MacKenzie pipeline said 'at risk'
Sort out social funding now, NWT warns
By DAVE EBNER
Thursday, June 2, 2005 Page B7
theglobeandmail.com
CALGARY -- Ottawa has to come up with cash this month to deal with social and economic issues in the Northwest Territories or risk seeing the proposed $7-billion Mackenzie Valley natural gas pipeline shelved, the NWT Premier says.
"This has to be sorted before summer, there's no question," Joe Handley said yesterday.
In late April, the pipeline's main backer, Imperial Oil Ltd., halted most of the work on the project, blaming regulatory delays and what it considers unreasonable demands for money from native communities. Ottawa promised in May it would help. Northern leaders have proposed $100-million a year in new spending to address social-economic concerns, but Ottawa has yet to schedule official meetings to close the deal.
"We're really putting the pipeline at risk," Mr. Handley said. "There's lots of other places Imperial can spend its money."
Mr. Handley had hoped to meet with Deputy Prime Minister Anne McLellan in mid-May to settle the issue. Mr. Handley, in frustration, plans a trip to Ottawa next week even though he has no meetings booked.
More work needs to be done on the details of the $100-million, said Alex Swann, a spokesman for Ms. McLellan.
"It's premature to talk about the project being in jeopardy," Mr. Swann said. "Everyone wants to work on this as quickly as possible."
The money, which amounts to about 10 per cent of the NWT's current annual budget, would be divided between the territorial government and first nations groups. It would serve as a bridge until a deal on resource-revenue sharing is completed.
Mr. Handley, like other players, fears the Mackenzie Valley pipeline could be pushed off a list of priorities by liquefied natural gas terminals. Imperial is majority owned by Exxon Mobil Corp., the world's largest oil and gas firm, and Exxon wants to build several liquefied gas terminals in the United States, which would take in imports from countries such as Qatar.
Should such terminals be built -- and they can be built more quickly than northern pipelines -- North America's need for gas from the Mackenzie Delta would decline considerably.
Tristone Capital Inc. warned of this in a 48-page report last month. The Calgary investment dealer showed that Mackenzie Valley would be more profitable for producers than Qatar liquefied gas but said the pipeline project has to get moving.
"The clock is ticking," Tristone said.
Imperial spokesman Hart Searle said Imperial makes decisions independently of Exxon, which controls about 70 per cent of Imperial stock. The pipeline is "very much a priority for us" and Imperial is encouraged with progress in talks between Ottawa, the NWT and first nations groups, he said.
"We share the sense of urgency that the premier has alluded to," Mr. Searle said. "But we recognize these are complex matters and it will take some time to address them."
Mr. Searle noted that Imperial in late April said it wanted to see solid progress made by the end of the summer, at which point public hearings for the pipeline proposal could begin.
There had been worries that a proposed natural gas pipeline out of Alaska would push the Mackenzie pipe out of the picture but the Alaska proposal has stalled. It likely won't be built until 2015 and Mackenzie is supposed to be moving gas in 2010. |
