|
Division widens NWT’’s Kakfwi predicts attempts to introduce subsidies have doomed Alaska Highway gasline proposal; Yukon’s Kent insists project is alive and well Gary Park PNA Canadian Correspondent
The bitterness between Canada’s northern neighbors over Arctic gas pipelines has intensified, with Yukon and Northwest Territories leaders sharply at odds over the future of the Alaska Highway option.
Northwest Territories Premier Stephen Kakfwi told a conference call July 3 that the Alaska project is now all but dead, a view Yukon Energy, Mines and Resources Minister Scott Kent described as “wishful thinking.”
Kakfwi predicted attempts by the U.S. Senate to offer incentives to the Alaska scheme will fail, adding “the debate seems to be over.”
“The main producers are categorically against it,” he said. “The Canadian government is categorically against it. The U.S. administration is against it.”
He was referring to remarks in late June by U.S. Energy Secretary Spencer Abraham, who said in a June 27 letter to the House and Senate conference committee on energy legislation that the Bush administration is “strongly opposed” to Senate proposals for a price-floor tax subsidy provision and any similar provision because they would distort the market and cost more than $1 billion a year in lost revenues. Proposed U.S. subsidies at issue Abraham said subsidies would “likely undermine Canada’s support for construction of the pipeline and thus set back broader bilateral energy integration.”
Kakfwi said the Northwest Territories government, which has been pursuing support from California, Wyoming and Colorado against subsidies, will continue that lobbying effort.
But, while opposed to direct subsidies, he said his government doesn’t rule out loan guarantees from the Canadian government for a Mackenzie Valley pipeline.
“Loan guarantees are different,” he argued, noting they could open the way for Northwest Territories aboriginals to own up to one-third of the pipeline from the Mackenzie Delta.
Kent, in a statement July 5, without naming Kakfwi, said suggestions that the Alaska Highway pipe dream has faded were being made by “those who insist on promoting their own agendas at the expense of northern development.
“The project continues to enjoy strong business and political support, support that will be sustained and demonstrated as U.S. energy legislation and other initiatives move forward this fall.”
Kent said the North American market will need gas from the Yukon, Alaska, the Northwest Territories and elsewhere to offset a combination of rising demand and declining supply. Mackenzie Valley faces challenges “There remains strong bipartisan support for the Alaska Highway project in the U.S. and it is also widely supported in Canada by those who understand the enormous economic benefits of northern gas development,” he said.
He also said he was surprised that some proponents of a Mackenzie Valley pipeline are distracted by the perceived threats of an Alaska gas project, when the Mackenzie Valley project faces more serious domestic problems.
Those challenges include a widening gap between the interests of E&P companies, supporters and non-supporters of the Mackenzie Valley Aboriginal Pipeline Group and a confusing assessment and permitting process that could take more than four years to complete.
Kent insisted the Canadian government respect its own laws and regulatory processes.
Natural Resources Minister Herb Dhaliwal has warned that if the United States decides to subsidize an Alaska pipeline Canadian might retaliate by denying pipeline right of way permits.
“Threatening to delay projects by manipulating law for political purposes is unbecoming” of a member of the G8 group of leading world industrial powers, Kent said.
“Northern gas pipeline proponents should focus their energies on creating a positive investment climate for northern pipeline projects,” he said.
| 