Northwest Territories route an economic bonanza for Canada, says study Energy think-tank says Mackenzie Valley pipeline project would be a winner in taxes, royalties Gary Park PNA Canadian Correspondent
A Mackenzie Valley pipeline, carrying Alaska natural gas to southern markets through the Northwest Territories, would generate billions of dollars more in economic benefits for Canada than an Alaska Highway pipeline, says the Canadian petroleum industry's most respected independent research organization.
The Canadian Energy Research Institute study estimated a Prudhoe Bay-Mackenzie Valley onshore or offshore route would reap C$9.01 billion in taxes and royalties for all Canadians over 30 years.
In contrast, Canada would collect only C$1.72 billion in taxes and royalties from the Alaska Natural Gas Transportation System, carrying 2.5 billion cubic feet per day from Prudhoe Bay along the Alaska Highway and across southern Yukon.
The study conceded there would be C$6 billion in construction cost spinoffs from the ANGTS link — compared with C$2.28 billion for a stand-alone Mackenzie Valley project — but it said those gains would be limited because there would be no ongoing taxes and royalties from Canadian gas producers.
However, it said that adding the proposed Dempster Lateral from the Delta to link up with the ANGTS line in the Yukon would see Canadian fiscal benefits rise to C$5.97 billion.
Northwest Territories Finance Minister Joe Handley said the findings make it clear to the Canadian government “there are tremendous benefits to be gained or lost depending on what Canada does.
“The American government has certainly taken a fairly aggressive stand and Canada has to do the same. We can't just sit back and say it doesn't matter, we will benefit anyway, because that isn't the case.”
The CERI study weighed the merits of five options: A Mackenzie Valley stand-alone pipeline; a combination of offshore Prudhoe Bay and Mackenzie Valley; onshore Prudhoe Bay and Mackenzie Valley; ANGTS; and ANGTS with a Dempster Lateral.
CERI vice-president Len Coad said the estimates were the result of “very high-level planning,” and should apply for at least the next five years.
The study was emphatic that a C$5.6 billion onshore or offshore line carrying 4 billion cubic feet per day of Prudhoe Bay and Delta gas would achieve the lowest pipeline tolls and highest producer revenue because of the lower front-end cost and economies of scale.
CERI also examined the environmental impacts of all options and concluded than none showed a clear advantage.
It said none of the proposed routes would destroy whole populations or species of wildlife or plants and concluded than any impact would be softened by the use of new procedures, such as horizontal drilling for stream crossings.
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