Progress has been made in resolving some of the concerns that led to a shutdown in April of most of the work on the Mackenzie gas pipeline project an Imperial Oil spokesman said Monday.

"I have no hesitation in saying we're more encouraged today than we were back in April - there's been significant progress made on a couple of fronts," said Pius Rolheiser, an official with Calgary-based Imperial, Canada's biggest oil company and a backer of the energy project.

"We're not quite there yet but we believe by sometime in November we'll be in a position to get back to the regulators and see where we are at that point," he said.

Imperial, which is the lead on the Mackenzie project, along with partners Shell Canada (TSX:SHC), ConocoPhillips (NYSE:COP), Exxon Mobil Corp. (NYSE:XOM) and the native-owned Aboriginal Pipeline Group, were initially hoping to have the pipeline up and running by the end of the decade.

But last April, the energy companies said they were shutting down most of the work on the line, saying they were being asked to pay "hundreds of millions of dollars for social programs and land access rights that the various governments should be covering.

Rolheiser's comments came as an industry report Monday warned that a two-year delay in major natural gas pipeline and terminal projects might cost Canadians $57.7 billion between 2006 and 2025.

The impact would be strongest in Alberta and Ontario, where the cost of gas to consumers would rise by $20.2 billion and $19.1 billion respectively, according to the report released Monday by the Canadian Energy Pipeline Association, which represents pipeline companies that transport almost all the natural gas and crude oil produced in Canada.

The study projects the effect of a two-year delay in construction of the Mackenzie Valley pipeline, Alaska gas pipeline and new liquefied natural gas terminals.

"More than $20 billion will be spent over the next two decades by our industry on capital projects. These studies show that the impact of any delays is significant," said pipeline association president David MacInnis.

Imperial hadn't analyzed the results of the study but said there's no argument it would be beneficial to have the pipeline proceed sooner rather than later, said Rolheiser.

"The report is helpful in the fact that it highlights the breadth of benefits that would result from additional natural gas development in Canada," he said.

"In its broad strokes it's consistent with what the project's been saying all along-that additional natural gas development is good for a wide variety of people."

The consortium is expected to let regulators know in November whether it will be ready to proceed with the next stage of the project. But despite the progress made nothing has been totally resolved.

"There still remains significant work to be done on both the negotiation of benefits and access agreements and on the fiscal framework," Rolheiser said.

"There's discussions ongoing with the federal and territorial governments but there has been progress made on the clarity on the regulatory process with both the National Energy Board and the Joint Review Panel," he said.

There's also been progress made on some socio-economic matters after $500 million in funding from Ottawa to regional aboriginal groups in the Northwest Territories, said Rolheiser.

North America is in a tight spot for natural gas supply so having access to vast reserves in the Arctic is important, said Wilf Gobert, an energy analyst with Peters and Co. in Calgary.

"The only thing that is going to match energy supply with demand is price," he said.

"The Mackenzie Delta and Alaska for that matter would appear to be the two most probable sources."

Despite the cost of delays Gobert said the northern gas is still going to be viable in the future.

"I think it will always be worth doing it's just the sooner (it's done) the greater the benefit analysis is," Gobert said.

Canadian Press