Mackenzie Valley Pipeline

The not so well understood realities behind the proposed Mackenzie Valley Pipeline.



In the 1970s there was considerable activity in energy business and government circles aimed at the "need" to develop a pipeline to facilitate delivery to market of the massive reserves of natural gas in the Mackenzie River delta on the edge of the Beaufort Sea. Despite the size of those reserves, without a pipeline to get it to market it may as well be left in the ground. And the nearest pipelines into which the natural gas could be delivered were over a thousand kilometers away.(1)

The two prime candidates were the Alaska pipeline and a new pipeline south through the Northwest Territories to link up with pipelines in northern Alberta. At that time the estimated cost to link up to the Alberta pipeline was of the magnitude of $4-billion while the estimate for going west and linking up to the Alaska pipeline was about $16.12-billion. It was obvious, based on these estimates, and despite strong opposition of the native groups over whose land the southbound pipeline would have to cross, that the winning proposal could only be the southbound pipeline. At that stage two possible routes for that pipeline were proposed. Eventually the proposed Mackenzie Valley pipeline was approved, despite still growing opposition from native groups and environmentalists.(5)

This pipeline was, of course, conditional on the Canadian government coughing up a sizable chunk of federal tax money to help defray development costs. At that stage the Canadian government committed to putting in $500-million, one eighth of the overall estimated cost.(4) This money was being put in, however, not in the form of an investment with the potential of payback from the eventual profits of the enterprise. It was, rather, in the form of a development grant, a gift to the large, extremely profitable energy giants partnered in the project. They included Imperial Oil, wholly owned by Exxon-Mobil, the largest and most profitable corporation in the world, Shell and Conoco-Phillips.

In his final report on the proposed pipeline project titled Northern Frontier, Northern Homeland, issued on May 9, 1977, Justice Thomas Berger presciently warned that "....any gas pipeline would be followed by an oil pipeline, that the infrastructure supporting this "energy corridor" would be enormous - roads, airports, maintenance bases, new towns - with an impact on the people, animals and land equivalent to building a railway across Canada."(1) The route for the pipeline would, after all, traverse one of the most delicate and unique landscapes in the world. The type of development Berger was concerned about and warned about in his report is typified by this. "Vancouver-based West Hawk Development (TSXV:WHD) has unveiled plans to strip-mine extensive coal reserves along the Mackenzie River [my emphasis] and begin building $2 billion worth of coal gasification plants to tie into the pipeline within four years."(3)


There is a very important energy sovereignty issue in all of this for the Canadian people. The natural gas extracted from Canadian soil that flows through the proposed Mackenzie Valley pipeline (both pipeline and the natural gas "owned" by U.S. and other multinational energy corporations) will be destined (flow will not start now until, at the earliest, 2014) for one of two purposes. It will feed directly into the pipeline feeding that natural gas into the U.S. market or it will be used in Fort MacMurray to process tar sands to produce synthetic oil to be fed directly into a pipeline to feed the U.S. market. Neither the natural gas in the pipeline or the tar sands oil it will be used to process will have any energy benefit to Canadians. Under the requirements of the proportionality clause in the NAFTA agreement, from which Mexico was exempted and applies only to Canada, Canada has an obligation to continue to supply to the U.S. market each year a proportion of its total oil and natural gas production equivalent to that supplied in the previous three years. That commitment still holds, as long as remain participants in NAFTA, whether or not we would have left after satisfying U.S. demand enough oil and/or natural gas to satisfy our own needs. As Colin Campbell of ASPO put it, "Canadians will be freezing in the dark while their natural gas runs hair dryers in Houston."

The story, of course, does not end there. Exxon-Mobil have this month released new financial data indicating that the cost of the pipeline project has now mushroomed to $16.2-billion. Among other things it is interesting that the real cost now on the table is higher than the original $16.12-billion cost of the competing Alaska pipeline solution which this pipeline beat out because of it's originally estimated $4-billion cost.(6) With this new financial report in hand Exxon-Mobil are crying poor and have gone back to the Canadian government "....looking for a fiscal framework that makes sense for all parties...." this is another way of saying they are looking for another federal government handout (some suggest as much as $2-billion) because Exxon-Mobil "....expect double-digit (percentage) returns on this kind of investment, and we're nowhere near that."(7)(8)

One must ask in all of this what the Canadian people get out of all this currently committed $500-million, let alone any additional money Exxon-Mobil and the consortium they represent manage to extort from the Canadian government. Not only will the natural gas flowing through the pipeline allow for a faster pace in destroying the land around Fort MacMurray but the project, directly and indirectly, will facilitate the wholesale destruction of the Mackenzie Valley watershed, the largest fresh water system in Canada. Any profits from the sale of the natural gas, whether to tar sands projects or in the U.S. market, will flow out of the country to foreign-owned multinationals. And whether that natural gas is used in Fort MacMurray or flows on down into the U.S. it will continue to add to or maintain our commitment to supply more natural gas to the U.S. under the NAFTA proportionality clause. It must be noted that both conventional crude oil and natural gas are already in decline. Forty percent of our domestically-used crude oil already comes from imports. Two LNG terminals are already being built in the Maritimes to make up for the future shortfall in domestic supply.
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1. The Mackenzie Valley pipeline
2. Oil companies stop work on Mackenzie Valley pipeline
3. Proposed Mackenzie Valley pipeline spurs Arctic mega-plan
4. Mackenzie Valley Pipeline a Go, But …
5. Mackenzie Valley Pipeline and Alberta Tar Sands
6. The Mackenzie Valley The Mackenzie Valley Pipeline
7. Mackenzie gas line still 'leading case' despite bloating $16.2B cost outlook
8. Mackenzie gas project to cost $16.2B: Imperial Oil

