Yukon, Northwest Territories duel for attention with gasline spin-off projections

Gary Park, PNA Canadian correspondent

The battle of numbers has been ratcheted up as rivals in Canada’s Arctic gas pipeline contest vie for attention, with the Yukon government releasing claims that an Alaska Highway route would pump about C$26 billion (US$16.6 billion) into Canada’s gross domestic product over 24 years.

A parallel report for the Northwest Territories government claimed a stand-alone Mackenzie Valley pipeline would inject from C$40.8 billion (US$26.1 billion) to C$77 billion (US$49.3 billion) into GDP.

The Yukon study, developed by the research group Informetrica Ltd. at a cost of C$126,000, said the major splash from a highway pipeline would be felt in the territory, but the ripple effect would spread across Canada.

It said the Yukon’s GDP would be lifted by an average 30 percent as the pipeline, which Informetrica predicted would cost C$13.6 billion (US$8.7 billion) within Canada, was installed and operated.

Potential person-years of employment in the Yukon would range from 32,000 to 50,000, with construction jobs peaking at up to 8,000 a year and dropping to 2,000 over the long term.

Elsewhere, Ontario and Quebec, which dominate Canada’s steel and equipment manufacturing sector, could expect 165,000 person-years of employment; British Columbia would gain 68,000; and up to 45,000 could accrue to Alberta.

The Mackenzie Valley pipeline would create about 157,000 person-years of employment, said a study released in February by Calgary-based Wright Mansell Research Ltd.

Two pipelines better than one

He again made the Yukon’s case for two pipelines being better than one.

“These two routes are very important,” Kent said. “I don’t see them as competing with one another.”

Michael McCracken, chairman and chief executive officer of Informetrica, agreed that building the highway system first lays the groundwork for the Mackenzie project.

He noted that much of the regulatory work for a highway pipeline is already completed and Alaska’s North Slope fields are already producing gas, which is reinjected to maintain oil reservoir pressures and because there is no means to sell the gas.

McCracken said construction of both pipelines could be timed so that construction crews could move from the highway project to the Mackenzie.

But that does not sit well with the Northwest Territories government, whose director of minerals, oil and gas Doug Matthews said the economic benefits of an Alaska Highway pipeline are “substantial, but they are short and sharp. The benefits from a Mackenzie Delta project would be long term.”

He also said U.S. Senate moves to offer loan guarantees and tax credits to ensure development of North Slope gas could have a severe impact on gas producers in Canada.

“The economic benefits of the Alaska Highway might be high, but at what price?” he told the Canadian Press news service. “The existence of a floor price guarantee means that all other basins in Canada will be at a competitive disadvantage.”