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----- Original Message ----- From: Peter Di Gangi To: undisclosed-recipients: Sent: Thursday, April 28, 2005 9:43 PM Subject: NWT - Pipeline poker http://www.theglobeandmail.com/servlet/story/RTGAM.20050428.wpipelinez0428/BNStory/Business/ Pipeline work halted in face of Red Tape, Native Demands By PATRICK BRETHOUR Thursday, April 28, 2005 Updated at 9:47 PM EST >From Friday's Globe and Mail Calgary - The backers of the Mackenzie Valley pipeline are facing down federal regulators and native bands, saying they are halting all engineering work on the $7-billion megaproject until they can secure concessions on mounting costs and delays. Imperial Oil Ltd., speaking for the five-member consortium, said work scheduled for this summer is being cancelled because of a vague regulatory process and demands for "hundreds of millions" of dollars in spending from the four aboriginal groups in the Northwest Territories. As a result, Imperial said, it is not sure how much the project will actually cost, or how long it will take to build. "Right now, we don't have that certainty and confidence," Imperial senior vice-president Michael Yeager said in a conference call with reporters and analysts. Planned field work to gather geo-technical data, engineering and preparations for construction contracting have been halted, with all the consortium's effort now focused on the regulatory process. "We are working night and day with 200 people to fix this," Mr. Yeager said, referring to the pipeline delay. At least one oil patch observer said no one should make the mistake of thinking that Imperial will not cancel the project if it believes that the economics are unfavourable, "Imperial is a very hard-nosed operator," said Wilf Gobert, vice-chairman at Peters & Co. Ltd. Any delay by Imperial could put the Mackenzie pipeline on ice for years if it lets the rival Alaska pipeline jump ahead in the race to bring northern gas to the United States, particularly as the regulatory process has pushed the Canadian project behind schedule. That would deal a sharp blow, both to the consortium's ambition to exploit natural gas in the Mackenzie Delta and the territory's hope to use the pipeline's construction to create jobs. That is precisely what happened 28 years ago, when concerns over unresolved native land claims led to a moratorium on development of the Mackenzie, with a crash in energy prices freezing plans until this decade. Aboriginal groups have pledged support for the project this time around, but the extent of their demands for so-called access fees threaten its viability, Mr. Gobert said. He said native bands are making unreasonable demands. "They're trying to hold out for it, in my mind, as a ransom." A spokesman could not be reached for the Deh Cho, the only aboriginal group without a land claim agreement and whose negotiations with the federal government have been a serious hurdle for the Mackenzie project. The Globe and Mail reported this week that Imperial and consortium member Shell Canada Ltd. were concerned about the mounting costs of the project, including the rising tab for "access agreements" or the fees that the pipeline backers will pay and services they will provide to aboriginal bands. Mr. Yeager said the proposals from aboriginal groups far exceeds the amount and scope of what the companies deem to be related to the pipeline, saying the requests would cost hundreds of millions to meet. An Imperial spokesman said some bands are asking to be paid property taxes, which the companies are not obligated to do, and have requested that the consortium pay for housing. Imperial development executive Randy Ottenbreit said some bands have tried to tie their discussions with Ottawa over the sharing of resource revenue to negotiations with the consortium. The consortium is making several demands, including that: --The federal and territorial governments deal with any requests for social spending not directly related to the pipeline project. --Federal regulators outline a "clear, firm" review process. --A commitment to the original timelines in a June, 2002, agreement that would have seen hearings begin this spring. Dan Brien, spokesman for Indian Affairs Minister Andy Scott, said regulatory issues are being worked on by all sides, but that he didn't know if the government would be willing to streamline the process, or change the timeline, to meet the consortium's demands. But he said difficulties are to be expected with any major project. "It's not great news, but it's a bump in the road." With files from reporters Dave Ebner in Calgary and Simon Tuck in Ottawa [Non-text portions of this message have been removed] Native News North List info{all lists}: http://nativenewsonline.org/natnews.htm Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/NatNews-north/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
