CALGARY - Two key players in
the $7-billion Mackenzie natural gas pipeline project warned
yesterday that time is running out to save the massive venture.
Bob Reid, president of the Aboriginal Pipeline Group, said
the project's partners have set a six-to-eight-week window
to settle key agreements with aboriginals and the federal
government, after which shutting down the project is "a
Meanwhile, Stephen Kakfwi,
the former premier of the Northwest Territories and now
a negotiator for one of the aboriginal communities, said
the two sides are so far apart the November deadline is
unrealistic. "It's been too long and no deal has been
made -- not with the federal government, with the government
of the Northwest Territories, or a single aboriginal group,"
Mr. Reid said further delay
would push back its 2011 completion date and set it on a
"collision course" with the competing, US$20-billion
Alaska natural gas pipeline. It's unlikely the two Arctic
projects would move ahead together because of their large
requirements for steel, labour and services. The APG, Canada's
largest aboriginal enterprise, holds a one-third stake in
the Mackenzie Valley project. "Come November, unless
we have access and benefits agreements in place and there
is fiscal certainty with the federal government, then shutting
down the project is a very real option," Mr. Reid said.
"The APG certainly doesn't want to see that happen.
That would be terrible for the aboriginal community."
Some of the same First Nations that support the APG are
also in talks with pipeline proponents Imperial Oil Ltd.
and its partners for separate deals called access and benefits
agreements. They involve fees paid for access to their lands,
construct and maintain the pipeline, as well as benefits
like contracts and jobs.
Mr. Kakfwi, a negotiator on
the deals for Fort Good Hope, said the key disagreement
is that First Nations along the route --the Gwi'chn, Sahtu
and Deh Cho -- want to impose a property tax of $47-million
a year, while Imperial is offering "small" one-time
payments. "We are trying to establish the fact that
aboriginal governments should have identifiable sources
of revenue to sustain themselves like other levels of governments,"
Mr. Kakfwi said. "Why should we be the only government
in Canada that lives on handouts and benevolent payments?
It's the principle.
The sum is in addition to $500-million
for socioeconomic benefits in the North pledged by the federal
government. "We never asked for the $500-million. We
always said we want to collect $47-million a year, and the
federal government came along with $500-million, and that
will help out, but our interest is in the $47-million,"
Mr. Kakfwi said. Imperial said the aboriginal deals, and
fiscal terms with the federal governments, must be ironed
out before the project moves into a lengthy public hearing
stage. Brendan Bell, the Energy Minister of the Northwest
Territories, was so concerned about the lack of progress
this week he called on Ottawa to step in and propose arbitration.
The pipeline's future has been uncertain since April, when
Imperial and its partners -- ExxonMobil Corp., ConocoPhillips,
Shell Canada Ltd. and APG -- halted all field work because
they were unhappy with aboriginal expectations and the readiness
of regulators to proceed efficiently.
If the pipeline is shut down,
aboriginals would lose the $500-million in federal money,
dividends from their stake in the APG and benefits in exchange
for land access, Mr. Reid said.