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Pipeline twists, turns Western Canadian premiers want strategic plan to speed Alaska pipeline By Gary Park Petroleum News Canadian Contributing Writer
The Canadian government is coming under pressure from Western Canadian premiers and the industry to find answers to the obstacles delaying the Alaska and Mackenzie natural gas projects.
The premiers of Alberta, British Columbia and the Yukon agreed at a Vancouver pipeline summit with Alaska Gov. Frank Murkowski that their energy ministers should develop a strategic plan to press Ottawa for a decision on who should build the Canadian leg of the Alaska system.
Separately, Shell Canada Chief Executive Officer Clive Mather said Ottawa has several ways to support the Mackenzie pipeline without taking an ownership stake in the C$7 billion project. Call for good faith negotiations The western premiers and Murkowski made a joint call for good faith negotiations between the North Slope gas owners and Canadian pipeline companies TransCanada and Enbridge to achieve a swift resolution of the unresolved issues.
The premiers said the Alaska pipeline is critically important to the prosperity and energy security of Canada and the United States.
The Yukon’s Dennis Fentie said construction of a pipeline along the Alaska Highway right of way would “generate major benefits for all of our jurisdictions both during the construction phase and when it is operational.”
British Columbia’s Gordon Campbell said that with 25 percent of the Canadian portion crossing his province it is vital for British Columbia to ensure the regulatory, economic and First Nations interests of the province are represented as the project moves forward.
Working with Alaska on a united strategic plan opens the door to coordinated regulatory approvals with the Canadian government, he said. B.C.: toughest challenges Of all the Canadian jurisdictions, British Columbia poses some of the toughest challenges in dealing with environmental and aboriginal concerns.
Enbridge alone is negotiating with 40 aboriginal communities along the route of its planned Gateway oil sands pipeline to Kitimat.
The government is also caught up in its own regulatory maze, although it has tried to overcome some of those obstacles by implementing the Significant Projects Streamlining Act just to fast track the resolution of conflicts between competing government agencies.
Alberta’s Ralph Klein said his province backs the delivery of gas from both Alaska and the Northwest Territories to North American consumers.
He said Alberta’s existing gas export hub offers the “most economic means of getting gas to multiple markets.” Alberta wants gas liquids Prior to the summit, Alberta Energy Minister Greg Melchin underscored the importance of an Alberta hub, opposing any suggestion of a bullet line from Alaska to the U.S. Midwest.
Alberta has repeatedly made a case for gaining access to Alaska gas liquids to support its petrochemical sector and the chances of that happening “would clearly be negated if we had no access,” he said.
“There’s ways we can probably work together and make a good package that works for al parties,” Melchin said.
But he said Alberta will not take sides in the dispute between TransCanada, which claims exclusive rights to build the Canadian segment, and Enbridge, which has called for an open competition. Yukon aboriginal issues Fentie rejected criticism that his government has mishandled aboriginal concerns over the Alaska pipeline.
A coalition, formed to represent the interests of Yukon aboriginal communities, accused Fentie of withholding money from aboriginals to pressure them to work with his government.
Fentie and his Energy Minister Archie Lang want the Canadian government to treat Yukon aboriginals in the same way they have treated Northwest Territories aboriginals. The federal government has offered C$500 million over 10 years to cover socio-economic impacts on Northwest Territories aboriginals regions affected by the Mackenzie project.
Fentie said the discrepancy between the way Ottawa has treated the Northwest Territories and Yukon aboriginals is “real, it’s clear and it’s time that Canada did what it should be doing. We’re looking for the same kind of treatment.” Mackenzie plans: confusion and doubt Amid the efforts to inject new momentum into the Alaska project, confusion and doubt continues to build around the Mackenzie plans, although they are expected to be cleared up by Nov. 18 when Imperial Oil has promised to advise the National Energy Board whether it is ready to proceed with regulatory hearings.
Mather told reporters in Toronto that the economics of the Mackenzie project “are not as robust as we’d like” and are a larger issue than late October speculation that the Canadian government had offered to take a 20 percent stake in the pipeline — a report denied by Deputy Prime Minister Anne McLellan and Mackenzie lead partner Imperial Oil.
He said the partners are now at the point of figuring out ways to improve those economics “through discussions around a number of factors which involve the federal government.”
Mather is optimistic that answers can be found over the next few weeks that allow the project to embark on the regulatory hearings and construction.
Although Mather did not detail the options he believes are available to Ottawa, other industry sources have claimed Imperial wants federal financial incentives, such as royalty breaks, to make the project viable, but Imperial has refused to get drawn into those rumors, saying the discussions are confidential.
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