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January 19, 2005 --- Vol. 11, No. 6January 2005

Canadian government will choose between Northern Pipeline Act and greenfield approach ‘very soon,’ Efford says

The Canadian government has started reviewing 1978 legislation governing the Canadian portion of an Alaska natural pipeline.html'>gas pipeline, hinting for the first time that it does not feel bound by that 27-year-old act.

Natural Resources Minister John Efford said he will take a proposal to the federal cabinet within two weeks and “make that public very, very soon.”

He told a news conference in Calgary Monday that two options are on the table: The 1978 Northern Pipeline Act, which stemmed from 1977 Canada-U.S. treaties and gives TransCanada exclusive rights to build and operate the pipeline within Canadian territory, or a move to treat the pipeline as a greenfield project.

The act also spells out a regulatory process to handle a pipeline application.

Unless there is a compromise deal by governments on both sides of the border, the North Slope gas owners and Canadian pipeline rivals TransCanada and Enbridge, it is widely expected that a Canadian government decision favoring either option would lead to court challenges.

Efford, although saying he personally leans towards the Northern Pipeline Act because of previous government commitments, indicated his priority is to “provide clarity” that will result in the fastest approval possible for a pipeline.

“The United States is looking for clarity and we must provide clarity,” he said, noting that billions of dollars of investment in Canada are at stake.

Efford said the Canadian government will look at whatever means are needed to move the file forward.

Editor’s note: See complete story in Jan. 23 issue of Petroleum News.

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