(EDITOR'S NOTE: In the interests of providing a balanced and open forum for discussion about the MGP, we have included a copy of the letter sent to the Chairman and CEO of Exxon Mobil from the Sierra Club. While most industry representatives are dismissive of their claims, and generally skeptical about the sources of information, it is necessary for readers to balance the concerns expressed in the letter, with the economic prospects such a project like the Mackenzie Gas Project could bring to isolated Northern communities.)

October 31, 2005

Mr. Lee Raymond
Chairman and Chief Executive Officer
Exxon Mobil Corporation
5959 Las Colinas Boulevard
Irving, TX
75039-2298
USA

Dear Mr. Raymond:

Sierra Club and Sierra Club of Canada understand that you will soon choose between the Mackenzie Gas Project and the Alaska Natural Gas Pipeline Project.

Your decision could well be of fundamental importance to the people and ecology of northwestern North America as well as the shareholders of Exxon Mobil, your Canadian subsidiary Imperial Oil, and partners such as Shell and Conoco-Phillips.

We wish to take this opportunity, then, to explain why Sierra Club and Sierra Club of Canada take the view that Exxon Mobil should abandon the Mackenzie Gas Project (MGP), perhaps in favour of advancing the Alaska Natural Gas Pipeline Project:

· Less damage to boreal ecosystems - The Alaska natural gas pipeline would be much longer than the Mackenzie Valley pipelines and carry three times as much gas, but is likely to cause less ecological damage. This is partly because the rights of way for the likely routes of the Alaska natural gas pipeline are already established along the Alaska oil pipeline and the Dalton, Richardson and Alaska Highways. The Mackenzie Valley pipelines would pass through intact boreal forest and taiga along much of their length and hence would cause greater ecological fragmentation, not to mention harm caused by induced development along the pipeline route.

· Less harm to the global atmosphere - Alaska gas would mainly be shipped to U.S. customers to heat homes and generate electricity, whereas Mackenzie gas would be used mainly to increase oil production from the Alberta tar sands. Alaska gas could conceivably serve to reduce North American greenhouse gas emissions by displacing the use of coal and oil, whereas Mackenzie gas used to produce tar sands oil would result in large increases in Canada’s greenhouse gas emissions.

· Subsidies to Imperial Oil are highly controversial – As you know, Imperial Oil is seeking a reported CDN$2 to $3 billion in financial subsidies from the Government of Canada for the Mackenzie Gas Project. A Canadian government promise of any subsidy to Imperial Oil would be extremely controversial with the Canadian public, coming at a time when oil companies operating in Canada are fabulously profitable and Canadians are facing dramatic increases in the costs of heating their homes and operating their vehicles. Indeed, if the budget includes this subsidy, the government may have difficulty passing its spring 2006 budget, given its minority position in the House of Commons. As you know, the United States Congress has already approved a large subsidy for the Alaska Natural Gas Pipeline Project.

· Incompetence of Imperial Oil - Your Canadian subsidiary, Imperial Oil, has shown itself to be singularly inept in preparing the environmental impact statement and managing the public participatory process for the Mackenzie Gas Project. There are numerous environmental issues that Imperial Oil has failed to address satisfactorily in its environmental impact statement. The upcoming Joint Panel Review and National Energy Board hearings will provide an opportunity for full, public discussion of these issues before independent arbiters who are not subject to political direction by elected officials.

· Uncertainties - Given the opposition of many environmental groups and First Nations in Canada to the MGP and the errors committed in the early stages, you and your shareholders should not discount the potential for litigation in Canada, which could result in project delays and additional costs.

Sierra Club, Sierra Club of Canada and the other signatories of the Mackenzie WILD Declaration (see www.mackenzieWILD.ca for details) oppose the proposed Mackenzie Gas Project and the oil and gas industrialization of the Mackenzie watershed that it would trigger. Imperial Oil and the federal and Northwest Territories governments have attempted to portray the Mackenzie Gas Project as matter of local or regional interest. Growing numbers of Canadians and Americans understand that there are important continental and global issues at stake as well, including climate change, destruction of boreal ecosystems and loss of biodiversity. We are gearing up for a major campaign against the Mackenzie Gas Project in 2006, whether or not the Canadian government provides additional subsidies to Imperial Oil. In our view, the Mackenzie Gas Project is simply bad for Canada’s North and bad for North America.

Finally, we wish to emphasize that Sierra Club and Sierra Club of Canada do not endorse the Alaska Natural Gas Pipeline Project although we do recognize that it may be the lesser environmental evil. There are significant environmental and regulatory issues, as well as indigenous community concerns in Alaska and Canada that must be addressed before that project could proceed. If the Alaska Natural Gas Pipeline Project is to proceed:

· A rigorous environmental and social impact assessment (ESIA) must be undertaken for both the Alaskan and Canadian segments of the project;

· Impacts on local communities and traditional lifestyles must be minimized and basic human rights to a clean, safe, and healthy environment respected;

· Wilderness frontier areas must not be crossed; and

· The Arctic National Wildlife Refuge and other sensitive Arctic areas must remain off limits to natural gas development.

We would be pleased to discuss with you in more detail our concerns with the Alaska Natural Gas Pipeline Project. In the interim, a decision by Exxon Mobil to shelve the expensive and ecologically devastating Mackenzie Gas Project for the foreseeable future would be a step in the right direction.

I look forward to your reply, as well as your decision.

Sincerely,

Elizabeth May
Executive Director
Sierra Club of Canada

Carl Pope
Executive Director
Sierra Club

Elizabeth May & Carl Pope