May 21, 2008 - The most recent delay in the release of the Joint Review Panel’s final report on the Mackenzie Valley Gas Pipeline is leaving a sour taste in the mouths of northern investors, Premier Floyd Roland said last week.

While Roland admitted the JRP’s task is monumental, he said the constant delays are affecting the investment climate in the Northwest Territories. “It does send a negative message back to the investment in our territory,” he told The Hub on Thursday.

“When people want to look at doing business in the north, they’re unsure if things will go ahead. No company would be ready to spend millions of dollars upgrading equipment, and reinvesting in capital based around a pipeline project until they get a better indication.”

The report, which was expected sometime in the fall, is now delayed until at least sometime in 2009. Roland said the

Government of the Northwest Territories (GNWT) supports the project, which is of vital importance to the future of the NWT.

“As a government we want to invest in and diversify our economy and prepare for the pipeline,” Roland said in a release on May 8. “The time is right for this project to move ahead, continued delays in the process are not helpful.”

Bob Reid, president of the Aboriginal Pipeline Group (APG) - one of the main proponents in the pipeline project, said the delays were becoming costly. The JRP report is years behind schedule. Reid explained that the report was originally expected in 2006 - two years after the original application for the project was filed. The National Energy Board (NEB) cannot release its decision until the report is filed, Reid explained.

“Any delay is bad news for APG,” he said. “The NEB have basically been sitting adjourned waiting for the JRP report. I have no idea why it’s taking this long.”

A delay in the report results in a delay in the NEB releasing their decision on the project. The continued delays have pushed back the in-service date for the pipeline.

“Once the pipeline is up and running, we’re going to be delivering very significant dividends back to our Aboriginal stakeholders,” said Reid. “We can’t begin delivering those dividends until the pipeline begins delivering gas.”

A spokesperson for the Northern Gas Project Secretariat - an independent group that assisted with at the hearings - said the delays have been out of control of the JRP. Annette Bourgeois-Bent said things like court cases delayed the actual length of the hearings. The original timeline had not taken into account the hearing delays. The writing of the report began after the last hearing in November.

“The timeline for the hearings themselves were delayed. There’s a number of reasons - not all within the control of the Joint Review Panel,” she said from Calgary, where the JRP was holding meetings last week.

“You can imagine the amount of information they did receive. The number of communities they visited. The thousands of pages of information and evidence they need to look at. They need to be quite thorough in doing their report. Obviously that would take some time.”

Pius Rolheiser, a spokesperson with Imperial Oil, said his company only received news of the newest delay after discussions with the secretariat.

“Up until this most recent indication from the Northern Gas Project Secretariat ... we had been expecting the report to be available by mid-2008,” Rolheiser said. “Obviously it’s not a positive development for us.”

In order to shorten the delay, Rolheiser said Imperial recently approached the JRP to offer their assistance to speed up the process. “What we can do to create an atmosphere or conditions under which the JRP could carry out its mandates sooner rather than later,” he said.

Once the JRP releases its report, the public will be given some time to respond to the report. The NEB would then release its final decision.

For now all the proponents can do is sit and wait, Rolheiser explained. With most of the project-specific work already out of the way, Rolheiser said there was not much more the proponents in the project can do until the JRP releases its report.

“We remain committed to the project and are working diligently on a number of fronts to do whatever we can to move it forward to a successful conclusion.”

May 22, 2008 - JUNEAU -- The Palin administration is ready to release its findings on TransCanada's proposal to build a natural gas pipeline that will tap gas reserves on the North Slope.

Gov. Sarah Palin, Natural Resources Commissioner Tom Irwin and Revenue Commissioner Pat Galvin will announce today whether the plan merits issuance of a license under Palin's Alaska Gasline Inducement Act.

The commissioners' analysis also will address the viability of an LNG option and a gas line proposal introduced by BP and Conoco Phillips last month, called the Denali Project.

Lawmakers expect to be reviewing a license proposal from Palin's gas line team during a special session that begins June 3 in Juneau.

Jon Harding, Calgary Herald

http://www.canada.com/calgaryherald/index.html

May 16, 2008 - Among Clay Riddell's newest business interests is a "zero-emissions horizontal rocket" that burns any number of fuels to make electricity while throwing off a pure, catchable stream of carbon dioxide.

The longtime Calgary oil executive, revered today as one of the top generators of wealth in the Canadian oilpatch, is the majority owner of privately held Paxton Corp., a Canadian company using a patented U.S. technology and whose motto is "applying greenhouse gases to a useful purpose."

Riddell will never be accused of being shortsighted. The 70-year-old chief executive of Paramount Resources Ltd. saw that the oil and gas recovery business was on a collision course with environmentalist concerns over emissions 24 months ago.

So like any good entrepreneur, he saw opportunity.

