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A delicate balance

Public regulatory hearings begin today to examine the impact of the proposed Mackenzie Valley pipeline on the environment and people of the Northwest Territories, and prime mover Imperial Oil isn't even sure the $7.5-billion effort is worth it. DAVE EBNER reports

Globe and Mail Update

INUVIK, NWT — The birthplace on Joe Handley's birth certificate testifies to his connection with the land. Born in the bush, the document forgoes the name of a precise place for a more general co-ordinate: "Sec. 3, Tp. 59, Rge. 18, W. 3, Saskatchewan."

Mr. Handley, now Premier of the Northwest Territories, is still connected with wild, untouched land, living on a lake about 30 kilometres outside of Yellowknife. But he wants his territory of about 43,000 residents to step into the future as well, sharing in the benefits of industrial development while taking care to preserve the gorgeous and varied landscape of the North.

It is striking that delicate balance in this delicate place that is a central theme of public hearings that begin today in Inuvik, on the Mackenzie Delta in the Northwest Territories. A series of 137 regulatory meetings in small towns and even tinier outposts will consider the proposed $7.5-billion Mackenzie Valley natural gas pipeline.

"Even if people don't make their living off the land any more, people still remain close to the land," Mr. Handley says. "There are things that are more important than money. But you can't have it all one way or all the other way. There has to be a balance. . . . As great as the jobs and opportunities are, it's sure nice to sit on a river bank and see a real river flowing by and not have to worry about noise or pollution. Getting that balance is a big challenge for us."

The people of this territory look at northern Alberta, many repulsed by the gigantic strip mine that is the Fort McMurray oil sands.

They look at smog-choked Toronto.

They worry.

This cold, remote place is changing. Arctic activists fight to tell the world that the polar ice is melting, irrevocably affecting the region. Caribou, a onetime staple on dinner tables, is no longer served in Inuvik restaurants as the herds dwindle.

The temperature in Inuvik wavers somewhere lower than -30 C. Nellie Cournoyea, the chief power broker of this town, sits in a boardroom of Inuvialuit Regional Corp., a major pipeline supporter that connects roughly 140 local firms.

The Inuvialuit, one of four first nations groups along the pipeline route, were the first to settle a land claim, in 1984, and that deal protects the delicate environment alongside promoting development, insists Ms. Cournoyea, the corporation's CEO. "If provisos of the claim are respected, there will be a balance," she says. Environmental issues "don't take a secondary role. They're equally important."

While the economy here -- beyond government money -- is extremely weak, the Inuvialuit have had successes, making a profit of about $20-million in 2004 on revenue of more than $160-million. Among their partners is Calgary-based Akita Drilling Ltd., the company working on the Devon well, the first offshore venture in the Beaufort Sea in 17 years.

According to various estimates, there is enough gas in the Delta and the Beaufort Sea to rival proved current reserves in the rest of Canada.

Such potential ripples down the winding Mackenzie River valley.

David Hodgson -- owner of a contracting business in Norman Wells in the central valley -- feels the rumbles of industrialization. Working on his shop floor surrounded by heavy equipment, his hands are greasy, he's wearing a baseball cap and smoking a cigarette. It is -35 C outside.

He's a successful businessman. The North is where he was born; like most residents, the open, empty spaces resonate in his heart.

"It's got to be done right," the 43-year-old says. "Once that pipe comes, it won't stop."

It can be done right, says Judi Falsnes, who owns Arctic Chalet Ltd. just outside Inuvik with her husband Olav. They offer accommodations in individual cabins, often hosting workers in the oil and gas business, and provide dogsled tours through the woods and over nearby lakes, keeping a kennel of 25 rambunctious and barking Colville Lake huskies. The dogs are beautiful animals, with remarkable pale blue eyes and irresistibly cuddly, furry white like the vast stretches of snow all around this place.

Last May, the Falsneses visited Alaska, to see what the oil pipeline through that state -- built in the 1970s -- brought to the land and people. They came away reassured that a line down the Mackenzie won't ruin their territory.

"I know oil and gas can bring negatives," Ms. Falsnes says. "But if people make wise choices, it can be beneficial."

