RANDY HENDERSON, CBC North: A delay in building the Mackenzie Valley pipeline could cost consumers billions of dollars. That's the opinion of the Canadian Energy Pipeline Association. In a report this week, the association says even a two-year delay in bringing new sources of gas to market could cost $58 billion. David McInnis (?) is president of the pipeline association, and he joins me on the line, from Ottawa. Good morning.

DAVID MCINNIS (Presiden, Canadian Energy Pipeline Association): Good morning. How are you?

CBC: I'm good, thanks. Can you tell us why are you concerned, first of all, that the project may be delayed?

MCINNIS: Well I guess the concern comes, Randy, in that with the complex regulatory nature, with the fact that on the fiscal side, taxation, et cetera, that there is a lack of competitiveness with the U.S. and other jurisdictions. There are negotiations going on with First Nations, which are proceeding quite nicely, though. Any delay, further delay, is going to impact the pocketbooks not just of northerners who are going to be the ones that most benefit from the job creation, but also it's going to impact the pocketbook of folks in the rest of Canada in the form of higher natural gas prices. And also there are a lot of indirect jobs that the Mackenzie project would create, and a lot of those jobs are going to be in Ontario, or Nova Scotia, Alberta, B.C., et cetera. And those folks are not going to realize those benefits as early as they should.

CBC: Now your report does focus on a two-year delay. How did you come up with a two-year delay?

MCINNIS: Well, basically, you take a look at how long it takes to get through the regulatory process, construction process, et cetera. We have come up with a two-year delay because it's most likely that that's the length of time the setbacks that we're facing will impact us. I think what we'll see is, you know, one could argue -- and some have, after seeing our report -- that we've actually already seen delays in the Mackenzie project moving forward. The federal government has come up with the $500 million for social spending, for example, for First Nations in the area, and that's very important, but it should have happened earlier. The regulatory process is that the federal government have been able to control, you know, should have been streamlined sooner than they have. So one could argue that we've already seen, perhaps, a two-year delay over the original scheduled proposal, and, as such, we could have already borne the costs that are outlined in our study.

CBC: Mr. McInnis, how did you come up with the figure of $58 billion that could be lost to consumers? How did you arrive at that?

MCINNIS: Basically what we did, we took a look at the Mackenzie and Alaska projects; we took a look at the liquefied natural gas projects that are being proposed for Canada; and they all have various implementation dates spreading out over about the next 10 or 15 years. We took at look at these, at what delays would do, and the problem is that if you delay a project by two years, there are some follow-up effects. The project will be that much slower to come on stream, the natural gas will come into the system that much more slowly, and during that whole time, Canadians are paying for a higher price for natural gas to heat their homes, et cetera.

CBC: So what's the remedy?

MCINNIS: Well the remedy right now, with respect to Mackenzie and Alaska and to L and G projects, is to improve the efficiency of the regulatory process. As you know, in the Northwest Territories, there are a little over two dozen regulatory agencies to deal with for the Mackenzie project. Alaska faces a complex regime of regulators, as well. So we need to make that regulatory process more efficient. We need to complete with, for example, on the Alaska project where the U.S. government has given that project an accelerated depreciate rate. The Canadian government should be looking at a similar move for a Canadian pipeline development, to keep us competitive with U.S. companies and firms. Because we're all looking to attract the same source of capital to build these various projects, and, at the end of the day, the country with the most efficient tax regime is where investors will decide to put their money.

CBC: Mr. McInnis, thanks so much for joining me this morning.

MCINNIS: You're welcome.

CBC: Bye bye now.

MCINNIS: Bye now.

CBC: David McInnis is president of the Canadian Energy Pipeline Association.

Randy Henderson - CBC North