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Canada pipeline panel wants its findings followed

* JRP says all 176 recommendations should be adopted

* Governments say many are outside JRP’s scope

* NEB decision on project seen late Nov or early Dec

CALGARY, Alberta, Oct 15 (Reuters) - A panel that studied the environmental and social impact of a C$16.2 billion ($16 billion) Canadian Arctic gas pipeline is rebuking Ottawa’s efforts to reject many of its recommendations in a dispute that is delaying the line’s regulatory decision.

In a lengthy letter to Environment Minister Jim Prentice’s office, Robert Hornal, chairman of the Mackenzie Gas Project’s Joint Review Panel, said the 176 recommendations in his panel’s key report must be preserved to prevent any adverse environmental and socioeconomic impact on the Northwest Territories.

The letter was in response to the governments of Canada and the Northwest Territories, which contend many of recommendations in the JRP report, issued late last year, are beyond the panel’s scope or are already being undertaken or considered outside the pipeline process.

Others would constrain northern development, they said.

“The panel has reconsidered all of the recommendations that the governments are proposing to reject on the ground that they were ‘outside the scope of the JRP’s mandate’ and in each case disagrees with the governments’ conclusions in this regard,” Hornal wrote in the letter dated Oct. 4. “The panel sees no reason to withdraw or modify any of these recommendations.”

The dispute is part of the final stages of the project’s review process, and is holding up the National Energy Board’s decision. It had been expected last month and is now targeted for late November or early December.

“We actually need the final approved governments’ response to the JRP report. We’ll be considering that as part of our final decision,” NEB spokeswoman Sarah Kiley said.

The Mackenzie pipeline is years past its initial timeline, having been through an epic regulatory process that began in 2004. Led by Imperial Oil Ltd IMO.TO, the pipeline would move about 1.2 billion cubic feet a day to Alberta from gas fields in the Mackenzie Delta on the Beaufort Sea coast.

Besides regulatory delays, the proposal has been hit by rising costs, falling natural gas prices and the prospect of competition from a much larger Alaska gas pipeline.

Earlier this year, Imperial and its partners pushed their sanctioning decision to late 2013.

On Dec. 30, the JRP issued its report, concluding the pipeline should be allowed to proceed, provided the proponents and governments follow 176 recommendations aimed at securing socioeconomic benefits and minimizing environmental damage.

The list is as diverse as analyzing the impact of climate change on facilities buried in permafrost, monitoring grizzly bear dens and assessing if alcohol and drug abuse programs in the sparsely populated region are adequate.

In his recent letter, Hornal said the panel was sticking to its assertion that the project would make a positive contribution, but only if all recommendations were implemented.

The JRP had previously criticized the governments’ desire to conduct the current exchange, called a “consult to modify”, on a confidential basis.

Imperial, having already issued its own response to the JRP, is not involved in the dialogue, company spokesman Pius Rolheiser said.

The other pipeline proponents are Royal Dutch Shell Plc RDSa.L, ConocoPhillips COP.N, Exxon Mobil Corp XOM.N and the Aboriginal Pipeline Group.

$1=$1.01 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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