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Murkowski Meets with Canadian Premiers about Gas Line

Alaska Gov. Frank Murkowski met with the premiers of three Canadian provinces Monday to discuss the Alaska gas pipeline project, which ultimately will have to run through the Yukon, British Columbia and Alberta. Murkowski said all three premiers "committed to support good faith negotiations between their governments, North Slope oil producers and Canadian pipeline companies to ensure the most expeditious development of the project."

"The best way to avoid delay and litigation in Canada is to resolve regulatory, aboriginal and operational issues with Canadian pipeline operators," Murkowski said in a statement. "Today's meeting is part of our effort to ensure that there is a coordinated expeditious process for the project in Canada."

"Expeditious," however, isn't a word that many would use in describing any aspect of the Alaska pipeline project. The project isn't expected to be in service until sometime in the middle of the next decade. Lately, negotiations on the project seem to have slowed. Although ConocoPhillips recently agreed to some preliminary contract terms, none of the three producers have signed a fiscal agreement for the project.

Meanwhile, negotiations may suffer a setback due to the sudden resignation last week of seven high ranking officials at the Department of Natural Resources, including Commissioner Tom Irwin. Irwin resigned over legal questions about the governor's ongoing negotiations with the major producers and then six of his associates also quit (see Daily GPI, Oct. 31).

Irwin questioned the legality of some of the potential concessions to producers that Murkowski was offering as well as other steps the governor plans to take to make the pipeline project happen. It is unclear at this point what impact the resignations will have on the project, but at a minimum they will draw greater public scrutiny on any final deal that the governor works out with the producers.

There already has been public criticism over the near exclusive attention the producers have been getting while other project sponsors, including TransCanada Corp. and Enbridge Inc., wait for their name to be called. TransCanada spokesman Kurt Kadatz said the governor's office has had some "ongoing negotiations" with TransCanada, which claims to have exclusive rights to develop the pipeline project in Canada. The governor's office, however, has said any pipeline deal must include an agreement with the producers who will provide the throughput, whether they own the entire project or not.

Murkowski's office said the meeting with Alberta Premier Ralph Klein, British Columbia Premier Gordon Campbell and Yukon Premier Dennis Fentie in Vancouver Monday was arranged in anticipation of an agreement with producers in Alaska.

The Canadian minority government, which hasn't been in a strong political position, so far has dodged a choice between TransCanada and Enbridge for the Canadian segment of the Alaska pipeline. But the balance of power is changing, observers say, now that a grand jury investigation has exonerated the current government of any wrongdoing in a patronage scandal.

Released from political limbo the Canadian government may be in a position to move a number of things along, including the pipeline decision. The current liberal government is business oriented and has said in the past the proposals should be considered on their current merits. TransCanada has staked its claim based on historical treaties and agreements and the fact that it already has constructed the pre-build southern portion of the line.

As for a construction date for the smaller Mackenzie Pipeline from the northern Mackenzie Delta which has been viewed as promising competition for markets sought for Alaska gas, aboriginal hassles appear to have locked that project firmly in an incredible network of protests, court cases, and government reviews. The latest query being addressed by a joint review panel studying the Mackenzie line is how it would benefit women.

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