Bush assures Chretien he favors market-based decision on gasline

Gary Park, PNA Canadian correspondent

President George W. Bush has taken some of the heat out of a brewing fight between U.S. and Canadian interests by assuring Canadian Prime Minister Jean Chretien that the White House prefers a private sector decision on Arctic natural gas development.

The two leaders, who met June 26 in the Canadian Rockies as part of the summit of leaders from the world’s eight largest industrialized nations, agreed they “should not necessarily legislate” an outcome to competing northern pipeline projects.

A senior Canadian government official told a news briefing at the G8 summit that Bush, referring to a U.S. Senate bill proposed to subsidize construction of an Alaska gas line, told Chretien: “As you know, I have not signed that bill yet.”

That was interpreted by Canadian officials as a sign that Bush is open to rewriting the legislation, which has provoked anger among Canadian industry and government leaders, who argue that subsidies could cripple gas production across North America, stall plans to develop Mackenzie Delta gas indefinitely and undermine U.S. efforts to develop a secure continental energy supply.

But Canadian and U.S. officials concede that Bush’s remarks fall far short of a commitment to veto or rework any legislation and say they do not expect a final stand from the president until after the November mid-term elections.

The Canadian government has hinted that if the United States subsidizes the Alaska route, Canada may retaliate with tit-for-tat policies that support construction of a Mackenzie Valley pipeline.

Natural Resources Minister Herb Dhaliwal, who does not believe two northern pipelines would be viable over the short term, said Canada is ready to block approvals for an Alaska line to cross Canadian territory if the project is subsidized.