Yukon-NWT still at odds: leaders have a different view of Arctic pipeline timing

Gary Park

Petroleum News Calgary correspondent

A thaw in once-chilly relations between the Yukon and Northwest Territories has stopped short of a love-in.

The premiers of the two northern territories left no doubt at an Arctic Gas Symposium in Calgary March 8 and 9 that they sit at polar opposites when it comes to whether the Mackenzie Valley or Alaska Highway gas pipeline should be built first.

Northwest Territories Premier Joe Handley was emphatic that the Mackenzie project should be built first, fearing that opening up the North Slope for deliveries of 4-5 billion cubic feet per day could swamp the market, drive down prices and undermine the Canadian pipeline.

Yukon leader Dennis Fentie objected to giving priority to one pipeline over the other, arguing that the challenge is to “make sure they both get built.”

That sign of tension was a flashback to a couple of years ago when then premiers — Pat Duncan of the Yukon and Stephen Kakfwi of the Northwest Territories — were constantly at loggerheads over the timing of the mega-projects.

Handley also expressed concern about delays in the regulatory phase that could delay the Mackenzie pipeline beyond 2009.

He said the “market is there, the demand is there, the supply is there,” but slowing the environmental review process could see the Mackenzie Delta producers scrap the project.

Randy Ottenbreit, Imperial Oil’s development executive with the Mackenzie Gas Project, said the review was taking longer than anticipated and could extend the regulatory filings by a few months.

On another front, Handley expressed concern that the labor-hungry oil sands sector in Alberta poses a challenge for the Mackenzie Valley project.

“I don’t think you can afford to delay this pipeline because of a shortage of labor,” he said.

Other industry sources have suggested that a bigger problem would come from any decisions by Enbridge or Terasen to proceed with multi-billion dollar pipelines from the oil sands to the British Columbia coast.