Northwest Territories drums up support for pipeline

Page 10

Northwest Territories Premier Stephen Kakfwi and others from his government attended the "Meet The North-Share the Vision" conference in Edmonton held April 9 to 11. The forum was an opportunity to discuss uniquely northern political and economic challenges.

Kakfwi, along with Minister of Resources, Wildlife and Economic Development Joe Handley and Resources deputy minister Robert McLeod, were there to promote the proposed Mackenzie Valley pipeline route as the best way to move Arctic gas to market.

Handley and McLeod met with Windspeaker April 10 to discuss why they believe the N.W.T. will get approval soon for its Mackenzie Valley pipeline application.

The group had just returned from Houston, Texas, where they discussed the same topic at the North American Gas Strategies conference put on by the Ziff Energy Group.

They told the Americans that the territorial government is determined to get approval for its pipeline application, which will allow it to supply Mackenzie Delta gas reserves economically to North American markets. Handley said they spoke to a "knowledgeable" audience that was "prepared to talk about it."

Both Yukon and Alaska, however, are vying for the right to ship gas through their territories. They want gas from Prudhoe Bay, Alaska to be piped along the Alaska Highway, through the Yukon and through northern British Columbia. It is estimated that route would be three times as costly to build. If they get their gas to market first, however, it could devalue the price of gas and cut demand for N.W.T. gas.

The N.W.T. wants gas from Prudhoe Bay to be piped under the sea to the Mackenzie Delta, then piped up the Mackenzie Valley along with Canadian Arctic gas into Alberta.

But the Alaskan senate is proposing Bill 14 to prohibit leases on state-owned "land" in the Beaufort Sea, which means Alaskan gas producers would not be able to use the Mackenzie Valley route to get their gas to market.

Handley said the key to the success of the N.W.T. proposal will be the partnerships formed with Aboriginal people, who are nearly all on side, unlike the other jurisdictions where the issue of the pipeline is more contentious.

"They're on side because our position has always been that we'll do this in partnership, not just (to suit the territorial government). It's going to be the territory, the Aboriginal governments and the federal government-let's work together."

The Aboriginal Pipeline Group got $500,000 from the territorial government and "have been working hard the past year to put together their business plan of how they're going to have an equity position in the pipeline - they'll be able to own a piece of it.

"So we have, I think, a much more positive, business-like approach in the N.W.T. than is the case in the Yukon, where the Yukon government sort of went on their own without ensuring that all the Aboriginal governments were on side."

That's true of the Yukon's Kaska Dene, who were opposed to an Alaska Highway pipeline, and vowed to fight the deal until their land claim is settled. They announced April 11, however, they were withdrawing lawsuits against the federal government, in exchange for Ottawa agreeing to resume land claim talks.

The federal government now says it will negotiate with Kaska communities in the Yukon and in northern British Columbia as one unit and will include the Kaska in talks and decisions on resource issues.

Handley said Yukon does not have the underground gas reserves the N.W.T. has, and neither Yukon nor Alaska can produce it as cheaply. The territorial government maintains the Mackenzie Valley route is shorter, flatter, and safer environmentally.

In his speech to the Texans, Premier Kakfwi said, "I pointed out to Mr. Chretien that the gas reserves in the Northwest Territories offer an important and viable alternative to developing the sensitive Arctic National Wildlife Refuge lands in Alaska."

Handley said the Americans at the conference also had heard Presidet Bush's recent statement that ". . . it's important for us to . . . work with the Canadians to get pipelines coming out of the Northwest Territories to the United States . . . There's going to be a lot of areas where we can find natural gas in America other than (the Arctic National Wildlife Refuge)."

Handley continued, "At this time, given the California and southern states' situation with . . . shortages of gas, and the price of gas, and the quantity of gas . . . (the pipeline is) a key issue for us, especially with President Bush talking about a continental energy policy. . . . We probably have the biggest reserve of natural gas in Canada - we'd better be there."

Although the Canadian federal government has stopped short of endorsing either N.W.T. or Yukon at this point, Handley said he was "very optimistic." He said Prime Minister Chretien's comments the previous Friday were "very positive and pro-development of Canadian gas, especially N.W.T. gas."

Handley said he also had talked with Minister of Natural Resources Ralph Goodale the previous week and was told Cabinet had set up an energy committee, "So I think even though we have been frustrated by the lack of federal response up to now, it seems that we have turned a corner there and that they're beginning to realize that this is big. We've been saying that for the past year-and-a-half. This is also the length of time his government has been working with the Aboriginal governments in the Northwest Territories.

Handley also said regulatory boards have been working for a year towards creating a single pipeline regulatory regime in the Mackenzie Valley in line with the requirements of the National Energy Board, the Canadian Environmental Assessment Agency, the Inuvialuit Final Agreement and the Mackenzie Valley Resource Management Act.

If the N.W.T. gets the go-ahead from the federal government, Handley said an environmental review, which will involve all the Aboriginal governments and land claim groups, cold take two years.

"The one area that the proposed pipeline would have to go through where there is no [settled] claim is in the Deh Cho in the southwest corner."

But Deputy Minister McLeod added, "They're signing off on a couple of agreements on protection measures and land management."

They estimate two to four years to settle the land claim, but said the Deh Cho are "supportive" of the pipeline.

Doug Cardinal, a Deh Cho representative for the Aboriginal Pipeline Group from Hay River is reported as saying the group wants 51 per cent ownership of the pipeline to start, and to acquire ownership of all of it as they acquire the expertise to run it. Cardinal admitted that Aboriginal ownership isn't an issue along the Alaska Yukon route.

Handley holds three additional portfolios in the Northwest Territories government. In his February budget speech as Minister of Finance, he said the Mackenzie Delta/Beaufort Sea contains about 56 trillion cubic feet of natural gas. That represents $400 billion in revenue at current prices. In the last two years petroleum companies have bid $650 million for Crown exploration licences and paid $76 million in bid bonuses for Inuvialuit subsurface lands. In addition, seismic work by petroleum companies this past winter was expected to add $80 million to the N.W.T. economy and employ 400 people.

The N.W.T. route, if approved, will create an estimated 6,000 person-years of employment during three years of construction and it will generate $600 million more in economic benefits to the N.W.T., according to Handley, even without royalties.