The National Energy Board begins public hearings today, with 62 dates planned through the year, primarily to assess the technical and economic merit of the pipeline proposal.

But the more emotionally significant meetings start in February, also in Inuvik, led by a joint review panel formed by the federal government and northern first nations' regulators in 2004 to examine the impact of the project on the environment and the region's people. The panel has 75 meetings planned, visiting the most distant communities.

Robert Hornal, a long-time consultant and federal civil servant in the North, chairs the seven-member group. Like Justice Thomas Berger in the 1970s, Mr. Hornal's panel will visit tiny places like Colville Lake, home to 135 north of the Arctic Circle, and Trout Lake, home to 80 in the southern NWT.

"In some places, my team may outnumber the residents of the community and that sort of scares me," Mr. Hornal says. "I hope it doesn't overwhelm them but I suspect they'll still want to talk to us."

Everything about the project threatens to overwhelm the region. About 12,000 construction workers will come here to build the line in the winters of 2009 and 2010, more than a quarter of the territories' populace and most will come from the outside. In just one example, Fort Good Hope, a hilly hamlet of 550, will host a work camp of 1,350, one of four instant towns planned along the construction route.

As year-long public hearings begin, the project's principal backer, Imperial Oil Ltd., isn't sure the effort is actually worth it.

"As you know, the Mackenzie project is very lean, from an economic standpoint," Randy Broiles, Imperial's senior vice-president leading the project, says in a small boardroom beside his office at company headquarters in Calgary.

The cost of the project has escalated, from $5-billion several years ago to an estimated $7.5-billion.

Mr. Broiles suggests the demands that come out of the regulatory process could be too much. Asked how much is too much, he doesn't give a precise answer -- leaving this whole epic, wrenching process in limbo.

"If you'd asked me that six months ago," Mr. Broiles says, "I would have said $7.5-billion was too much."

The prize

ConocoPhillips Co. controls the onshore Parsons Lake gas field, one of the three that would initially supply the pipeline. Further offshore, Conoco is sitting on 350 million barrels of oil in the Amauligak field. Devon Energy Corp.'s $60-million well drilled this winter out in the shallow frozen waters of the Beaufort Sea testifies to the area's potential. Armed with the first set of advanced 3-D seismic data ever collected in the area, Devon is hunting for a huge field of gas that could rival the giant Taglu field onshore, controlled by Imperial Oil Ltd.

The project

The main pipeline would run 1,200 kilometres down the Mackenzie Valley, connecting three major natural gas fields in the Delta with northern Alberta. The line is a single ribbon of steel, just 30 inches in diameter and buried, the conduit for a massive, Alberta-like oil and gas development.

Impact

Everything about the project threatens to overwhelm the region. About 12,000 construction workers will come here to build the line in the winters of 2009 and 2010, more than a quarter of the territories' populace. Most will come from away. In just one example, Fort Good Hope, a hamlet of 550, will host a work camp of 1,350, one of four instant towns planned along the construction route. The fragility of the Arctic ecosystem is a concern, as are potential societal ills brought by industrialization and its effects on a traditional way of life.

The hearings

The National Energy Board begins public hearings today, with 62 dates planned through the year, primarily to assess the technical and economic merit of Imperial's proposal. But the more emotionally significant meetings start in February, also in Inuvik, led by a joint review panel formed by the federal government and northern first nations' regulators in 2004 to examine the potential impacts of the project on the environment and lives of the people in the project area. The joint panel has 75 meetings planned, visiting the most distant communities.

'All the guys that are good and want to work are frigging working, that's all I can say. There's no shortage of work.'

David Hodgson, above, owner of a contracting business in Norman Wells, NWT

Conversation with. . .

Dave Ebner

Reporter Dave Ebner of The Globe's Calgary bureau answers your questions at 10:30 a.m. Wednesday on the $7.5-billion Mackenzie Valley pipeline project in a real-time, on-line discussion at globeandmail.com

Read the previous two stories in our three-day series on how the native tribes of the Far North both fear and eagerly await the start of construction on globeandmail.com/business.

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