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Canada rejoins battle over Alaska Highway gas pipeline subsidies
Gary Park, PNA Canadian correspondent
Certain that a Mackenzie Valley gas pipeline application is in the offing, the Canadian government is again anxious to impress on U.S. legislators the damage that a subsidized rival Alaska project could inflict on North America’s markets.
Indian and Northern Affairs Minister Robert Nault said Feb. 13 that he will visit Washington, D.C., later this month to argue that market forces alone, not loan guarantees and a floor price for gas, should determine the timing of a $20 billion Alaska Highway project.
“The message to our American friends will be that we can deliver a secure supply of energy …and we can do it using market forces,” he told a Calgary news conference. “There’s no need to subsidize different routes to make it profitable.”
Nault said he has received strong indications that Alaska is making a renewed effort to obtain federal subsidies to allow development of North Slope gas.
Energy bill alive and well “It’s my understanding that (a comprehensive U.S. energy bill) is alive and well and it will be reactivated, if it hasn’t been reactivated already,” he said.
“We don’t believe it is helpful to skew the marketplace by the use of subsidies.”
Nault, while adamant that the Canadian government remains route neutral, said the government has “not ruled out loan guarantees” for a Mackenzie Valley project if the United States moves in that direction, but indicated that is unlikely.
However, government support could help with local infrastructure and job training in the Northwest Territories.
“We have always been able to involve ourselves in the whole area of training and in developing joint ventures and spin-offs that come from major initiatives like this,” he said.
Northwest Territories' pipeline office Nault announced that his department will provide an additional C$10 million over three years to establish a new Pipeline Readiness Office in Yellowknife, Northwest Territories.
Northern regulatory boards will receive C$6 million to help coordinate environmental assessments and regulatory reviews as part of a one-stop shopping approach that will eliminate duplication and speed up decision-making.
Nault said former National Energy Board chairman Roland Priddle, who is representing the federal government in pipeline negotiations, will soon be offering his assessment of a commercial solution for the pipeline.
While in Calgary, Nault also met with industry executives and the Aboriginal Pipeline Group on efforts to obtain C$70 million to pay for the APG’s share of preliminary design and regulatory work on the C$3 billion pipeline.
“We’re getting as close as we’ve ever been” to an application for a pipeline out of Canada’s Arctic, reaffirming previous indications by the Mackenzie Delta Producers Group that it hopes to formally enter the regulatory phase this year, he said.
“There’s a lot of encouragement in the discussions we have had with the (Mackenzie Delta) producers and the APG.”
APG chairman Fred Carmichael told CBC North last week that progress is being made, although Nault described as a “little out of whack” other news reports that the APG has reach an agreement that would see TransCanada PipeLines Ltd. finance the aboriginal share.
Nault said the Delta producers are not involved in the financing talks, but would have to be brought in if any deal changed the terms of the memorandum of understanding signed last year by the APG and the producers.
“We’re ready as a government to regulate a major initiative (like the pipeline) and we’re looking forward to applications from the industry,” he said.
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