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Tussling territories out to secure Arctic pipeline Northwest Territories, Yukon both go after gas line to Lower 48 Gary Park PNA Contributing Canadian Correspondent
An Arctic battleground has taken shape as the Northwest Territories and Yukon engage in the fight of their lives.
The two governments are out to secure the route for any natural gas pipeline from the U.S. and Canadian Arctic to the Lower 48.
With both regions among the most impoverished in Canada, the economic riches and spin-off benefits of a pipeline are incalculable.
Now heavily dependent on the Canadian government for their financial survival, they view the pipeline as their last chance to grab and control a huge chunk of resource wealth.
The opening shots have seen the Northwest Territories wrap itself in the Maple Leaf, by implication leaving the Yukon holding the Stars and Stripes.
Northwest Territories Premier Stephen Kakfwi painted his government’s preference for a route down the Mackenzie River Valley as more pro-Canadian than the Yukon’s ties to the 23-year-old plan for a pipeline from Alaska’s North Slope, through the central Yukon and into Alberta.
“We think it’s in the Canadian interest to say that Canada favors a Mackenzie Valley gas pipeline,” said Kakfwi. “It seems to me that Canada benefits more from moving Canadian gas to southern markets than to simply offer themselves up as a conduit for Alaskan gas.”
Kakfwi criticized for nationalism Brian Love, the Yukon’s oil and gas director, was plainly irritated by Kakfwi’s attempt to wrap himself in nationalist colors.
“I don’t see (the Yukon route) as anti-Canadian ... what it does it to provide an impetus for future development of Canadian reserves,” he said.
Love noted that the Alaska Highway route — approved in 1977 by Canadian and U.S. regulators — includes a possible feeder link from the Mackenzie Delta.
He said North Slope gas is ready now to be delivered. “The same can’t be said about Canadian gas. It’s not a slight against Canadian gas. It just isn’t ready yet.”
What both sides have overlooked is that the Yukon proposal is led by Calgary-based Foothills Pipe Lines, while the only NWT proposal is led by Houston-based Arctic Resources — evening out the Canada-U.S. rivalries.
Pipeline companies in strong position But pipelines and producers are quietly reveling in the looming showdown.
“The pipeline companies know they have a strong negotiating position,” said analyst John Mawdsley of FirstEnergy Capital in Calgary.
He pointed out that a jurisdictional fight gives the companies greater bargaining power, letting them use the threat of switching routes to extract concessions from the territories and the aboriginal communities.
That is a vital chip, especially as Kakfwi insists that a pipeline must be “substantially owned, operated and managed” by aboriginals.
He has already started negotiations with the companies in hopes of creating a business consortium around a pipeline project.
The industry has been circumspect about those demands. Although a spokesman for TransCanada PipeLines said aboriginal participation is “absolutely essential for construction of a frontier pipeline,” he wouldn’t speculate on the size of an equity stake beyond saying talks are under way.
Whatever their other disagreements, the NWT and Yukon are generally agreed on one basic issue: A pipeline will be needed and is achievable within 10 years — but only if their communities are heavy economic winners.
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