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Vol. 10, No. 41 Week of October 09, 2005
Providing coverage of Alaska and northern Canada's oil and gas industry

Imperial not backing down

NWT worries about Alaska gas project; aboriginals press for pipeline tax

Gary Park

Petroleum News Canadian Contributing Writer

Despite a warning from the Northwest Territories government that the venture could be in trouble, Imperial Oil is unwavering in its commitment to the Mackenzie Gas Project.

Exactly how committed will be known in November when it advises Canada’s National Energy Board whether it is ready to embark on public hearings in early 2006.

But Imperial spokesman Pius Rolheiser told Petroleum News that the Mackenzie’s lead partner is “very encouraged” by significant progress that has been made in negotiations over the past five months, since project execution activities were halted.

He said the issues that need to be resolved are benefits and land access agreements with five aboriginal regions along the Mackenzie pipeline right of way and a fiscal framework with the Canadian government.

Rolheiser said the intention is to have agreements signed with the aboriginals, or at least evidence of a “clear path forward … a degree of assurance that they can be achieved.”

Fresh glimmer of hope

There was a fresh glimmer of hope in late September with reports that four of the five First Nations groups were ready to let the project proceed, prompting Northwest Territories Premier Joe Handley to express optimism that the National Energy Board will set hearing dates in November.

While unanimous aboriginal support would be desirable, he said there may come a point where the majority rules.

Speaking at an Insight Information Co. conference in Calgary, Handley outlined the far-reaching benefits of a Mackenzie Valley pipeline, projecting cumulative revenues of C$50 billion if natural gas prices hold steady at only US$4 per thousand cubic feet.

But NWT Natural Resources Minister Brendan Bell has told reporters recently that the delay in setting a date for regulatory hearings means the lead time on the Alaska gas pipeline is shortening.

If Alaska adopts a fast-track approach the delay could become a “material” concern, he said at a meeting of Canada’s provincial and territorial energy ministers, urging his colleagues to make the Mackenzie project a national priority.

Bell said the Canadian government has taken “monumental” steps to advance the project, adding that his own government is willing to enter negotiations with Ottawa, aboriginal leaders and Imperial to ensure that there is no further foot dragging.

He delivered a blunt message to the First Nations that they cannot hold out indefinitely for concessions.

There is no indication that the aboriginal regions are about to drop a demand to impose an annual C$47 million “property tax” on the pipeline.

Deh Cho Chief Keyna Norwegian insists that under treaty rights her community has a right to tax its land.

That claim is at odds with federal Indian and Northern Affairs Minister Andy Scott who has reportedly advised Handley that aboriginals have no authority to collect and disperse tax revenues.

Sahtu benefits negotiator Stephen Kakfwi, a former NWT premier, said training, jobs and contracts offered by the Mackenzie partners are not sufficient.

He said taxes are needed to pay for roads, water and sewer systems, cultural centers and recreational facilities, to give Native resident a higher standard of living.

Kakfwi said Imperial must shoulder at least half of the blame for putting the project 18 months behind its original schedule by failing to take some responsibility for improving the “dirt poor” standard of living among northern aboriginals.



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