Richard Gleeson
Northern News Services

Yellowknife (Feb 08/02) - U.S. lawmakers should not be trying to influence pipeline decisions with subsidies and tax incentives, deputy premier Jim Antoine told U.S. legislators in Washington earlier this week.

Jim Antoine: Industry should decide where the pipeline is going to go and if it is going to go.

"Our position is that the industry should decide through their economic feasibility studies where the pipeline is going to go and if it is going to go," said Antoine said.

"We leave it up to industry to decide. We don't legislate. Some quarters here are seeking to subsidize the building of a pipeline in Alaska."

Speaking by cell phone Wednesday as he walked between meetings, Antoine was referring to proposals by Alaskan representatives to subsidize a pipeline down the Alaska Highway.

With Hay River MLA Paul Delorey, Antoine was paying the territorial government's first official visit to the U.S. capital since the election of George W. Bush as president.

The new Republican administration is taking an aggressive approach to the development of domestic energy supplies in an effort to wean the country off Middle Eastern oil.

Alaskan Senator Frank Murkowski is using the same argument to support his call for government incentives for construction of a pipeline that would transport Prudhoe Bay gas along a route following the Alaska Highway. Last year, producers concluded the route was not economically viable.

While in Washington, Antoine and Delorey met with Murkowski, Wyoming Senator Craig Thomas, Colorado Senator Benjamin Knighthorse Campbell, State Department officials and industry representatives.

The Alaskan government has attempted to thwart a main threat to that route -- an offshore link to the proposed Mackenzie Valley pipeline -- by outlawing undersea pipelines along its Northern coast.

Antoine said Murkowski is under pressure to produce something for the State to bolster his run for the office of governor.

"He has to find a way to deliver something before the election next November in Alaska," Antoine said. "So he's got a big issue he wants to keep moving forward."

The incentives being offered have so far failed to sway Prudhoe Bay producers.

At a U.S. Senate committee hearing last October, ExxonMobil president Terry Koonce took much the same view as the GNWT.

"If a project is determined to be economic in a normal market environment, no special incentive or subsidy is necessary," Koonce testified. "If a project is not economic, our preference is to try to improve it through our own actions or wait until the market conditions support the project."

Exxon Mobil holds the largest reserves of natural gas on the North Slope.