By the end of this week, backers of the Mackenzie gas project are due to tell Canada's energy regulator, the National Energy Board, whether they are ready to move forward with public hearings.

The event will be watched with interest. A positive response would signal that the stalled $7-billion venture is finally back on track. A negative response will likely mean more delays as various stakeholders continue to hold out for better terms.

The deadline -- Nov. 18 -- was set by the NEB so it could have time to organize pre-hearing conferences before Christmas and launch eight to 10 months of hearings in the new year in dozens of locations across the Northwest Territories and in Calgary.

It's not a good sign that Imperial Oil Ltd., leader of the 1,220-kilometre line that would bring to market vast Arctic gas reserves, was talking down the date late last week.

"Unfortunately, this Nov. 18 date has taken on the appearance of a deadline and there is a big expectation that there will be some big announcement made that day, and that is not necessarily going to be the case," said spokesman Pius Rolheiser. "There is a range of scenarios. This may not be a big announcement, so don't be disappointed if it's a further communication between the Mackenzie gas proponents and the board" that the proponents need more time.

Actually, another deferral would be a disappointment, particularly because of a looming federal election that could once again remove Ottawa's focus, turning even a minor delay into a major one.

Here's a thought: An imperfect project is better than no project at all, so get on with it.

The problem with this pipeline has always been one of unrealistic expectations. It's a big project, but it will not solve all the problems of Canada's North. It will not enrich oil companies without risk. And after years of neglect, Ottawa cannot expect it to turn into a cash cow under a perfect fiscal framework so late in the game.

"You just hope that cooler heads prevail and that everybody realizes that there is too much to be gained here to not do the project," said Brendan Bell, the N.W.T.'s Energy Minister.

Some of the wildest expectations are in the aboriginal community. While it's understandable they're playing hardball to wring long-overdue economic benefits and federal government spending, some are under the mistaken impression that the pipeline needs them more than they need the pipeline.

Aboriginals affected by this project have already done extremely well. They obtained a pledge from the federal government for $500-million for social programs over 10 years.

The Deh Cho, one of the five communities along the pipeline route, squeezed $31.5-million in payments for economic development in exchange for ending litigation related to the project.

They will benefit through the Aboriginal Pipeline Group, an enterprise created with the help of the oil companies that could earn a one-third interest in the pipeline and considerable dividends. For example, if the pipeline moves 1.2 billion cubic feet of gas daily, the APG will collect cash dividends of $20-million a year.

Aboriginals will further gain from benefits agreements with oil companies in exchange for allowing them access to their lands, as well as huge economic spinoffs. That's still not enough for some. The Deh Cho also wants the right to charge property taxes.

They could end up losing everything if they go too far. There's renewed talk, if the Mackenzie pipeline doesn't move forward, of linking the Mackenzie Delta gas reserves to the proposed Alaska gas pipeline, which is gaining momentum, by building a relatively small connection through the Beaufort Sea known as a "reverse-over-the-top" route.

The other group with unrealistic expectations is the oil companies. Imperial, and partners ExxonMobil Corp., ConocoPhillips and Shell Canada Ltd., claim the project is uneconomic as it stands and are looking for reduced royalties and taxes said to be in the $1.2-billion-to-$2-billion range. They want a fiscal regime similar to those in the oilsands, where developers pay a 1% gross revenue royalty, which rises to 25% once the total investment is recovered.

It's a bad time for oil companies to look for breaks. They're making embarrassingly high profits and there's rising public outrage that they are not investing enough across their business to boost supplies, thereby contributing to high prices. If they can't make this work now, then when?

Besides, the oilsands regimes were put in place when the sector was a deadbeat. The booming natural-gas business in North America hardly needs help. The Canadian and the U.S. arctic are the only new significant sources of gas supplies on the continent.

The other unrealistic bunch is in Ottawa. Negotiators are frantically at work to sort out all kinds of agreements to pave the way for the pipeline -- on fiscal terms with the oil companies, on devolution with the Northwest Territories so it has control over its lands and resources, while aboriginals are clamouring for attention on complex issues such as self-governance.

Ottawa stands to gain a lot from this project. Imperial has estimated the federal government will collect $1.9-billion in taxes during the four-year construction phase, and then taxes and royalties of $8.7-billion during its life of 20-plus years.

Yet the federal government has done little to facilitate the project until recently. Problems like devolution and land claims should have been handled years, if not decades, ago, but were not a federal priority because there were no votes to be gained. Now, Ottawa is scrambling for politically acceptable quick fixes -- or risk the embarrassment of watching the rival, U.S.-led Alaska pipeline move forward first, potentially making the Mackenzie pipeline redundant.

Claudia Cattaneo, Financial Post