It’s a wrap. The Yellowknife section of the National Energy Board Hearing regarding the Mackenzie Valley pipeline has come to a close. During the final cross- examination of the Cost of Capitol and Depreciation Panel, the risks of the pipeline were examined. While the pipeline may not go forward one of the risks is competing development and Andrew Safir on the panel says the pipeline is not a swing pipeline. “I think this resource base is sensitive to being displaced by other large gas sources that could come on. That are less remote, or are in some sense, more subsidized.” Safir adds there are many possible competitors on the horizon.

“We’ve seen a number of potential projects in the works. There is a substantial amount of LNG that will definitely be hitting the system in the southern tip of California. Something on the order of 2 BCF per day, in a few short years. There are the potential for a number of other landed projects in and around North America.” The more time it takes for the pipeline to get underway the more likely it is it won’t get underway at all. Kathleen McShane on the panel says the longer it takes to proceed with the pipeline the more logical it becomes that it won’t happen. “The longer the pipeline is deferred, the higher the potential amount of the costs that will have to be incurred and the higher the potential that the pipeline’s economics could be ultimately impaired.” If the pipeline does go through Safir says the pipeline would face other substantial competition.

“There is the possibility that, certainly during the period of the 20- year contracts that Alaskan gas may be coming on line and while Alaskan gas is undoubtedly a remote resource, High Arctic type resource, as well, there are tremendous incentives that have been put in place that may assist in bringing that gas to market.”

During the break in the cross examination the mood was light as a man wearing a raccoon hat played Davy Crocket on his laptop.