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Terry Halifax
Northern News Services
 James Firth, president of the Northern Route Gas Pipeline Corporation, says a recent analysis by the Canadian Petroleum Producers of the two proposed pipeline "totally missed the point." - Terry Halifax/NNSL photo |
James Firth, president of the Northern Route Gas Pipeline Corp. -- a subsidiary of ArctiGas Resources Corp. (ARC) -- said the study "totally missed the point."
Firth said the primary issue overlooked by the study is the issue of aboriginal ownership. He said without $1 billion in government loans to aboriginal groups, there will be no aboriginal participation in the Mackenzie Gas Project.
"We all have to be equal partners," Firth said. "Right now, the only people who can take advantage of this APG (Aboriginal Pipeline Group) proposal are the Inuvialuit, because they have the money and they have the gas."
"If we don't get our grants and loans, how are we going to get our share in the pipeline," he asked.
Forrest Hoglund, chairman and CEO of Houston-based ArctiGas, has worked over 40 years in oil and gas. The one-time Exxon vice-president of Natural Gas retired in August 1999 to take on the "over the top" pipeline route.
He said the over the top plan was what the producers wanted 25 years ago and the plan remains the best option today. He said building the Mackenzie Valley route and the Alaska Highway line is redundant.
"That's taking two pipelines to get to one answer," Hoglund said. "Those two pipelines cost twice as much as our one pipeline, so it's just simple, elementary business."
The key to the pipeline construction is tied to the sale of bonds based on shipping contracts. But producers have not signed any contracts and have showed no interest in the ARC plan.
Hoglund said the energy companies can't express interest because of political pressure.
"We've always assumed that the producers would be the last ones in," he said. "They wanted our route 25 years ago -- I fought very hard and we spent $250 million 25 years ago to get our route."
"Now, they can't openly back it -- with politics and such, they can't approach it."
Hoglund said the Alaskan route will cost the American taxpayers "$20 to $40 billion."
Russell Newmark, vice-president of E. Gruben's Transport was the chair and CEO for the Inuvialuit Petroleum Corporation when the $40 million Inuvik Gas Project pipeline first began in 1995.
Newmark said while the ARC proposal has some good points, there are three fundamental flaws that make the ARC plan a pipe dream.
He says the owners of the gas will not relinquish control of the pipeline.
"The gas belongs to the three big companies and the gas will go where they want it to go," he said.
Second, he says while an aboriginal group may approve in principal to the pipeline concept, there are other branches of the First Nation's government which also must first approve of such a plan.
"They have to stay true to their environmental obligations and true to economic obligations of their people," he said.
Thirdly, he said the ARC plan calls for the surrender of the landholders ability to tax, which Newmark says is the most important economic tool the groups have.
Firth said he couldn't comment on the tax issue but said he would look into it.
