Northern Frontier Explorers Largely Disappointed

Since the recommendations for the FOOTHILLS (YUKON) or Alcan Pipeline Project were handed down by the NATIONAL ENERGY BOARD, late Monday, afternoon, the "Daily Oil Bulletin" has contacted and obtained comments from a number of companies that have been most instrumental in developing natural gas reserves in the MacKenzie Delta during this decade. Shortest of comments to date was received from the President of Gulf Oil, coexplorer and developer of the Parson's Lake field. Mr. STOICK, PRESIDENT of Gulf Canada in a telephone interview with a leading eastern Canadian paper commented that "We have to remind ourselves that the recommendation is only a recommendation. The final decision is up to the Cabinet. We have a big investment in that area that will have to remain land locked. and we are very disappointed."

The word "disappointed" just about sums up the feelings of the majority of those companies with direct interest in the Delta discovery area. And while a note of optimism was reflected in the fact that the final decision will still have to be made by the federal government by September 1, 1977, it would seem unlikely that a major reversal or major changes to the N. E. B recommendations would be made, which would affect the credibility of the Board. However, at this point there appears to still be many "ifs" on the horizon.

The sketch map on today's front page shows the pipeline route proposed by Alcan-Foothills (Yukon) group as submitted in its application before the National Energy Board. As noted in the Board's decision of July 4th, the pipeline backers will have to investigate a link up of Delta reserves later this decade to the proposed facilities. However, this suggested link up route is not highlighted on the map.

SHELL CONCERNED WITH UNCERTAINTY OF DELTA LINK

SHELL CANADA LIMITED is disappointed that the National Energy Board has recommended against the application of Canadian Arctic Gas to transport natural gas to consumers in Southern Canada along the MacKenzie Valley Route. J. M. MACLEOD, SENIOR VICE PRESIDENT, said, "We are concerned that while the decision of the NEB recognizes the need for gas supplies from the MacKenzie Delta by 1985 at the latest, it leaves in a state of uncertainty the timing, development and accessibility of those reserves for Canadian energy needs.

"The Board's decision assumes that the Dempster Connection will link Delta gas reserves with Canadian markets," Mr. MacLeod said. "However, that connection is: as yet unstudied in terms of the environmental and socioeconomic ramification which troubled the Board about the Arctic Gas Project.

"In our view, the Alcan Dempster scheme will result in higher natural gas delivery costs, make MacKenzie Delta reserves economical and may indeed jeopardize their eventual development."

Mr. MacLeod concluded, "The uncertainty created by delaying a decision on the link for Delta gas will efforts and ability to explore for, develop and make available a vital, known frontier energy resource."

IMPERIAL TO CONTINUE DELTA/BEAUFORT EXPLORATION

In its endorsement of the FOOTHILLS (YUKON) proposal the NATIONAL ENERGY BOARD, clearly recognizes the need for new energy supplies in southern Canada in the early 1980's, and identifies the gas from the MacKenzie Delta and the Beaufort Sea as the earliest and cheapest new source of energy. IMPERIAL OIL LIMITED has argued these positions for some years and the company is gratified to see them accepted by the N. E. B. The Foothills (Yukon) endorsation introduces a number of uncertainties for imperial Oil particularly in the timing and transportation costs of connecting the reserves in the MacKenzie Delta and Beaufort Sea to the main Foothills (Yukon) Line. In the interests of supplying needed energy fox Canadians, it is essential that these uncertainties be resolved as soon as possible inhibit industry's

Imperial has supported the pipeline proposed by CANADIAN ARCTIC GAS PIPELINE LIMITED as the most efficient way to deliver Canadian Arctic Gas to Canadian Markets. The N. E. B's endorastion of the Foothills (Yukon) proposal is not the final decision. The government of Canada will have to consider the N.E. B. report along with all other information available in order to come to a decision that will be in the best interests of all Canadians.

Imperial has an extensive exploration program in place for the MacKenzie Delta and Beaufort Sea, and the company's plan is to continue program for the immediate future.

DOME ANTICIPATES NO INTERFERENCE WITH PRESENT PLANS

Throughout the NATIONAL ENERGY BOARD MACKENZIE VALLEY PIPELINE hearings, DOME PETROLEUM spokesman commented that the company had taken an impartial position regarding the competing applications. The company supported however, the basic concept of a pipeline along the MacKenzie River Valley (without taking a position as to which consortium should construct it) to enable relatively small reserves which may be discovered in this area to be economically gathered and produced.

Dome does not feel that there will be any interference with the company's BEAUFORT SEA plans, as any discoveries there would be few production. As well, Dome feels there may be alternate methods for transporting petroleum hydrocarbon from the Beaufort Sea other than by pipeline.