NEWS BULLETIN

July 12, 2001 --- Vol. 7, No. 78July 2001

U.S. officials avoid pipeline politics; say choice is up to market

U.S. government officials steered clear of choosing between the Alaska Highway and Mackenzie Valley gas pipeline routes in a teleconference with Canadian journalists Wednesday.

"We would not want to get involved in internal Canadian issues," said James Dudley, an economist for international energy issues with the State Department.

Karen Knutson, deputy director of the National Energy Policy Development Group that crafted the Bush administration's continental energy plan, said the language was carefully chosen to avoid selecting a pipeline route.

She said the market will decide which option is best.

Knutson, who was raised in southern Alaska, said the United States will look to Canada which shipped about C$40 billion worth of oil and gas last year south of the border to help ease its long-term energy needs, but emphasized that Canada is only a part of the puzzle.

She said the United States "will never be energy independent (because) our demand is just too great." The United States will always have a global aspect to its energy policy and will strive never to depend too much on one foreign sources, whether it's Canada, Mexico or the Middle East.

She said Washington is also looking to the Caspian Sea and Africa as other alternatives to OPEC as a source of oil.

U.S. Ambassador to Canada Paul Cellucci told the teleconference the Bush administration would like Canada to speed up approval for new energy projects, such as major pipelines.

He referred to a "NAFTA-plus" concept, saying Canada, the United States and Mexico should build on the successes of their free trade agreement to create a more integrated North American energy market.

Although no formal negotiations have taken place, a U.S. "technical team" will be in Ottawa next week for consultations.


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