Hydraulic fracturing, a new drilling technique used to extract shale-gas, has unlocked significant supplies of natural gas in the United States. The U.S. authority on gas supplies, the Potential Gas Committee, has been releasing biennial reports for the past 44 years. The 2008 report, released June 18, 2009, indicated that natural gas reserves have increased by 35% since 2006, demonstrating the highest jump in the Committee's history. Shale-gas represented the majority of this 35% growth.
The U.S.' recent discovery of its natural gas resource located largely within its gulf coast may add to the difficulties faced by the Mackenzie Gas Project (MGP). The MGP proposes shipping natural gas from the mouth of the Mackenzie River in the Northwest Territories to the Alberta border where it would be fed into the existing TransCanada network.
Preparation for the MGP began in 2001. Approvals remain outstanding from the required federal, territorial, provincial and settlement area authorities responsible for assessing and regulating energy developments. The regulatory review of the project was initiated in 2004 through the filing of the Environmental Impact Statement and the project's major regulatory applications with the National Energy Board. In March 2007, the stakeholders in the project set 2014 as the timeline for the pipeline becoming operational and a budget of $16.2-billion to get it there. Recent reports indicate that regulatory delays and cost issues have rendered the expected start date "uncertain". The release of the Potential Gas Committee's report, coupled with the United States Government announcement in June that it will increase its government loan guarantees from $18-billion to $30-billion for MGP's competitor project, the Alaskan Natural Gas Pipeline (AP), could potentially further delay, or indefinitely shelve, the advancement of the MGP.
The AP is an approximated $26-billion venture that would transport gas from Alaska's North Slope to markets in the lower 48 states. Although the AP is slated to be completed four years after the MGP, the U.S. Government has clearly indicated that they consider the AP to be a priority. If the AP is completed first, the case to move forward the smaller MGP will be diminished. Nonetheless, the statements from industry representatives continue to affirm that both pipelines will be needed, even with the shale-gas expropriation.
The potential impact of the shale-gas expropriation upon the MGP is, at this point, only speculative. The shale-gas expropriation itself raises concerns : currently high drilling costs and extensive water use may each have their own long term impacts on the economy and environment. Regardless, as a result of this recent study, the trade implications, environmental regulations and economic situations of the communities along the MGP will likely become hot topics in both Canada and the U.S. as both countries attempt to sort out their management of this fuel.