Riddell started Paxton -- closely held Paramount is the company's majority owner -- and it began accumulating shares of U.S.-based Clean Energy Systems Inc., which created the patented power-generation technology Paxton hopes to roll out soon.

During a wide-ranging interview following Paramount's annual general meeting Thursday, Riddell talked about the oil industry's growing friction with the green movement and about the slow progress plaguing the Mackenzie Gas Project (another Paramount interest is MGM Energy Corp., which owns prospective land in the Northwest Territories and Canada's Arctic).

He also offered his views -- for the first time publicly -- on the Alberta government's decision last year to raise royalty rates on oil and gas production.

Riddell, whose career in the Alberta oilpatch spans five decades, said Paramount's actions as a corporation have spoken for him. The Calgary-based firm, which he founded in 1978, shifted half of its 2008 capital spending program out of Alberta to North Dakota's Bakken light oil play.

Q: So what is Paxton Corp. going to do? Is this Clay Riddell getting into the commercial power generation business or a way for Paramount to economically access clean CO2 to use for enhanced oil recovery?

A: When carbon sequestration "became a good idea" we were already marching along and doing it. We just received a $65-million US grant from the U.S. Department of Energy to do a carbon sequestration project in California. It's a horizontal rocket that produces power. The Clean Energy Solutions people are all retired from NASA. It's basically a 12-inch gun that burns a variety of fuels -- including the bottoms from refineries. The key is it burns in an oxygen atmosphere rather than air so it produces a pure CO2. We have to sell the power and we have to sell the CO2, or use the CO2. It can make steam and could be used in the oilsands.

Q: In the end, and after addressing the unintended consequences of its new royalty framework, did the Alberta government get it right?

A: I don't think the government realizes it, but United States gas production is growing by leaps and bounds. We can't compete, and if we can't compete, the dollars are going to go down there and that's where the wells will be drilled. In a matter of months, or perhaps in a year or so, the government will realize the dollars are not being spent in Alberta and it will change. It's always been that way -- back and forth. The government takes a stand, things change and then they make changes (back) to get where they really wanted. Limiting the incentive to drill deep oil exploratory wells was insane.

Q: Paramount has large light oil discoveries in the Puskwa play north of Grande Prairie. What happens there due to the royalty changes?

A: We are retaining our leases for when the play becomes more viable on a royalty basis. Now, the price of oil goes up $50 US and the province gets what, $40 US of that? It doesn't work. So we will spend money where it is more attractive for shareholders.

Q: In early 2007 you "promised" the MGM board that first gas would be moving from the Mackenzie Delta south through the Mackenzie natural gas pipeline on July 13, 2012, the date of your 75th birthday. How do you feel now about that bold prediction?

A: I don't think it's going to make it. In fact, I know it won't. It's more likely 2015, and maybe later. But I do think it will come because the resource is there, and the economics are there that make it viable, even with the costs involved now. We think with the current estimated tariffs on the pipeline it's a viable project, given the size of the pools and the operating costs in the North. It's also my belief the government of Canada would like to see it built.

Q: As a longtime explorer in the Northwest Territories and across Western Canada, what do you think the pipeline getting built would mean for drilling activity?

A: I'm old enough to remember when TransCanada Corp.'s mainline was built 50 years ago from Western Canada to Eastern Canada. It opened up the entire basin of Western Canada. In my mind, five years after Mackenzie is up and running, it will have been looped at least once and maybe even twice.

Q: Paramount has cobbled together a large swath of oilsands leases west of Fort McMurray, where the oil is trapped in limestone, as opposed to sand, and where there is no commercial production and no proven technology to economically tap the resource. What kind of technology are you looking at?

A: We are going to be watchers. When someone figures out how to do it, the assets will be valuable and they won't be available. We didn't know how to do the oilsands in the late 1990s but we made a lot of money from them. That's our same strategy here. Incidentally, we have a lot of sands as well, it's not only carbonate.

Q: What concerns you the most about the state of the western Canadian oil industry?

A: Our basin is having a very tough time competing with the U.S. basins on natural gas right now and my concern is they will continue drilling there -- which they should -- but that it will increase production fast enough to drive gas prices down and make our basin uneconomic. Natural gas is around $11 US per million British thermal units right now and we are economic, but they are making a whole lot more money than we are. So will the U.S. production just price us out of the market?

Q: What about the oilsands and the deaths of hundreds of ducks in the Syncrude Canada Ltd. tailing pond?

A: I haven't been up there in awhile and I was surprised with the size that the ponds have grown to. In the grand scheme, it's a tempest in a teapot. Had some hunters shot those ducks on the way in -- and thousands do get shot every year by hunters -- you'd have never heard a thing about it. It was an unfortunate accident and certainly made for bad public relations. The industry, you know, really is pretty good at keeping things clean.