Canada Arctic Pipeline Talks at Critical Stage
Date: 10-Sep-07
Country: US
Author: Richard Valdmanis
The project is billed as a way for the United States and
Canada to reduce future electricity bills and slash greenhouse
gas emissions by pulling down prices and raising supply for the
cleaner-burning alternative to coal.
"We're at the critical juncture here," said Brendan Bell,
tourism and investment minister of the Northwest Territories,
on a visit to New York.
"Throughout this project I've never been more concerned
about anything than the costs and the economics of the project
and the negotiations that have to happen between the producers
and Canada," he said.
Imperial Oil Ltd. and its partners are in negotiations with
the Canadian government in hopes of winning federal financial
support. Cost estimates for the project have more than double
over the past three years due to higher raw material prices and
tight labor.
The other partners in the line are ConocoPhillips, Shell
Canada Ltd., Exxon Mobil Corp. and the Aboriginal Pipeline
Group.
Bell said he hopes Ottawa will agree to help construct the
roads, bridges, airstrips and barge landings needed to build
the 750-mile (1,200 km) natural gas pipeline and backstop loans
required by the Aboriginal Pipeline Group to take an agreed
one-third stake in the project.
"There are certainly some things that we have felt over the
past year that we have discussed with Canada that we feel would
be a proper role for government," Bell said.
"But I am more concerned about the producers, and hope that
they have the will to see this thing through, even though the
costs have escalated," he said.
The Northwest Territories' Mackenzie Valley, on Canada's
Arctic coast, has about 6 trillion cubic feet of proven gas
reserves, but could potentially hold over 100 tcf, he said.
"I think there's a much brighter and much bigger future and
I hope that will be taken into consideration when (the oil
companies) are running the numbers," Bell said.
In a presentation to the Center for Strategic and
International Studies in Washington Thursday, Bell said the
completion of the pipeline project could save North Americans
US$340 billion between 2014 and 2025 and cut greenhouse gas
emissions by 280 million tons -- about twice the annual carbon
dioxide output of California.
"Northerners are on the front lines of climate change. We
are being impacted first and hardest. Nobody more than us wants
to find a solution," Bell said. "We think our Arctic gas can be
part of that solution, and we've got to get it to market and
help you reduce emissions."
Bell said that after navigating some thorny land rights
issues, most aboriginal groups support the pipeline.
"There's one main holdout region left, called the Dehcho,
who are not necessarily opposed to development or the
pipeline," Bell said. "But the leadership has certainly
recognized that Canada wants to see this project happen, they
don't yet have a settled claim and this is an obvious lever in
their negotiations with Canada."
"I think at the end of the day they're going to support the
project and the pipeline."
