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Yukon Premier Supports ANGTS Over Rivals

Yukon Premier Supports ANGTS Over Rivals

The Yukon Territory's new Liberal government has stepped forward to go to bat for a revival of the dormant Alaska Natural Gas Transportation System (ANGTS) as its enthusiastic choice for a northern pipeline project.

Yukon Premier Pat Duncan told a Calgary audience of senior industry and government officials that "we are aggressively promoting the Alaska Highway pipeline route to move northern gas to market."

Duncan also said, unlike her counterparts in the Northwest Territories, the Yukon government regards the northern pipeline as purely a "private sector project." There are no demands by the Yukon for special rights to ownership interests in the proposed pipeline for natives or any other group, said Duncan, whose Liberals took power from left-leaning New Democrats in a spring election.

At the same time as the Yukon premier paid her calls on the Canadian gas capital, political and native leaders in the Northwest Territories laid out their demands. Those are topped by majority native ownership of a rival entry to ANGTS in the northern pipeline contest, the Arctic Resources project with its route south through the Mackenzie Valley from the Delta-Beaufort region and a spur west to the North Slope of Alaska (see Daily GPI, June 14). Financial backing for Arctic's project would be sought from the federal government in Ottawa. Tariff-backed bonds would be issued by special purpose entities to be owned by aboriginal and government groups, which could own the pipeline.

In Calgary, industry and government officials who listened to Duncan predicted it will be 2001 before numerous northern pipeline projects now being talked about take on solid enough form to start appearing as filings with regulatory authorities. There is also a consensus, solidified during the June World Petroleum Congress in Calgary, that it will take a normal winter and resulting high natural-gas prices to convince gas suppliers, buyers and transporters in the United States that the time has truly arrived for the northern pipeline. There still is some doubt among the principal owners of northern gas in Alaska - BP Amoco-ARCO, ExxonMobil and Phillips Petroleum. The trio dominate ownership of about 30 Tcf of Alaskan gas, which is currently produced at a rate of 8 Bcf/d only to be re-injected into the Prudhoe Bay oilfield. The oil reserves are running down, freeing the companies to think about exploiting the gas.

Industry sources say the producers are divided in their thinking. Phillips is understood to favor a gas pipeline, while ExxonMobil is inclined to try using gas-to-liquids technology it has spent more than US$400 million developing to tap remote reserves throughout its global empire. At the June petroleum congress, BP chairman John Browne made it plain his organization is still on the fence, studying all the options and is especially interested in confirming whether the lower-48 states are ready for northern gas.

The Yukon government is a staunch believer that the northern pipeline megaproject will be revived, and quickly. "The growing use of natural gas for the generation of electricity and the shift to natural gas as the clean fuel of choice, suggests to me that the changes are as structural as they are cyclical," Duncan said. "Clearly the demand for natural gas is only going to increase."

The Yukon premier said, "Based on what I have been hearing and reading lately, the North American demand for northern gas will be upon us sooner rather than later, certainly in closer to five years than 10." She said the Yukon endorses ANGTS as the option that both stands ready to go under international agreements dating back to the 1970s and stands out as the most environmentally acceptable proposal.

Duncan said her government will oppose, on environmental grounds, any attempt to open up new offshore or land transportation corridors directly linking the North Slope of Alaska and Canada's Delta-Beaufort region. She said the Yukon continues to support the ANGTS plan of following the Alaska Highway with the main northern pipeline, then eventually the Dempster Highway between Whitehorse and Inuvik with a "lateral" to pick up Canada's arctic gas. She pointed out that the entire project won Canadian and U.S. approvals two decades ago. Canadian government officials confirmed that the one-window regulatory apparatus created for ANGTS, northern pipeline commissioners in Ottawa and Washington, still exists legally and could be put back into action with some personnel appointments.

As an added advantage, the Yukon premier pointed out "we're the frontier next door," relatively accessible for potential new supply development as well as a pipeline route. "Alaska to the northwest, the Mackenzie Delta and the Beaufort Sea to the north, British Columbia and Alberta to the south - the geology does not stop at the borders. The potential for new and exciting discoveries is very real."

Activity already shows signs of picking up in the Yukon. Following successful auctions of drilling rights, seismic survey work is scheduled to start this summer on the Yukon's share of the Liard Plateau, where a group led by Chevron Canada recently started producing spectacular discoveries via a new pipeline on the Northwest Territories' share of the region.

Yukon natives are showing they are as eager for job-creating industrial activity as their peers in the Northwest Territories. In the southeastern Yukon, the government has reached an agreement with the native Kaska Nation on a procedure to allow drilling before a land-claim settlement is reached, Duncan reported.

The premier added that preparations are under way for more auctions of Yukon drilling rights, in response to industry expressions of interest. "The Yukon is virtually unexplored."

Gordon Jaremko, Calgary

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