[Sust-mar] SC Press Release: abandon uneconomic gas project

[Paul A Falvo]

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