U.S. urges Canada to give pipeline swift approval
Regulatory snags will compound hurdles to Alaska project: U.S. Energy Secretary
theglobeandmail.com
BARRIE MCKENNA
WASHINGTON -- The Bush administration is urging Ottawa to quickly approve the Canadian leg of a proposed $20-billion (U.S.) natural gas pipeline connecting Alaska to the Lower-48 states.
"We just want them to pay attention to it," U.S. Energy Secretary Samuel Bodman said yesterday of the long-planned megaproject.
"This is a very important project for our country," he said. "It will provide natural gas in quantities that should have a real impact on our marketplace."
Mr. Bodman's comments are his first on Canada's role in the 5,700-kilometre pipeline since Alaska struck a royalty deal last week with the three oil multinationals seeking to build the pipeline.
The companies - Exxon Mobil Corp., BP PLC and ConocoPhillips Co. -- control most of the gas trapped beneath the massive oil fields of Prudhoe Bay on Alaska's Arctic coast. The pipeline would carry as much as 4.5 billion cubic feet of a gas a day south through Alaska, across the Rockies and through the Yukon to link up with Alberta's pipeline network.
Mr. Bodman said he hoped Canadian approval would be "swift" once Alaska completes legislation required on last week's tentative tax and royalty regime. That could come as early as the summer.
"I don't anticipate any problems," Mr. Bodman told reporters after delivering a speech to an energy conference at the Canadian embassy in Washington.
"I never cease to be pleased at the co-operation we get from Canada on energy matters," he said.
But the regulatory process could still be rocky. TransCanada Corp. of Calgary won the rights to build the pipeline in 1978, but the project was shelved. Rival Enbridge Inc., also of Calgary, now wants the old contract ripped up and new hearings on the pipeline held.
Tight supplies of natural gas pushed prices to record highs last year in North America. But prices have been in a tailspin this year, in part because of the unusually warm winter in much of the continent.
Mr. Bodman said he was looking forward to talking to Gary Lunn, Canada's newly appointed Natural Resources Minister, about the pipeline and other cross-border energy issues. The two men are slated to meet at a gathering of energy ministers from the Group of Eight in Moscow later this month.
Mr. Bodman acknowledged that shortages of labour and materials, particularly for steel pipe, could slow down progress on the Alaska pipeline.
Regulatory hearings before the National Energy Board began earlier this year on the Mackenzie Valley gas pipeline, giving the project an important lead on the Alaska pipeline.
"The world is short of manufacturing capability for pipe of this type. So if there are delays for one [pipeline], there probably will be delays on the other," Mr. Bodman said.
The Bush administration's top energy official also waded into the debate over Chinese investments in Canada's energy sector, including Alberta's oil sands.
It's a "free market" and the Chinese can do whatever they want, Mr. Bodman said.
But he suggested the U.S. market is the best place for Canadian oil exports to go because its proximity makes the most economic sense.
"The oil in the world is a commodity that trades," he pointed out.
"We clearly have advantages in being close to Canada. I would hope that the markets for Canadian oil would find their way to the United States in preference to other parts of the world, simply because it's less expensive to get it."
He added that China would have to pay a premium to take Alberta oil back home.
"It will cost them something to get the oil to China from Canada," he said. |
