Mike W. Bryant
Northern News Services

Yellowknife (Sep 09/05) - Premier Joe Handley says while skyrocketing gasoline prices will make it harder to run his government, there is a silver lining in it all.

"I think there's going to be more interest in developing frontier natural gas and oil in the future," said Handley.

Yellowknife resident Joe Lapka says he will keep paying at the pump no matter how high gas prices go.

"Whether it's ours, or Alaska's, or oil and gas found in the High Arctic. It will all eventually be demanded by market."

Much hinges on the proposed $7 billion Mackenzie Valley Pipeline. The territorial government is anxiously awaiting word on whether producers will proceed with regulatory hearings which are set to begin in early October.

Producers halted engineering work on the project last April, citing demands by negotiators for First Nations on access and benefits.

The federal government stepped in with a promise of $500 million for communities on the pipeline route and $31.5 million for the Dehcho to head off a threatened legal action.

Handley said the rising cost of oil and gas on the international market, which has seen pump prices climb by nearly 30 per cent in recent weeks, will boost interest in the pipeline.

"That is an opportunity for us," said Handley.

The premier said higher gas prices may give hydro energy a boost as well. The government wants to build hydro dams on the Taltson River, Bear River, and possibly even the Mackenzie River, to supply energy demands here and in the south.

"Hydro is our big opportunity," said Handley.

"It's the cleanest thing we have." Nonetheless, Handley admitted escalating fuel prices will lead to some difficult decision-making for planning next year's budget. He said the government isn't sure how much fuel costs will affect the budget, but he said everything from heating oil for schools to air travel will cost the government more.

He insisted that there will be no deficit or tax hikes next year. Yet, the price for items like campground fees and fishing licences may be going up.

"We're not going to get compensated from the federal government or anybody else, so it's either tighten our belt another notch in some areas or charge somebody else for it," said Handley. He said his government intends to embark on a public campaign to encourage Northerners to conserve gas and use less energy.

"We can all rationalize the (big trucks) we have as being essential but our grandparents didn't have them," said Handley.

"I tell you, the house I grew up in, where there were six children, my parents and sometimes a hired man, was a lot smaller than my office."