Kerry McCluskey
Northern News Services

Iqaluit (Nov 25/02) - Buyer beware -- that's the nasty lesson the Government of Nunavut learned this year after forking out $4 million to smooth over the bad gas fiasco.

Last year's gas supply, provided by the Northern Transportation Company Limited (NTCL), was missing a crucial cleansing additive. The fuel caused widespread engine trouble in both the Kivalliq and Baffin regions.

Finance Minister Kelvin Ng broke down the government's bad gas related expenditures last week. He said of the overall $4 million spent so far, $1.6 million was paid to Nunavummiut for compensation for damages to 1,308 two-strokes engines.

An additional 59 claims for four-stroke engines were submitted, although Ng stated they will not compensate owners who claim their larger engines were damaged.

That decision was based on test results issued by the Alberta Research Council that indicated the faulty gas did not cause trouble in four-stroke engines.

An additional $1.7 million went towards expenses the government incurred on the loss of the sale of the gas.

Another $200,000 was spent on appraisals of two-stroke engines and $200,000 was earmarked for the potential income loss experienced by hunters.

Ng added that another "couple hundred thousand dollars" was used to pay for the testing of the gas and for internal expenses incurred by the Petroleum Products Division of the Department of Public Works. The hit the government took after dropping territorial gas prices by 30 per cent during the summer and fall has not yet been factored into the total dollars spent.

Recovering costs

Ng said he was optimistic the government's insurer would help recover some of the $4 million spent to date.

And, while NTCL paid $860,000 to ship 7.1 million litres of faulty gas back to the refinery in New Jersey, Ng said the government intends to ask the shipping company to cover more of the costs.

"We still think with the shipper/supplier, there is some hope for cost recovery. We expect NTCL to help cover costs. We think there is some obligation for them to do that. When the final numbers are in and we can have a total tally, hopefully NTCL will come to the table," said Ng.

However, Ng said he was told three weeks ago by NTCL that they do not intend to pay any additional dollars.

"They've basically said they've paid their $860,000 to get the gas out of here and that's it. Obviously, we're going to have to look at pursuing our interests," he said.

Kirk Vander Ploeg, an NTCL manager in Iqaluit, said NTCL would not comment about the negotiations while they are ongoing.

If there is good news to be found in the bad gas situation, it's that new government standards were implemented this year for testing the quality of gas when it arrives in Nunavut.