsons Lake

- 28 natural gas wells drilled from 6 well pads, other production facilities

- Mackenzie Gathering System (190 km of pipelines take nat. gas from Inuvik for processing, 457 km 250 mm wide pipeline to carry nat. gas liquids from Inuvik facility to crude oil pipeline already at Norman Wells, 1196 km 750 mm Mackenzie Valley Pipeline to take nat. gas from Inuvik facility to NW Alberta)

- natural gas in pipeline would be 93% methane with small amounts of CO2, nitrogen, and hydrocarbons (ethane, propane)

- natural gas liquids pipeline from Inuvik to Norman Wells would carry hydrocarbon mixture similar to gasoline

- maximum capacity with 14 compressors = 49.8 million cubic metres/day of natural gas

TIMELINE:

1958 – Diefenbaker’s Northern Vision, Roads to Resources

1968 – Fossil fuel reserves found in Alaska, under Pierre Trudeau

1970s – Canadian Federal Government starts to look into northern development and resources extraction (Pipeline Proposals)

1977 – Berger Inquiry released, 10 year moratorium

1984 – Inuvialuit of NWT settle land claim

1992 – Gwich’in land claim settled

1993 – Sahtu Dene land claim settled (Deh Cho Dene claim never settled to date and group most opposed to development, coincidence?)

2000 – proposed Mackenzie Gas Project, birth of Aboriginal Pipeline Group (APG) who takes 1/3 of stake in pipeline (other companies were TransCanada PipeLines Ltd., Imperial, ExxonMobil, Shell, ConocoPhillips)

2002 – Design begins

2004 – application submitted to to NEB, joint review panel to conduct EIS alongside NEB hearings

2004 – Deh Cho First Nations object to panel appointments, sues to stop hearings, 11 months later Deh Cho take $15 million settlement

2004 – Companies file applications for pipeline, permits expected by Imperial = 1,000 but reality required 6,911

2005 – Engineering work halted due to ‘unrealistic aboriginal demands’, Imperial Oil senior-VP says may call off project, Liberal gov’t offers Aboriginal groups $500 million over 10 years to advance project, $40 million aboriginal training fund established

2007 – Fed gov’t not interested in ownership of pipeline, Federal court rules with Dene Tha FN they were not adequately consulted before pipeline termination on traditional land ($25 million), NWT industry minister says costly pipeline won’t get build without federal cash (infrastructure and loan guarantees for aboriginal investors)

2007 – Imperial and TransCanada present new financial plan

2009 – Fed gov’t pushes pipeline by offering financial assistance, CEAA’s review panel costs rose to $18 million from original $6.8 million budget in summer 2004, federal review found salaries alone soared to $11 million ($900,000+ for chairman)

2009 – ExxonMobil and TransCanada Corp. agree to $26 billion (USD) natural gas pipeline from Alaska to Alberta now, say Mackenzie Valley plan unchanged (doubtful), huge expenses and costs due to infrastructure set up to support pipeline and workers that still haven’t come

2010 – NEB approval of plan

2015 – December as deadline to begin construction, Imperial asks for extension to 2022

