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Kakfwi confident Delta producers will submit a plan this fall Tells Chretien Canadian gas should get priority in serving U.S. markets; sees commodity-price slump as further challenge to ‘shaky economics’ of highway pipeline Gary Park PNA Canadian Correspondent
Northwest Territories Premier Stephen Kakfwi is making an urgent plea for a Mackenzie Valley gas pipeline, lobbying the Canadian government and suggesting that this year’s rapid fall in gas prices strengthens his case.
In an August meeting with Prime Minister Jean Chretien he pledged that by fall the federal government will be able to consider a proposal from Mackenzie Delta producers to ship their gas to southern markets, notwithstanding a failure so far to achieve a united aboriginal front on Native ownership of the delivery system.
“Canadian gas should have priority in getting to U.S. markets,” he told Chretien. “We want to make sure our gas is not stranded and given less priority than Alaska gas.”
Kakfwi said Chretien assured him he shares the sentiment about the importance of developing the Delta.
“He has told President George Bush that Canadian gas must be brought to market. He won’t just let Alaska gas get to market with no consideration of Canadian gas,” Kakfwi said.
But Chretien was less emphatic when he spoke with reporters.
“I always said I wanted to make sure natural gas in the Delta gets access to the market and (Kakfwi) said to me that he hoped the pipeline companies will be ready to come with a proposal in the fall,” the prime minister said. “The sooner the better. There is a demand for gas in the U.S. and this is the time to be ready.” Aboriginal disagreement won’t stop development Kakfwi said the failure of aboriginal groups to agree on how much Native ownership of a pipeline is desirable won’t stop Delta producers from developing a proposal.
Showing his frustrations over the divisions, he said the shift over the past year by groups such as the Deh Cho and Sahtu First Nations from support for a pipeline to uncertainty “brings a credibility problem.”
But he said reluctant aboriginal partners are not wanted. “If they don’t support (a pipeline), they don’t’ need to be involved. It is their choice.”
In an earlier interview with the National Post newspaper, he insisted the disagreements among aboriginals over pipeline ownership do not pose an insurmountable obstacle.
Calling the dissension a “hiccup,” he said the Deh Cho have merely decided they are not yet ready to participate in any deals with producers or pipelines.
He said unanimous backing is not required for a pipeline to proceed.
Instead, the focus will be on those aboriginal groups who want to take an equity stake, while those who don’t will not affect the viability of the project.
“My sense is a substantial number of people will want to own the pipeline under the assumption that it’s going to be worthwhile,” said Kakfwi.
Meanwhile, Kakfwi views the gas-price slump as bolstering the chances of a Mackenzie Valley pipeline. Lower price favors Mackenzie Combined with the higher costs of building a pipeline from the North Slope, the lower commodity price “puts a bit of a damper on Alaska gas and is encouraging for the Mackenzie Delta,” he said.
Kakfwi argued that the Mackenzie Valley pipeline is predicated on gas prices around US$3 per thousand cubic feet, while prices “anywhere near” US$4 would make North Slope development a shaky economic proposition.
He said the new price environment could even see the NWT pipeline unseat the stand-alone Alaska Highway proposal from its favored position.
If a Mackenzie pipeline moves to the forefront, North Slope producers might abandon their plans for the highway route and shift their attention to the “over-the-top” link from Alaska to the Delta, Kakfwi said.
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