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July 21, 2001 --- Vol. 7, No. 86July 2001

Chretien's slip ends Canada's pipeline neutrality; favors Mackenzie route

Canada's Prime Minister Jean Chretien ended his scrupulous neutrality on the routing of an Arctic pipeline.html'>gas pipeline Friday and started lobbying President George W. Bush to support a Mackenzie Valley route linked to the "over-the-top" option.

Picked up by an open microphone at the Group of Eight summit in Genoa, Italy, Chretien told Bush: "One pipeline ... we could save a lot of money."

Bush agreed, saying: "There's only so much capital."

Later, Chretien explained his unguarded remark by arguing there is Mackenzie Delta gas "we want to get to market. No doubt about it that there will be a pipeline in the Mackenzie Valley. It's the only way you can get gas from the Delta down to the market. There is no other way. There will be a pipeline there."

Chretien also said Bush "mentioned to me there was a third idea coming up ... so I said 'Wait a minute. We already have two (proposed) projects and if we had only one pipeline it's easier than two.'"

Although Chretien did not elaborate on Bush's third option, it was assumed by most observers to be the proposal for LNG shipments from Alaska to the Lower 48.

Northwest Territories Finance Minister Joe Handley said Chretien's comments will likely intensify the political dueling between NWT Premier Stephen Kakfwi and Yukon Premier Pat Duncan, who wants the Alaska Highway pipeline.

"It will cause a lot of people to react," Handley said, adding that Mackenzie Delta gas owners have now received the federal encouragement they need to push for a Mackenzie Valley pipeline.

Duncan said she has asked the Canadian government to remain "neutral" in the pipeline debate and doesn't yet believe Chretien is playing favorites.

"I don't read that into the prime minister's comments at all," she said. "The prime minister is very well aware of the Yukon and the Yukon's potential and the north in general."

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