[Sust-mar] SC Press Release: abandon uneconomic gas project
Paul A Falvo
pfalvo at chebucto.ns.ca
Fri Oct 7 13:23:59 EDT 2005
Sierra Club of Canada Press Release
Friday October 7, 2005
*1. Abandon Uneconomic Mackenzie Gas Project *
Ottawa--Imperial Oil, ExxonMobil, Shell Oil and Conoco-Phillips must
abandon the Mackenzie Gas Project if it is truly uneconomic says Sierra
Club of Canada.
"Turning over even a fraction of the $2 billion in federal subsidies
sought by these fabulously profitable multinationals would be a
mindboggling boondoggle" says Stephen Hazell Sierra Club's conservation
director. "Imperial Oil and its partners should abandon the project if
they can't make a go of it with the $1.4 billion in annual federal
subsidies they receive already."
Sierra Club of Canada is skeptical about the claims of Tim Hearn,
Imperial Oil's CEO, that the MGP is uneconomic given that he relied on a
long-term price for natural gas of $2.50 per thousand cubic feet, when
it is currently selling for $14 per thousand cubic feet. "Mr. Hearn may
simply be jiving the feds in order to increase profit margins for the
oil companies. Unfortunately for Canadian taxpayers, the federal and
Northwest Territories governments have consistently sent out signals
that they are prepared to jump through any hoops that the companies hold
up. We trust that this latest gambit is one hoop too many" he said.
Given the large investments that governments and First Nations have
already made responding to the MGP proposal and preparing for the
enormous social and ecological dislocations that the project would
cause, Imperial Oil has a duty to explain why it now believes the
Mackenzie Gas Project is uneconomic. Is it because:
Engineering costs associated with constructing a chilled gas
pipeline buried in permafrost are skyrocketing?
Costs associated with keeping the pipelines operational over the
next 25 years are likely to spiral? (Expected rapid climate
warming in the Mackenzie Valley will cause permafrost melting and
frost heaving effects that could wreak havoc with the pipelines.
Imperial Oil recently applied to the National Energy Board to
prevent the release of frost heave data that it has been collecting)
Costs of ensuring that indigenous communities receive some
economic benefits from the MGP and are prepared to address social
and ecological impacts are too high?
Instead of subsidizing oil companies, the federal government should
invest in energy efficiency and alternatives to fossil fuels in order to
meet Kyoto Protocol commitments and provide long-term relief for
Canadians from higher fuel prices.
Mackenzie gas is intended to fuel the planned five-fold expansion of oil
production from Alberta tar sands by 2030. The 1.5 billion cubic feet
per day of Mackenzie gas is crucial to fueling extraction of bitumen
from the tar sands as well as providing hydrogen to upgrade the bitumen.
Tar sands oil produces roughly twice as much greenhouse gases per barrel
of oil as conventionally produced oil, destroys boreal forest and
wetlands, and produces massive tailings, air and water pollution. Sierra
Club of Canada is asking Canadians and Americans to sign the Mackenzie
WILD Declaration in order to constrain the unsustainable growth of the
tar sands industry as well as protect Mackenzie Valley wilderness.
Read more about the Mackenzie WILD campaign at www.mackenzieWILD.ca
Contact: Stephen Hazell 613 241-4611 or shazell at sierraclub.ca
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