The four-month-old Conservative government in Canada sees the long-awaited time for arctic gas to flow as arriving, according to Indian Affairs and Northern Development Minister Jim Prentice, a close associate of Prime Minister Stephen Harper.
"I studied the 'spider's web' of suffocating northern regulation that the former government created. We intend to take action to deal with it," Prentice told a meeting of the Canadian Energy Pipelines Association in Calgary.
"The stars have certainly aligned to make the long-held dream of both the Mackenzie Valley Pipeline and the Alaska pipeline very real. Growing global demand for energy and upward pressure on prices have made new projects feasible." Prentice, who previously spent years as head of a national native land claims commission, is a pivotal figure in ensuring the necessary supply development happens.
Most Canadian analysts see current off-season gas price lows as sure to be temporary and followed by potentially large increases, especially if the summer is hot and forecasts for a busy hurricane season in the Gulf of Mexico turn out to be true.
In its first 100 days in office the new Tory cabinet has adopted a "project management" approach to policies affecting pipeline projects, Prentice said. Previously separate, at times conflicting, efforts by the energy, Indian affairs, northern development and environment departments are being coordinated.
"This approach will allow us to focus multi-departmental resources upon critical impediments that threaten projects." Initiatives to date include negotiations with the Deh Cho aboriginal holdouts against the Mackenzie project in the southern Northwest Territories and work on potential loan guarantees with the Aboriginal Pipeline Group farther north to ensure it can finance its one-third ownership of the arctic pipeline. The Tories' spring budget continued the previous Liberal government's commitment to a $500-million "socio-economic fund" for native communities along the right-of-way. Discussions on fiscal terms are also resuming with the project sponsors.
For openers, streamlined National Energy Board procedures are being substituted for more complex jurisdictional joint review panel methods as a regulatory pilot project in a relatively small case involving a short New Brunswick pipeline project.
"This initiative could dramatically reduce project approval times," Prentice predicted. In addition, "we are working to ensure an efficient and effective review process will be ready for the Canadian portion of the Alaska pipeline project," although there is no resolution yet of disputed claims by TransCanada Corp. to be heir to exclusive rights to build it.
And in the Mackenzie Valley, aboriginal communities stand warned they will not be able to take development assistance money and then turn around and oppose the project that led to the aid. "Funding will be linked to project milestones and it is obviously conditional on the pipeline moving forward," Prentice said. "No pipeline. No money. That is the most principled way to approach it."
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