Despite low natural gas prices, and a bungled regulatory process, not everyone has given up hope on the Mackenzie Valley Pipeline.

TransCanada's chief executive, Russ Girling, made that very point last week as he addressed a group invited by the University of Calgary's School of Public Policy that coincided with TransCanada's announcement of a $1 million gift to the School.

The money establishes a TransCanada Corporation Program in Energy Policy & Regulatory Frameworks aimed at improving the current regulatory framework not just in Canada, but also across North America.

Given the failed regulatory process associated with the Mackenzie Valley Pipeline, and TransCanada's indirect exposure to the project through its funding of the Aboriginal Pipeline Group, it's no small wonder the company has stepped forward.

The question is why something like this took so long in getting off the ground.

Talk to anyone in the energy sector these days and if there is one issue where the concern is unanimous it is on the subject of regulatory policy and efficiency.

And as the MVP issue clearly shows, inefficient regulation comes with a huge economic cost - both in terms of the actual dollars spent, as well as missing the opportunity to generate a significant economic benefit.

When the MVP was first put on the table, the shale gas boom had yet to manifest itself; there was arguably a window where gas prices were high and financing was available. Today, in the current circumstance, it's tough to make the argument MVP makes any sense at all.

Not necessarily, according to Girling.

In fact, if one factor in the amount of natural gas consumed in the oilsands and the decline rates of both the conventional and unconventional natural gas plays, there is a case for not only MVP to go ahead - under a new commercial construct - but also the Alaska pipeline.

In the case of the MVP, one of the pieces to still fall into place is what the federal government will ultimately do in terms of a fiscal arrangement, if it does anything at all.

Let's think about that for a minute.

Throughout Canada's economic history there have been choices made - with government support - in order for certain infrastructure projects to proceed. We can cast back to the decision to build the national railway - which was also a condition of British Columbia entering confederation.

It might not have made economic sense at the time, but the leaders of the day were prepared to look beyond the horizon and move ahead with a project that has been critical to this country's economic growth.

Another such point was the Great Pipeline Debate in 1956 that ensued in parliament and centered the building of the TransCanada pipeline.

In order for the pipeline to proceed, the federal government passed a bill that authorized the building of the pipeline, as well as a loan to cover a portion of the construction. The result was the pipeline infrastructure Canadians depend on today.

Think back too, to when the Hibernia field was being developed offshore Newfoundland.

As Canada's first offshore oil project it was complex and expensive. And despite the involvement of the private sector, the federal government provided $1 billion in grants, guaranteed $1.7 billion in loans and later took an 8.5 per cent stake in the $5.8 billion project, which it still holds. When it came on production in 1997, oil prices were at $19 US per barrel; making money from Hibernia was still a question being asked. Today, of course, all this is moot. Hibernia has made money, opened up other offshore opportunities and is estimated to contain more than twice the barrels originally thought.

Which brings us back to the MVP.

To be sure, there are many reasons that can be found for the MVP not to go ahead - be it cost, the current uncertainty for natural gas demand, shale gas supply or proximity to market. But it's not today that anyone is talking about. This is about 10 years - or more - down the road. What if the federal government decided to reach back into its history and look at the precedents that were set in the last century and acknowledge that without the support of previous governments, the national railway, a trans-Canada natural gas pipeline or Hibernia's oil production might never have happened' were that the case this country's economy would likely have developed in a much different fashion.

Maybe, just maybe, the MVP is another such marker in Canadian economic history. It might not make sense in today's terms - but this is about the future, especially if one thinks in terms of energy security. In establishing the regulatory and public policy program at the University of Calgary, TransCanada is looking to ensure the regulatory failure of the MVP, or other similar projects, does not happen again. For its part, it's time for the federal government to think beyond the next election - and support what's good for the country, not just short-term political fortunes.

dyedlin@calgaryherald.com