2016 – NEB decides proposal still in public interest and approved extension

2017 – Imperial Oil announces Mackenzie Gas Project cancelled, partnership dissolved (due to changes in N. American gas market and increased competition from new sources/fossil fuel extraction technologies)
Project Area (in hectares)180,000,000
Level of Investment (in USD)7,500,000,000
Type of PopulationSemi-urban
Potential Affected Population100-30,000,000
Start Date21/03/1974
End Date22/12/2017
Company Names or State EnterprisesExxonMobil Corporation (Exxon) from United States of America
Shell Canada Limited from Canada
Aboriginal Pipeline Group from Canada
TransCanada Corp. from Canada
Imperial Oil Ltd from Canada - Main Actor
ConocoPhillips Alaska from United States of America
Relevant government actorsNational Energy Board, Federal Liberal and Conservative Governments of Canada (1970s-2017), Canadian Environmental Assessment Agency, Joint Review Panel, Environmentla Impact Screening Committee for the Inuvialuit Settlement Region, Mackenzie Valley Environmental Review Impact Board, Bureau of Indian and Northern Affairs Canada.
International and Financial InstitutionsFederal Bank of Canada from Canada - Numerous requests and stages of development depended on federal funding.
National Energy Board (NEB) from Canada - Responsible for funding and environmental assessment.
Environmental justice organisations and other supportersDeh Cho Dene of Northwest Territories as primary organized group for environmental justice. Primarily the case was mobilized through Aboriginal involvement and not so much due to environmental organizations.
The Conflict and the Mobilization
Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginPREVENTIVE resistance (precautionary phase)
Groups MobilizingIndigenous groups or traditional communities
Industrial workers
Informal workers
Local government/political parties
Neighbours/citizens/communities
Ethnically/racially discriminated groups
Local scientists/professionals
Deh Cho Dene, Sahtu Dene, Inuvialuit of Northwest Territories, Gwich'in First Nation
Forms of MobilizationCommunity-based participative research (popular epidemiology studies, etc..)
Creation of alternative reports/knowledge
Development of a network/collective action
Development of alternative proposals
Lawsuits, court cases, judicial activism
Objections to the EIA
Official complaint letters and petitions
Shareholder/financial activism.
Arguments for the rights of mother nature
Appeals/recourse to economic valuation of the environment
Impacts
Environmental ImpactsPotential: Air pollution, Biodiversity loss (wildlife, agro-diversity), Fires, Global warming, Loss of landscape/aesthetic degradation, Noise pollution, Soil contamination, Oil spills, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Large-scale disturbance of hydro and geological systems, Reduced ecological / hydrological connectivity
Health ImpactsVisible: Mental problems including stress, depression and suicide, Violence related health impacts (homicides, rape, etc..) , Health problems related to alcoholism, prostitution
Potential: Accidents, Occupational disease and accidents, Deaths, Other environmental related diseases
Socio-economic ImpactsVisible: Increase in Corruption/Co-optation of different actors, Lack of work security, labour absenteeism, firings, unemployment, Loss of livelihood, Social problems (alcoholism, prostitution, etc..)
Potential: Displacement, Increase in violence and crime, Loss of traditional knowledge/practices/cultures, Specific impacts on women, Loss of landscape/sense of place
Outcome
Project StatusStopped
Pathways for conflict outcome / responseCompensation
Environmental improvements, rehabilitation/restoration of area
Court decision (undecided)
Technical solutions to improve resource supply/quality/distribution
Application of existing regulations
Moratoria
Project cancelled
Withdrawal of company/investment
Pipeline stopped by Imperial Oil and partners after being delayed and having constructed postponed so many times, despite government funding, social support, and community interest, the lack of economic profitability in the North American natural gas market now has made it inconvenient and costly to build, employ, and operate the proposed pipeline.
Development of AlternativesAlternatives discussed dealt with beginning the pipeline in either Alaska or Inuvik so as to minimize environmental impacts, to put a moratorium on the project to examine ecological and social effects before commencing construction, and alternative oil/energy supplies further south and their viability.
Do you consider this as a success?Not Sure
Why? Explain briefly.Not sure, environmental degradation was prevented (which also allows for continued subsistence living and the dismissal of the pipeline) but as far as social justice the complete removal of any promise of industry, especially after being prepared to have it incite a positive change for so long, may have had adverse effects on communities who are in need of economic support as well as social, cultural, and environmental equity.
Sources and Materials
Legislations

Northern Pipeline Agency. (2012). Pipeline History. Government of Canada.
[click to view]

Canadian Environmental Assessment Agency. (2013). Joint Review Panel for the Mackenzie Gas Project. Government of Canada.
[click to view]

Links

National Energy Board. (2015). Imperial Oil Resources Ventures Limited – Mackenzie Gas Project – GH-1-2004. Government of Canada.
[click to view]

First Nations & Indigenous Studies: The University of British Columbia. (2009). Berger Inquiry.
[click to view]

Gagnon, S. (2007, September 3). The Mackenzie Delta: the Mackenzie Gas Pipeline project. Canadian Geographic.
[click to view]

Snyder, J. (2016, December 15). Arrested Development: For the town of Inuvik, the Mackenzie Valley pipeline was the lifeline that never came. Financial Post.
[click to view]

Mackenzie Valley Pipeline Proposal. (2018). In Historica Canada Online.
[click to view]

Strong, W. (2017, December 28). Mackenzie Valley pipeline project officially one for the history books. CBCNews.
[click to view]

Unrau, J. (2009, December 30). The Mackenzie Valley saga. The Globe and Mail.
[click to view]

MacGregor, R. (2016, September 4). The story of the Mackenzie River: Disappointment, but also hope. The Globe and Mail.
[click to view]

Piper, L. & Marsh, J. H. (2016). Mackenzie River. The Canadian Encyclopedia.
[click to view]

Other Documents

1977 Berger Inquiry: Northern Frontier, Northern Homeland The original and complete first volume of the findings of the Berger Inquiry. Written by Justice Thomas R. Berger, it includes the detailed records of his years of study in the Canadian North and his consultation with 35 communities before his final recommendation of a ten year moratorium which changed the development landscape of the Canadian North.
[click to view]

Mackenzie River at Fort Good Hope Photo by T. K. Tomlinson
[click to view]

The Mackenzie Valley
[click to view]

Map of the proposed Mackenzie Valley Pipeline during the late 1970s, alongside the proposed construction route of the Dempster Highway. Includes key details of supporting infrastructure for the proposed pipeline.
[click to view]

Map of the proposed Mackenzie Valley Pipeline during the late 1970s, alongside the proposed construction route of the Dempster Highway. Key ecological areas and communities highlighted alongside processing and production facilities. Also details on the exploration and production licenses of this development phase.
[click to view]

Meta Information
ContributorLauren Nelis, Bishop's University, [email protected]
Last update05/11/2018
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