Fort Simpson (May 06/05) - Imperial Oil's announcement that it is halting engineering and geo-technical work associated with a proposed Mackenzie Valley pipeline sent shockwaves through the business community but registered as merely a ripple with First Nations leaders in the Deh Cho.

On April 28, the multi-national oil and gas company proclaimed that financial demands being placed on the $7 billion project are too great and the regulatory process is too slow.

However, Imperial Oil committed to focus its future efforts strictly on advancing the regulatory review process and negotiating benefits and access agreements with First Nations.

The company stated that "substantial progress" must be made if the pipeline is to proceed.

Herb Norwegian, grand chief of the Dehcho First Nations, said Imperial Oil is simply employing "corporate tactics" that have been used elsewhere.

"It's a guilt trip, getting the First Nations to think, 'God, this is a terrible thing that we've done. Maybe we should just drop all our demands and just cave in,'" the grand chief said. "So we're sticking to our position."

Keyna Norwegian, chief of the Liidlii Kue First Nation, said she's not worried either.

"I don't think it's a big deal," said Keyna Norwegian, who is also president of the Deh Gah Alliance Society, which will negotiate pipeline benefits on behalf of the Deh Cho's pipeline communities.

"The thing I'm pleased about is that they are seriously looking at sitting down and talking about the access and benefits part."

There has been talk of Imperial Oil forming one model to negotiate equal benefits with all NWT regions along the pipeline route. Norwegian said that would be "a starting point."

Duncan Canvin, president of the Fort Simpson Chamber of Commerce, interpreted Imperial Oil's announcement as dire.

He said this delay could allow an Alaska-Yukon pipeline to overtake the Mackenzie project in momentum. That could postpone the NWT pipeline for 20 or 30 years, he warned.

Canvin said intervenors - like municipalities and First Nations - have piled "200 million caveats" on the pipeline and bogged it down.

"Everybody wants to get rich off this one little project," he said.

Environmentally, he referred to the pipeline as "nothing other than another trench. Enbridge has shown that they can do one safely."

After the millions of dollars Imperial Oil has invested and the engineering contracts it has awarded, Herb Norwegian said he doubts the company will pull up stakes.

Keyna Norwegian agreed that the project won't be shelved by the proponents.

"The annual income projected to come out of this is phenomenal. They're expecting to make millions and millions of dollars per year on this thing," Keyna Norwegian said. "I think it's going to happen, but I'm just hoping it happens in a good way."

Canvin countered that industry regularly spends millions on "dry holes" in search of oil and gas and walks away. Imperial Oil's expenditures to date are minimal in comparison to the $7 billion it would cost for the pipeline, he contended.

Ross Papirnick, communications and consultation advisor for the Mackenzie Gas Project (MGP), said despite last week's announcement the MGP office in Fort Simpson will remain open and all three of its employees will stay in place.

"We just respond to the needs and questions that people have. That's our main role and that won't end," he said.