Panels recommendations could hamper northern development, CAPP says

CALGARY - A report giving a conditional green-light to a key Arctic natural gas project is so laden with restrictions and requirements that it could deter future energy development in the North, says a group representing Canada's oil and gas producers.
A federally appointed Joint Review Panel concluded in December that the Mackenzie Gas Project, which would link natural gas fields in the Northwest Territories to southern markets, could "provide the foundation of a sustainable northern future."
However, the panel based its conclusion on governments and the project's backers meeting 176 conditions. The recommendations cover everything from protecting wildlife to monitoring long-term environmental impacts to ensuring local communities reap economic benefits from the project.
"Complete adoption of the recommendations will add to an already challenging regulatory burden, create additional uncertainty for future development and create significant disincentives for sustainable economic development in the NWT relative to other jurisdictions," the Canadian Association of Petroleum Producers said in a letter to the National Energy Board.
The letter was one of several to be filed in recent weeks to the NEB, which will take the Joint Review Panel's recommendations - and responses to them - into consideration when making a final decision on whether the Mackenzie project should go ahead.
The report tackles issues beyond the scope of the project, veering into the realm of policy-making and assessment of future developments, said the CAPP letter, which was signed by president Dave Collyer and chair of northern Canada Henry Sykes.
"Addressing matters of policy through environmental review creates an unfortunate and ill-advised precedent," the letter said.
"In attempting to find the balance between mitigating significant negative environmental impacts and enabling the benefits of responsible development, the report proposes so many pre-conditions, requirements and restrictions on future activity that it is likely to discourage future investment and compromise potential economic activity."
Environmental groups have largely embraced the panel's recommendations.
In a letter to the NEB, World Wildlife Fund Canada said it was "fully supportive" of the report and agrees the project can secure both environmental protection and social benefits in the region if the recommendations are adopted in their entirety.
"We also note that none of the measures the panel proposes would interfere with or impede the project, since they are either required as part of the necessary process of solidifying conceptual plans, or they can be accomplished within a reasonable time relative to the most optimistic project construction schedule," WWF said.
The proposed Mackenzie Gas Project involves anchor gas fields near the coast of the Beaufort Sea and a 1,220-kilometre pipeline to carry the gas to the Alberta boundary.
Imperial Oil Ltd. (TSX:IMO), which leads the consortium of companies backing the project, has also expressed concerns that the JRP recommendations are too "far reaching."
Other Mackenzie supporters include Imperial's U.S. parent ExxonMobil Corp. (NYSE:XOM), Royal Dutch Shell PLC (NYSE:RDS), ConocoPhillips (NYSE:COP) and the Aboriginal Pipeline Group, which acts on behalf of communities in the region.
TransCanada Corp. (TSX:TRP), which would feet gas from the Mackenzie into its Alberta transmission system, is involved through its investment in the APG.