The much anticipated but long-doubted Mackenzie Valley pipeline project has gone out with a whimper.
On Friday, Imperial Oil posted a press release to its website announcing the project’s proponents had dissolved the joint-venture partnership driving the Mackenzie Valley Gas Project. The joint-venture included Imperial Oil Resources Limited, ConocoPhillips Canada, ExxonMobil Canada and the Aboriginal Pipeline Group.
By 2016, when the National Energy Board approved an extension of the project’s deadline to begin construction in 2022, the estimated cost of the project had grown to more than $16 billion. According to Friday’s press release, current natural gas prices do not justify the project, originally approved by the NEB at the end of 2010 after six years of review.
Mervin Gruben, mayor of Tuktoyaktuk, the small N.W.T. coastal community with much to gain if the 1,200-kilometre pipeline stretching from the Mackenzie River Delta to northern Alberta had been built, said he only learned of the project’s demise on Wednesday. He took the news in stride — “We all knew that was coming” — but said it was a sad day for many.
Mervin Gruben’s Tuktoyaktuk-based E. Gruben’s Transport was a major contractor on the Inuvik Tuktoyaktuk Highway. (Mackenzie Scott/CBC)
“We had a lot of high hopes, we even built a new hotel in Inuvik, the Mackenzie Hotel, in the hopes [the pipeline] was going to take off,” Gruben said.
Gruben said the hotel struggled in the beginning but had since found its legs, unlike others who invested in the hopes of a pipeline. “So many other businesses didn’t succeed.”
“This pipeline was really just a pipe dream,” he said. “We gambled on it and a lot of people lost.”
He said he remembers when the project really began to take shape in 2000, adding that the project’s review panel took too long approve the work.
“It was just a farce the way they wasted their time doing all these studies and all these meetings all over the North,” Gruben said. “They wasted so much money and time. By the time they said it was a go, it was too late … all the [natural gas] prices had gone down.”
‘Disappointing day’
Theresa Redburn, Imperial Oil senior vice-president of commercial and corporate development, acknowledged the sense of defeat some in the North may feel.
“We recognize this is a disappointing day for the people of the North. This is a disappointment to Imperial and the other members of the joint venture, as well,” Redburn said in the company’s press release.
“Imperial greatly appreciates the support of the communities along the pipeline right-of-way and believes the North remains an important potential source of future energy, given the right economic and regulatory conditions.”
Gruben’s construction company was a large part of the recently completed $300 million Inuvik Tuktoyaktuk Highway, conceived in part to bolster the viability of petroleum resources in the Beaufort Delta region.
Gruben said he expects his and neighbouring communities will now turn their attention to what he said are proven petroleum assets in the region, including a natural gas well drilled just off the new highway that could fuel Mackenzie River Delta communities for “100 years.”
He said the possibility of a deep water port in the region could unlock oil and gas potential, especially once a moratorium on offshore drilling ends.
“This isn’t going to stop us,” he said. “We’re still going forward.”