Arctic high-rollers could lose out, warns AEC president
Gary Park
Arctic gas pipeline players who insist “it's their way or no way” could finish up with the latter, leaving the resource trapped in the ground for decades, warns Gwyn Morgan, president and chief executive officer of Alberta Energy Co. Ltd.
Unless there is an early agreement everyone could lose out, he told a British Columbia conference on Oct. 18.
“All players, three levels of government, aboriginal groups, oil and gas companies and local businesses must realize that, just like in poker, if they overplay their hands the game could be over in a flash,” said Morgan.
“But we have a whole variety of governments and peoples setting down conflicting ultimatums” just as they did during a similar push in the 1970s for an Arctic pipeline.
“Industry was ready to build a pipeline to the Arctic, but here we are, a quarter of a century later,” he said. “The poker game has begun again.”
AEC has become a front-line player in the Arctic over the last year, successfully bidding by itself and in partnerships to gain interests in 61 Beaufort Sea and North Slope tracts after acquiring a 75 percent interest in a 400,000 acres Mackenzie Delta block.
Arctic competing with other gas sources Morgan noted that the Arctic is in head-on competition with other countries such as Venezuela and Trinidad and Tobago who are seeking buyers for their large gas resources.
As the cost of shipping that gas in liquefied form becomes cheaper, those projects will grow in appeal.
Gwyn Dawson, managing partner of Calgary-based energy analyst SBM Inc., agreed with Morgan, telling the conference there are “always alternatives if people demand too much.”
Pierre Alvarez, president of the Canadian Association of Petroleum Producers, suggested much more can be done to simplify and accelerate regulatory approvals for major projects.
“Industry wants to be assured that as projects come up and as the market signals that projects are being considered, that the policy and regulatory environment is in place to handle them as they come forward,” he said.
“But the timing (for Arctic gas) is going to depend on the market.”
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