MGM Energy Corp MGMCF

RE: Big Changes happening in Regulatory Regime

[geodude13]

Good summary but there are other unknowns. The project will need to address several additional items that were not covered in your summary.

1. The largest is the associated gas and how it will be managed. There most likely will be far too much natural gas associated with the oil and flaring will not be allowed. Even if the gas is directed to local infrastructure that replaces the current oil or diesel based power generation there still will be excess gas. There is no identified way of storing the gas for future take away. The MVP is the answer but who knows when that will constructed. A parallel gas pipeline would need approval and could be fast tracked if it was to follow the current disturbance but that could take several years.
2. The development intensity would at some time trigger an environmental review as there are a number of environmental triggers in the north. Water is the first but there are so many SARA triggers that are unavoidable. Waste management will also need to be addressed as the current long haul to Alberta may not be sustainable.
3. A bridge over the MacKenzie at Norman Wells or Tulita is at least a decade away...the recently opened Deh Cho bridge crossing took 12 years and there was a huge humanitarian driver not just a resource play. The geotechnical issues would be a three year study at least. The funding formula would take two and the construction would take three to four years.

https://en.wikipedia.org/wiki/Deh_Cho_Bridge

4. The socioeconomic evaluation would be politically charged and likely open festering aboriginal rights and treaty wounds. The current development plan is small and below the radar. If this becomes a large public play the big NGOs will see opportunity to make hay on the issue and escalate the engagement process; it wouldn’t go very fast.

Ideally, if I were representing big oil strategize small cumulative infrastructure development that does not trigger major environmental reviews. However the smaller cumulative developments would open opportunities for making stepped and disciplined advancements in infrastructure that could lessen the impact of environmental review once it were triggered; that is follow existing disturbances verses large new cuts. I think you’ll see a more disciplined approach by a few majors as they know the process. They’re already doing work on regional hydrogeological studies; they’ll step out into air shed assessments and then coordinate the biodiversity monitoring programs; if the oil is there you’ll see a push for a regional plan similar to what developed in the lower Athabasca region of Alberta. The federal government is trying to develop a process form the Joint Oil Sands Monitoring Program so any regional studies will largely follow a similar process.

The real issue will be scale and intensity if the play is prolific; if the development overwhelms the capacity for federal, territorial or regional government to manage the development, it’ll trigger a major assessment which in turn will curtail development and make the play a NGO showcase opportunity. It’s up to the majors to manage the circus and not make it a another major resource development with politically-charged assessment of responsible northern development or another plank in aboriginal treaty rights negotiations.

Regards,