Thorunn Howatt
Northern News Services

Yellowknife (Sep 23/02) - There will be no Mackenzie Valley pipeline until the Aboriginal Pipeline Group is on board. And the APG can't get on board until it has money.

The $70 million question is: When will the APG have the money.

Former Alberta premier Peter Lougheed spoke at a Yellowknife Chamber of Commerce luncheon last week. He was in the city to meet various groups including the Aboriginal Pipeline Group about finding $70 million in pipeline money. - Thorunn Howatt/NNSL photo

"Not within the next week or two," said former Alberta premier Peter Lougheed, but he added the feds will probably ante up within the next two months.

"You can't have this without aboriginal involvement," he said, referring to a pipeline that would carry Arctic natural gas southward following the Mackenzie Valley.

The Aboriginal Pipeline Group, a contingent made up of aboriginals from NWT regions, wants one-third ownership in the scheme.

Lougheed is helping it get the cash for the $3.3 billion project. He is lobbying the federal government on behalf of the APG for federal loan guarantees. The APG's most immediate need is for $70 million -- its one-third share of the cash needed to complete community consultations, environmental and engineering research.

And Lougheed seemed pretty sure the APG will get it.

"It's clearly in the interest of the federal government," he said.

Lougheed spoke at a Yellowknife Chamber of Commerce luncheon last week. He was in the city on a three-part mission: To meet with the APG about the pipeline money; meet with NWT finance Minister Joe Handley about hydro electric power; and talk to the Government of the NWT about its progress toward devolution. Devolution is the decentralization of governmental power and the transfer of resource revenues from diamonds, gold and energy. But the pipeline was the topic most of the audience came to hear him talk about.

Imperial Oil Resources is leading the Mackenzie Delta Producers' Group toward building the Mackenzie Valley pipeline. But the consortium wants aboriginal consent before it goes ahead with the project.

Until now, solid aboriginal support was a missing ingredient in the attempt to build the line. The producers' group's best chance of bringing aboriginals on board is by giving the APG one-third ownership in the line.

But the aboriginal group doesn't have money for the big-time venture. And it demands equitable participation.

"They have to get a fair arrangement from the producers," said Lougheed.

The $70 million for research is probably the APG's biggest cash-related hurdle because there is nothing to secure the money with. Those funds are needed for community consultations, environmental and engineering studies before a rock-solid commitment is made.

There's no guarantee to lenders they will get their money back because the pipeline isn't a sure thing yet.

That's why the APG wants a loan guarantee from the federal government and that's why they recruited Lougheed to help them get it. Lougheed was the man in charge of energy-rich Alberta when deals were made to secure the province's wealthy future.

He set up a trust fund securing energy royalties and made sure cash stayed in Alberta.

Imperial Oil Resources officials say they want gas flowing down the pipe before the end of 2007. The urgency is partly because of a competing proposal coming from Alaskans. Americans are pondering an energy bill that could include subsidies which make a natural gas pipeline following the Alaska Highway very attractive.

"If the Alaska pipeline goes ahead before a Mackenzie Valley pipeline then a Mackenzie Valley pipeline will be delayed a very significant number of years," said Lougheed.

The Americans have set a deadline for themselves to complete the energy bill by the end of the month.

If the Mackenzie pipeline project goes to the construction phase -- and it looks like it will -- the APG will need another $1 billion.

"There are going to be a lot of twists and turns in the road," said Lougheed.