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Canada to smooth path to Arctic pipeline approval; will soon have “full force” in place, says Dennis Wallace Resurrects Northern Pipeline Agency; but says route is an industry decision Gary Park PNA Canadian Correspondent
The Canadian government is scrambling to get its house in order by pledging to offer a seamless approval process for northern natural gas pipeline development.
Dennis Wallace, associate deputy minister of Indian Affairs and Northern Development, told a North American gas strategies conference in Calgary the government understands the industry's desire for fiscal, regulatory and environmental certainty.
“With such a high level of interest in developing energy in the Arctic, it's in everyone's interest to clarify the rules of the game,” he said. “By early next year ... we will be ready with a full force.”
Measures will include resurrecting the Northern Pipeline Agency, set up in the 1970s to offer a streamlined regulatory regime, but mothballed when the prospects of an Arctic pipeline hit a roadblock of aboriginal resistance and a market downturn.
Wallace said a federal task force has spent recent months studying royalties and fiscal issues surrounding gas and associated pipeline development; northern and aboriginal participation; training needs; regulatory harmonization; environmental assessment; and Canada-U.S. issues for an Alaska Highway pipeline option.
But he said the government is unlikely to get involved in large-scale financing of a pipeline, nor will it meddle in deciding where an Arctic line should be routed, despite competing pressures from the Northwest Territories and Yukon to get a line built through their territories.
All he was prepared to do was drop hints that could be seen as encouraging to both sides.
Aboriginal Pipeline Group formed Of the Alaska Highway route that would carry Alaska gas through the Yukon and into southern Canada to link up with export lines to the Lower 48, Wallace said the Canadian and U.S. regulatory approvals already in place “offer a high degree of certainty.”
Referring to the Mackenzie Valley proposal to carry gas from the Mackenzie Delta and possibly include an onshore or offshore link to Alaska's North Slope, he said “development of the Mackenzie Delta would be a project of national significance.”
More definitively, he said: “If the North is to make a contribution to the national economy and North American energy security, development must have lasting and tangible benefits for northerners, including aboriginal people.”
Wallace said the formation earlier this year of an Aboriginal Pipeline Group, to advance Native participation in a pipeline, has sent a “powerful message (that) aboriginal people are now anxious for development to proceed as long as they see long-term benefits.”
Mackenzie could be stand-alone At a later San Francisco conference, Canadian oil executives from companies with big stakes in Arctic resources said they believe the Mackenzie Delta could be developed separately from any project in Alaska.
J.C. Anderson, chairman of Anderson Exploration Ltd., holder of the most Delta exploration licenses, said the market will need both North Slope and Delta gas.
“People are expressing concern to me about Prudhoe Bay coming on and overpowering the Mackenzie Delta,” he said. “Well, I don't think that's going to happen.”
Norm McIntyre, vice-president of Petro-Canada, said the Delta could be a stand-alone project provided a threshold of about 10 trillion cubic feet of reserves could be achieved. “About 6 trillion cubic feet has been discovered today and there's not a question in my mind in terms of our ability to find the other 4 TCF.”
Gulf Canada Resources chief executive officer Dick Auchinleck said he believes the most economic pipeline would be one straight down the Mackenzie Valley — the shortest of all the options — to Alberta's major gas-gathering network.
Gulf Canada, Imperial Oil, Mobil Oil Canada and Shell Canada — the Delta's major gas owners — are close to completing a joint study on the development of onshore NWT gas. The conclusions are expected either late this year or early in 2001.
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