The race for gas
Aboriginal pipeline group sees great potential, but unknowns still exist
Fort Liard ( May 22/00) - With a demand of 51 per cent aboriginal ownership of the proposed Mackenzie Valley natural gas pipeline, will pipeline companies still be willing to jump in?
That conundrum was posed to the delegates at a Deh Cho First Nations leadership meeting in Fort Liard last week.
During a meeting in Aklavik in early April, the NWT Aboriginal Pipeline Group (APG) set an initial goal of 51 per cent ownership of the pipeline and plans to eventually own it completely as expertise is acquired, according to Doug Cardinal, a Deh Cho regional representative on the APG working group.
"We haven't tossed that (proposal) around with a partner... that's a catch-22 for us," Cardinal said, acknowledging that aboriginal ownership is not a demand on along the Alaska/Yukon route, which would be three times as costly to build but already has permits in place.
Dennis Nelner, also a Deh Cho working group representative, said the National Energy Board requires at least 30 per cent equity for the pipeline and will allow the other 70 per cent to be financed. At an estimated price of $3 billion, the APG and whichever industry partner it selects would have to come up with $900 million. Nelner recommended that the federal government be lobbied for the equity. He noted that the fes have supported other initiatives such as the Hibernia project off the east coast and Cape Breton's coal mines.
"We don't look at it as a white elephant, we look at it as an investment. There's billions of dollars to be made," he said, adding that the Canadian government will be earning plenty in royalties.
However, Nelner also explained that with First Nations ownership, there will be learning curves, and a possible drain on the rate of return.
According to a nine-year forecast, hundreds of jobs are expected to be created through exploration, seismic, drilling, pipeline construction and development of the gas, with a peak figure of close to 6,000 jobs in years eight and nine. There was agreement among the delegates that training should begin as soon as possible to ensure the aboriginal workforce is not limited to labourer jobs.
"Capacity building has to start now," Nelner emphasized.
Doug Matthews, director of minerals and oil and gas for the GNWT, said the demand for gas is growing in the U.S., making the NWT supply more attractive. However, the greatest known reservoir of natural gas currently lies in Alaska's Prudhoe Bay. If and when that gas reaches market, it could devalue the price of gas, lessening the need for the NWT's product, Matthews suggested.
"The trick really is that we work together with them or we get out ahead of them," he told the delegates.
On the upside, he said there is "significant potential for meaningful aboriginal ownership."
As well, it's suspected there's more natural gas between Inuvik and Wrigley than there is along the Dempster Highway area. The Mackenzie Valley route also has the option of using the Enbridge oil pipeline right-of-way from Norman Wells going south, he noted. He added that communities along that stretch could potentially use the gas to heat homes and other facilities.
An NWT oil and gas conference has been planned for June 28-29 in Fort Simpson. Leaders from all regions, industry representatives and government officials, including the federal ministers of DIAND, finance and HRDC have been invited to attend.