Robert_Reid_Presentation

Mackenzie Valley Aboriginal Pipeline LP a proud partner in

The Mackenzie Gas Project

IPAC 2011 National Conference August 28 - 31, 2011

Victoria, BC

•  Original Proposal to develop the Mackenzie Delta basin dates back to the early 1970’s

•  Public Hearings held under Justice Berger •  Aboriginal Groups opposed construction of the

pipeline •  No Land Claims in place

•  In 1977, Justice Berger recommended a 10-year moratorium on development:

•  The Aboriginal communities were not ready, and would not be able to capitalize on the long-term financial benefits

•  During the mid 80’s, IPL (now Enbridge) constructed the Norman Wells Oil Pipeline to Alberta

•  Offered 10% Carried Interest: Declined

•  No long-term ownership benefits to Aboriginal Communities

•  During the 80’s and 90’s, three of the four Aboriginal Groups along the ROW settled their land claims

•  These settlements resulted in investments in successful aboriginal corporations and joint ventures

•  Economic Development became a priority

•  In January 2000, the Aboriginal Leaders of the NWT met in Fort Liard

•  If another pipeline is built in the Valley, Aboriginal people want to be a part of it

•  Agreement was reached on a vision:

“To maximize Aboriginal ownership and benefits from a Mackenzie Gas Pipeline”

•  APG is the result of that vision

•  APG began discussions with the Delta Producers in July 2000 - over four years before the current regulatory application was filed

•  These discussions successfully led to:

•  An MOU with Producers: June 2001

•  A Funding & Participation Agreement: June 2003

•  APG is a business investment, negotiated by Aboriginal people for Aboriginal people

•  Our mandate is to maximize the long-term financial return to the Aboriginal Groups of the NWT through ownership in the pipeline

•  Today, we have secured a one-third ownership interest in the Mackenzie Valley Pipeline

Our Shareholders are…

•  The Gwich’in Tribal Council

•  The Inuvialuit Regional Corporation

•  The Sahtu Pipeline Trust

Mackenzie Valley Pipeline

APG – 33.33 %

Imperial Oil – 34.4%

ConocoPhillips Canada – 15.7%

Shell Canada – 11.4%

Exxon Mobil Canada – 5.2%

Ownership Through the Pre-Development Phase:

•  Has a seat on the Board of the MGP

•  Participates in all project committees

•  Has a direct voice in the development of this major project

As a Full Partner, APG

…for as long as gas flows through the pipeline

•  Once the pipeline is completed, APG will pay meaningful long-term dividends to its stakeholders…

This Pipeline enjoys strong support from its Aboriginal Shareholders

Planning a thorough

regulatory process •  Land Claim Settlements resulted in transfer of EIA

responsibilities to a number of local regimes. •  Potential problem for a linear project

•  Fourteen agencies with EIA and regulatory mandates requiring a public hearing began meeting in Nov 2000 •  Objective was to create a coordinated EIA and

regulatory process for linear projects •  Avoid duplication between agencies •  Provide clarity and certainty for the public and

potential proponents •  Result was the Cooperation Plan, published June 2002

•  Two years prior to filing of the Application for the Mackenzie Gas Project

A regulatory process not to be repeated

•  Regulatory Application filed October 2004 –  Two parallel reviews: NEB & JRP

•  Public hearings commenced January 2006 –  Hearings took place in 27 communities

•  NEB Hearings completed December 2006 –  NEB proceeding adjourned waiting for JRP Report

•  JRP Hearings continued until November 2007 –  JRP Report finally issued in December 2009

•  NEB Approval - Dec 2010; CPCN March 2011 –  Over 6 years from application to approval –  More than triple the time anticipated by

Cooperation Plan

•  The JRP was a great opportunity for a northern panel to show they were up to the challenge of undertaking a “made-in-the-north” review for a major project.

•  In my opinion, three fundamental errors were made: •  The panel was established as an independent

panel - administratively accountable to no-one •  The panel was paid by the day with no budgetary

constraints •  Previous experience in a complex regulatory

process should have been a requirement for panel members

what went Wrong?

Q1 2010 – Regulatory Process concluded

Q4 2011 - Fiscal Framework concluded •  Financeable for APG •  Economic for Producers

Q1 2012 - Decision to Restart (re-staffing, engineering, field programs, local permits)

2014 - Owners Decision to Construct

2019 - First Gas

project schedule (Best Scenario)

•  Local service industries prepared but waiting •  equipment sitting silent, new hotels and restaurants empty

•  Regional workforce trained but idle •  Aboriginal people involved in 4 years of skills and employment

programs – waiting for pipeline completion •  Project provides huge economic stimulus for the future

of the Mackenzie Valley •  $500M Social Economic Impact Fund •  $1B in set-aside work for corridor groups •  Over 7000 jobs in NWT during construction •  ~150 permanent full-time positions with the main pipeline and

anchor fields •  Annual APG dividends in excess of $20 million

The MGP will generate economic independence and self-sufficiency, displacing present dependence on

Government programs

is ready The North

•  GDP benefits of over $100B to Canada

•  Tax revenue of over $10B to Federal, Provincial and Territorial governments

•  Attaches a new Canadian gas supply basin to the North American Pipeline grid

•  Supports and strengthens Canada’s priority for Arctic Sovereignty

•  Supports Canada’s course in reduction of greenhouse gas emissions

•  An all-Canadian project, that will deliver the clean energy we need in an environmentally responsible manner, creating jobs and economic opportunities for all of Canada

good for the north And For All of Canada

Duane Smith Board Member Inuvialuit

John Louison Board Member Sahtu

Fred Carmichael Board Chair Gwich’in

Board of Directors

APG’s

Nellie Cournoyea Board Member Inuvialuit

Charlie Furlong Board Member Gwich’in

John Tutcho Board Member Sahtu