April 22, 2001 --- Vol. 7, No. 46April 2001

Canadians say Alaska legislation may violate international agreements

The Canadian government will study Alaska's bill forbidding an underwater Beaufort Sea gas pipeline to see if it violates international trade agreements, said Natural Resources Minister Ralph Goodale.

"We'll be examining the bill in detail from a legal point of view," he told reporters April 21 at the Summit of the Americas in Quebec City.

Goodale did not specify what measures, if any, Canada might take, although Northwest Territories politicians and aboriginal leaders have argued Canada should be ready to withhold rights of way permits for an Alaska Highway pipeline.

Earlier this month, Goodale told the editorial board of the Edmonton Journal that the government might be forced to intervene if Alaska attempted to legislate a pipeline route.

He reiterated comments by Prime Minister Jean Chretien, that the markets, not governments, must decide where a pipeline is to be built.

However, a spokesman for Goodale said Canada is anxious to "remain neutral on this issue. We play a regulatory role in this matter. So it would be a conflict of interest for us to be promoting one project over another."

In a 40-minute meeting with President George W. Bush in Quebec City, Chretien lauded the U.S. president for his recognition of the gas in the Northwest Territories and Alberta's oil sands as potential energy sources.

"The president had recognized the NWT would be a potential source of energy for the U.S.," said a senior Canadian government official.

The official said Bush also responded that, on the gas front, Canadians would have to compete with Alaska.

He told Chretien that "Alaska is pushing quite hard," said the official.

Meantime, a spokesman for Exxon-Mobil subsidiary, Imperial Oil, which is the largest gas owner in the Mackenzie Delta, said that Delta producers are not ready to shut the door on a northern route that would see North Slope and Delta gas fed into the same pipeline.

"I don't think we would rule that out until we were certain that there was no opportunity there at all and no one has told us that," the spokesman said.

He also stressed that the Alaska legislation does not affect the Canadian producer group's study since it is focussed exclusively on a Mackenzie Valley pipeline.

State approves SE Delta exploration unit

The Alaska Department of Natural Resources Division of Oil and Gas has approved a unit application from Phillips Alaska Inc. for the SE Delta unit adjacent to the southwest corner of the Kuparuk River unit.

Phillips has 100 percent of the working interest in the seven state of Alaska oil and gas leases covering approximately 31,802 acres and is drilling the first of two proposed exploration wells this season.

Five of the leases were acquired by Phillips predecessor ARCO Alaska Inc. in 1991 and had an expiration date of March 31. The unit extends the leases through an initial two-year term; the state said Phillips can apply for a third year if it agrees to drill a third exploration well.

See complete story in the next issue of PNA.

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