Big Oil brings Yukon onto Mackenzie pipeline

The Mackenzie Gas Project is touted as the North’s most important dance between governments and Big Oil.

The Mackenzie Gas Project is touted as the North’s most important dance between governments and Big Oil.

Until now, the Yukon wasn’t invited.

After largely ignoring the Yukon for six years, the project’s proponents have recognized the territory’s role in building the pipeline.

The Yukon now has labour and business opportunity commitments from Imperial Oil, a major player in the Mackenzie Valley project.

“They hadn’t talked to anyone in the Yukon government since 2001, which was for about one hour,” said Ron Sumanik, acting executive director of oil and gas resources for Energy, Mines and Resources.

A letter from Imperial Oil makes several major commitments on behalf of the pipeline’s proponents in the areas of labour, transportation, and business opportunities.

 Yukon labour is second only to Northwest Territories when it comes to hiring priority, and above equally qualified people from the south.

“This is a great opportunity for skilled and unskilled Yukon workers,” said Sumanik.

“At the peak of construction it’s estimated an excess of 2,000 employees will be needed. The Yukon will be able to contribute to that.”

The oil companies believe the demand for labour created by the pipeline construction will exceed the supply of skilled workers anyway, said Imperial Oil’s letter.

Yukon businesses will also be considered “northern businesses,” allowing them to bid on pipeline contracts.

With an estimated four-year construction time, Yukon businesses could see a lot of benefit from the pipeline, said Yukon Chamber of Commerce president and CEO Dave Austin.

“When a project like this happens, there aren’t enough businesses in NWT or the Yukon to deal with what needs to be done,” said Austin.

“This establishes the Yukon as a major player in the project. Let’s not wait until we hear the construction equipment coming down the road, let’s be ready for it.”

The chamber will be making a concerted effort to be involved in the pipeline, including hosting workshops and organizing recruiting efforts.

“Even after the pipeline is built, there will be opportunities that exist after construction and we’ll see benefits from that, too,” said Austin.

The project’s proponents, who review social and environmental impacts of the pipeline, had previously declared the Yukon unaffected by the pipeline and did not include the territory in its studies.

Of the 97 interveners, the Yukon is one of two that have concessions prior to the panel finishing its report.

Proponents include Imperial Oil, ConocoPhillips Canada (North) Limited, ExxonMobil Canada, Shell Canada and Mackenzie Valley Aboriginal Pipeline Limited Partnership.

Even though the 1,220-kilometre-long NWT pipeline will not run through the Yukon, the massive construction project will impact the territory in several ways.

An estimated 3,400 roundtrips will be made through the Yukon by large trucks hauling equipment and resources to and from the pipeline.

Transportation costs on the environment and infrastructure will be high, argued the territory in panel hearings.

Another government concern, one that is immeasurable right now, is the social and health costs of a mega-project on Yukon residents, said Sumanik.

With more money floating around, there’s a real possibility drug and alcohol use will increase along with family violence.

The Yukon government has committed to monitoring these trends through the Health and Social Services department.

“We’ll try and determine if a link can be identified or tagged to the Mackenzie gas project, and take the necessary steps to mitigate those effects with the proponents,” said Sumanik.

About 80 per cent of Yukon interests have been met, said Sumanik.

The refusal of companies to identify a point of hire, like a permanent employment office in Whitehorse, is unacceptable right now, says the territory.

Proponents have agreed to hold one employment and procurement workshop.

“That’s not good enough,” said Sumanik.

“If you’re serious about wanting to facilitate northern hiring, a physical office combined with regular workshops is the best way to do it.”

Construction of the pipeline is expected to start in 2010 if approved by the National Energy Board. Work will end in 2014.

Most of the Yukon’s natural gas and oil reserves are in the Eagle Plains and Peel River plateau areas. Much of it is unexplored.

The pipeline could open up the area for more exploration and kick start development.

Chevron and Northern Cross have exclusive right to explore and develop parts of Eagle Plains, and Hunt Oil has similar rights for the Peel plateau.

A now-expired agreement signed by the Yukon and NWT in 2003 committed the two governments to work together on both the Mackenzie and Alaska Highway projects to benefit all residents, regardless of which pipeline went first.