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Vol. 9, No. 46 Week of November 14, 2004
Providing coverage of Alaska and northern Canada's oil and gas industry

Peace talks under way

Deh Cho, Canadian government look for way out of Mackenzie lawsuits

Gary Park

Petroleum News Calgary Correspondent

The Deh Cho First Nations and Canadian government negotiators have taken the first step towards settling a dispute that has threatened to block the proposed Mackenzie Valley pipeline.

They met in Ottawa on Nov. 5 in a bid to avert two Deh Cho lawsuits, which are seeking an injunction to stop the environmental review process.

Deh Cho Grand Chief Herb Norwegian gave his most positive assessment yet of the outlook, telling reporters: “We’re just trying to get everything back on track.”

He said both sides want a solution “as quick as possible to keep the whole process moving forward.”

Norwegian said an out-of-court deal would be in the best interests of the Deh Cho and government.

Although a non-disclosure agreement is in effect, Norwegian said an expanded role for the Deh Cho on the environmental panel is on the table.

About 40 percent of the pipeline route covers lands in the lower Northwest Territories the Deh Cho want to see included in a self-government agreement.

Because the aboriginal community does not have a land claim it is arguing for a stronger voice on the review panel.

No wavering from Aboriginal Pipeline Group

Meanwhile, the Inuvialuit, Gwich’in and Sahtu communities, who are partners in the Aboriginal Pipeline Group that hopes to take a 35 percent stake in the pipeline, show no signs of wavering in their support of the project.

Aboriginal Pipeline Group President Bob Reid told the Calgary Herald said he has encountered no opposition from those regions, although there are concerns about the environmental impact and access to benefits.

The importance of the Mackenzie Gas Project to the Northwest Territories was reinforced in a new study commissioned by the territorial government.

The study projects that the Northwest Territories will generate C$21.7 billion in resource royalties in the 20 years after the pipeline is completed — a figure that exceeds the average annual territorial government budget.

Premier Joe Handley said a combination of the pipeline and diamond mines could make the Northwest Territories economically self-sufficient, without any need for federal grants.

Officials from the Northwest Territories and Canadian governments started talks earlier this month on a resource-royalty deal.

Handley is pressing for an interim agreement as part of a devolution of power from the federal government to the Northwest Territories.



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Analyst: CBM to beat out Mackenzie Delta production

Gary Park

Coalbed methane will exceed natural gas production from the Mackenzie Delta by 2010, rising over the next six years to 1.4 billion cubic feet per day, predicts FirstEnergy Capital analyst Steven Paget.

Speaking to a Petroleum Services Association of Canada conference, he forecast 5,400 coalbed methane wells will be drilled in Alberta in 2010, 3,500 of them in the Horseshoe Canyon, and capital spending in the 2004-2010 period will total C$8.9 billion.

By 2010 alone, coalbed methane spending will hit C$2.3 billion, with C$1.4 billion going to drilling, which will consume 34,000 drilling days, Paget said.

FirstEnergy is counting on coalbed methane production totaling 1.3 trillion cubic feet during 2004-2010, while 8.2 tcf of reserves will be developed over the six years.

It estimates coalbed methane finding and development costs will rise from C$6.11 per barrel of oil equivalent this year to C$6.90 in 2010.


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