Why the blog is "quiet" recently

My apologies to those who expect the blog to have new articles once or twice a week. Right at the moment something else is commanding my attention. I am at a critical point in developing my next book where that effort needs my undivided attention. Between that and a recent surge in presentations and talks I simply have not had the time in my schedule to add anything to the blog. It's not for lack of ideas or subject matter. It's just for lack of time to develop and post them.

I will be past this stage of book development in another week. Then the outline and sample chapters will go off to my agent and I can bring things back to some semblance of normalcy. Bear with me. And thanks to all of you for your interest and support. It has been most gratifying.

Who Ever Said Life is Supposed to be Easy?

I actively monitor and participate in several Yahoo Peak Oil e-mail groups. On those groups there is a constant stream of teeth-gnashing over the impact that peak-oil, global warming, and whatever else are going to have on our easy, comfortable lifestyle. There is incessant discussion of what parts of our lifestyle we want to hold on to as we slide down the energy downslope on our way to a post fossil-fuel age. Even on these groups of people who are supposedly fully aware of the implications of peak oil there is constant discussion of ways to hold on, and a corresponding lack of an ability to visualize a lifestyle devoid of the energy inputs we now have.

Okay. I understand that change is traumatic. I understand how difficult it is to figure out how to incorporate such massive change as we have ahead of us into your personal life program. But whoever said life is supposed to be easy? Life is a struggle, very often downright brutal. Get used to it. There is no such thing as a free lunch. We in the industrialized world have rapaciously frittered away the energy resources of this planet in building a truly decadent lifestyle that we, over the course of these past few decades, have come to believe is our birthright. It's not. Get used to it. No other species on this planet that lives within the limits imposed on it by nature (and man!) assumes that life is easy. A female wildebeest drops a calf on the African savanna and within minutes it is up and ready to run, ready to keep up with the herd. If not it is liable to end up as some predator's lunch. That's life. No matter how massive our intellect in comparison to other species it in no way guarantees that we can continue to abuse the natural world that our man-made, virtual world still ultimately relies on.

I don't know when peak oil will occur, or peak natural gas or peak coal or peak uranium or whatever other peaks our species is bringing about this century. I don't know how rapid the decline will be on the other side of the peak. I don't know how governments and business and industry and individual people will adjust to that new reality. I am, however, very certain that our lifestyle fifty years from now will be far different than it is today. And not, by most people's definition, for the better. For all I know, you may be driving the last car you will ever own, living in the last home you will ever buy. Or we may find ways to extend the peak into a long plateau and not have to pay the full price for our profligate energy use for another several decades. The longer we extend that plateau, however, the steeper and more dramatic will be the decline when we can no longer hold it off.



I don't expect everyone to voluntarily give up the lifestyle they were born into or have built through their own efforts. That would be nice but it's not going to happen. Most people will hold on to as much as possible for as long as possible. I won't say that is human nature. That is such an over-used rationalization and cavalier excuse for the unconscionable ills we inflict on the life-supporting environment of this planet. I will concede only that it is an all too common way that people deal with adversity. They get so locked into dealing with the now that they can't or won't see that it is wiser, in the long run, to deal with the future before it is inflicted on them.

We are, so far as we know, the only intellectually gifted species on this planet. That intellect also imbues us with the unique gift of foresight. So far as we know, no other species on this planet can understand that it's actions may destroy the very environment on which they depend for life. We can! If we do not it is because we choose not to. The ability is there in that brain we were given. It's time to start using that gift of foresight instead of continuing to sleepwalk toward the species disaster of our own making.

Man is the only species on this planet intelligent enough to foresee his own extinction, creative enough to bring it about, stupid enough to allow it to happen. A fitting epitaph for what is arguably the most promising species to ever walk this planet.

Energy as the Catalyst in the Punctuated Equilibrium of Human Population Growth

The history of human cultural evolution is generally regarded as being closely linked to the development and evolution of agriculture. As man (initially in isolated local pockets) learned to plant seeds and grow his food rather than having to find it or chase it, human cultural evolution gradually moved toward the production of surpluses capable of supporting community building and urbanization.

It is generally argued that the "unnatural" growth in human population began with that simple act of planting a seed and the associated act of fixing a harness to an animal and having it pull a plow.

