I hope we here news soon..... Shale-gas boom a boon to Mackenzie pipeline hopes, minister says By Dave Cooper, Edmonton Journal October 19, 2010 EDMONTON - The booming shale-gas industry, which is a key reason behind the growing reserves -- and extremely low prices -- of natural gas prices in the U.S., may actually help the Mackenzie gas pipeline project.
"I think it will improve our chances for the pipeline because (the new gas supply) will stabilize the marketplace," Northwest Territories industry minister Bob McLeod said in an interview.
"We've been to Houston, Washington and all over, and what we have learned is that the problem with natural gas in the past has been the unpredictability of the pricing. And this makes it difficult for companies to switch from coal," he said.
"With the advent of shale gas, there is a very secure supply and stable pricing. There is even a big effort in the U.S. to convert the transportation sector to natural gas."
McLeod said it's forecasted that North America will need both the estimated 52 trillion cubic feet (Tcf) from Canada's Beaufort Sea region and the 135 Tcf from Alaska's North Slope.
The Alaska project has the advantage of $18 billion in loan guarantees, which may rise to $40 billion. Canada is offering $3.1 billion in financial backstops for the estimated $16.2-billion Mackenzie line.
The Alaska project, which will carry three times the Mackenzie capacity, would attach to the Alberta gas network and through it to the rest of the U.S.
It has been described as the biggest construction project in North American history.
"But most people in the North understand that the Mackenzie line has to go first, before the Alaska line, or it won't go at all. Alaska gas would flood the market for some time.
U.S. gas demand is about 22 Tcf per year, and Canada's demand is about three Tcf. The Alaska line could deliver two Tcf per year by 2025, while Mackenzie's output would be about .7 Tcf.
That suggests both lines could deliver about seven per cent of total North American demand by 2025.
McLeod said while Alberta officially has no opinion on which pipeline should go ahead first, the Mackenzie line would encourage more gas drilling just across Alberta's northern border.
"The Western Canadian sedimentary basin doesn't stop at the NWT border, but the drilling does, because if they find anything they have no way to get it out."
While the government response to the National Energy Board's report on the pipeline is expected in December, Imperial Oil and other energy firms have shown less and less interest in proceeding with the line.
Despite that, McLeod insists the Mackenzie is the "top priority" for the territorial government.
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