Aboriginals warn Mackenzie Valley pipeline hangs in balance

Letter to Chretien says regulatory filing stalled and more delays will send negative, potentially destructive signals to explorers, markets

Gary Park

PNA Canadian Correspondent

Northwest Territories aboriginals say that unless they can obtain an initial C$70 million loan guarantee from the Canadian government plans for a Mackenzie Valley gasline are going nowhere.

In a blunt letter to Prime Minister Jean Chretien Oct. 2, the Aboriginal Pipeline Group, which is seeking a one-third ownership stake in the proposed pipeline, said the project has “reached a critical crossroad.”

Frustrated by the lack of progress in recent meetings with federal cabinet ministers the Aboriginal Pipeline Group told Chretien that only he can “signal whether he project will go ahead or stall.”

Nellie Cournoyea, Aboriginal Pipeline Group chairwoman and a former premier of the Northwest Territories, said the Mackenzie Delta Producers Group is ready to file documents with the National Energy Board, but will not go ahead without take that first major step in the regulatory process without the Aboriginal Pipeline Group on board.

Those documents cover environmental data, and the proposed size and routing of a pipeline.

“Delays in filing ... will send a very negative signal to explorers and markets,” the letter said. “Lack of funding will erode aboriginal support and potentially kill, or at least significantly delay the project.

“To date we have not received any adequate response from Canada. An immediate resolution to this impasse is required.”

Funding needed for definition phase

Eventually, the pipeline group hopes to obtain C$300 million in federal loan guarantees to lock up its one-third equity stake, which requires a total of C$1 billion — the remaining C$700 million to be raised through traditional financing sources.

The pipeline group filed its business plan with two government departments in June and has held several meetings with government officials, and it is only now that concerns have been raised, Cournoyea said.

She said the primary roadblock seems to be whether a loan guarantee could be viewed as a subsidy along the lines of the proposed U.S. Senate support for an Alaska Highway pipeline that the Canadian government has portrayed as subsidies and says it will oppose.

A spokesman for Indian and Northern Affairs Minister Robert Nault said the government has no intention of making any rash decisions that could rebound over the long term.

The pipeline group letter came a week after Northwest Territories Premier Stephen Kakfwi warned that the Canadian government risked losing aboriginal support for Delta gas development unless it resoled the funding requests.