This whole argument, however, is one of observing results in isolation and to miss the underlying cause. The underlying catalyst to the growth of the human population is the exploitation of energy in its broadest context. The advance in human numbers, from the beginning of the history of man on earth, has been punctuated - in the context of Stephen J. Gould's theory of punctuated equilibrium in speciation and evolution - by the discovery, recognition, understanding and exploitation of new forms of energy. Even that first planting of favored seeds around the hunter-gatherer's camp site was a process of exploiting the energy contained within those seeds by which those seeds could reproduce the plant from which they came.

The nature of punctuated equilibrium in the growth of human population is completely different than punctuated equilibrium in the genesis and evolution of species. The spurts of human population growth are caused by our own activity. It is not dependent on genetic evolution but, rather, memetic evolution. We are responsible for our own pattern of punctuated equilibrium. Each spurt in human population growth, most notably that since the beginning of the industrial revolution, are closely linked to the discovery, recognition, understanding and exploitation of a new "energy source" in the broadest context.

What has pushed us into extreme exponential population growth since the beginning of the Industrial Revolution is a series of new and tightly overlapping energy exploitations closely following on a previous series of lower impact energy exploitations. All three fossil fuels had, before the industrial revolution, small scale local use. But other energy exploitations like the use of wind energy for windmills and sails, solar energy use in ovens, water energy in water wheels and the aqueduct systems like those built by the Romans, had all preceded the industrial revolution. But the overlapping cumulative exploitation of coal, oil, natural gas, electricity and nuclear had a truly revolutionary impact on human society and human population. Our numbers grew exponentially from about 850 million in 1700 to 6.5 billion at the beginning of this millennium just three centuries later. It is that cumulative contribution of so many very major new energy resources that has thrown the human population into the most extreme period of punctuated equilibrium and exponential growth in human history.

There is, however, another very worrying aspect of the punctuated equilibrium pattern brought on by the exploitation of new energy sources. Their application follows a standard Gaussian Curve or bell curve, application climbing relatively rapidly to a peak and falling rapidly with the discovery and exploitation of "the next" energy source. The worrying part is that growth in human population - usually local but sometimes, as now, global - follows the same Gaussian Curve. There is a short spurt of human population followed by a short term drop back to a level of stasis as the exploitation of that energy source goes into decline.

The current short (by historical standards) period of exponential growth in human numbers has been the result of a three century series of overlapping and cumulative exploitations of a half dozen unprecedented new energy sources. But the exploitation of all of these energy sources is moving rapidly toward a peak that will occur this century. As each of them peak there will be a corresponding negative impact on human population. This impact will gain negative momentum as the exploitation of each of these energy sources peaks and begins to decline. What is the level of population stasis to which we will decline as all of these energy sources falter? The population when we started up the steep slope of the Gaussian Curve was about 850 million. Most analysts of peak oil and other looming global crises believe the population will stabilize somewhere between one and two billion.

Based on historical trends it is more likely to be the lower figure of one billion.

However, there are approximately two billion people on the planet who arguably survive with no benefit from fossil fuels or any of the other energy sources that have driven our exponential rise in population. I would argue that they do, in fact, benefit indirectly from those energy sources through the importation of food, the mechanical exploitation of water sources, the availability of medicines produced by that exploitation of energy, and through the "manufactured" tools and other materials and goods they use and consume. I still, therefore, believe that the one billion number is more likely.

Historically, as well, the impact of the punctuated equilibrium on population has been localized to the relatively small geographic areas in which exploitation of the energy source is taking place. As a result these local population spurts had only minimal impact on global human population growth. With the growth of global trade in both goods and ideas that was such a key part of the industrial revolution, exploitation of these half dozen new energy sources , for the first time in human history, became global. The population of virtually every nation and region on earth grew - not at the same time or the same rate (Britain was experiencing a population increase of about 3% per year in the early stage of the industrial revolution while the overall world population was roughly static) - as the exploitation of these energy sources grew.

For the first time the Gaussian Curve of energy-mitigated population growth is global, an accumulation of all of the local growth patterns. Since growth in all of these areas, however, depends on the same globally traded energy resources, the slide down the back side of the curve will not be as spread out and gradual as it was on the up slope. This strongly suggests there will be a global population crash when these energy sources and resources go into irreversible decline and all nations experience the loss of benefit from these energy sources at the same time.


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Population and Energy - Graham Zabel - http://dieoff.org/page199.htm
The Energy Crisis is Here by Stan Goff - http://www.williambowles.info/guests/energy_crisis.html
World Energy Production, Population Growth, And the Road to the Olduvai Gorge - Richard C. Duncan - http://www.hubbertpeak.com/duncan/road2olduvai.pdf
Tight Squeeze - By Mark Ridley - http://query.nytimes.com/gst/fullpage.html?res=9503EEDA1239F93AA25752C1A963958260
The Scientific Revolution - Introduction - E.L. Skip Knox, Boise State University -
http://history.boisestate.edu/WESTCIV/science/01.shtml
Population Growth, Energy Use, and Pollution: Understanding the Driving Forces of Global Change - http://www.aag.org/hdgc/Population_Growth.html