Richard Gleeson
Northern News Services

Yellowknife (Apr 17/02) - If Alaskan Governor Tony Knowles gets his way with an Alaska Highway pipeline, gas in the Beaufort Delta will be stranded for a long time, said Premier Stephen Kakfwi.

"The exploration will cease, because there's absolutely no money in trying to develop Delta gas if Alaskan gas is going to be subsidized to that extent," said Kakfwi, speaking from Ottawa Monday.

Kakfwi was referring to a bill now before the Alaskan Senate, backed by Governor Knowles, that would allow a pipeline down the Alaska Highway to be financed through $17 billion in tax-exempt bonds. The bonds would be issued through the Alaska Railroad Corporation. Supporters of the bill say such a financing plan will save the pipeline owners more than US $1 billion.

The bill, the Alaska Natural Gas Project Act, is currently in committee hearings.

Kakfwi said that incentive would reduce the market price of Alaskan gas to below the price that could be offered for gas shipped from the Beaufort Delta down a Mackenzie Valley pipeline.

The consortium of producers proposing a Mackenzie Valley pipeline appear to have less concern about the deal being proposed by Alaska.

"I'm not aware of any impact that has had on our workplans," said Hart Searle, spokesperson for the Beaufort-Delta oil producers, of the financing proposal. "We're progressing with the work that is in front of us."

Kakfwi may have been betraying some frustration with the lack of support from Ottawa for the development of Canadian gas.

The statement came during an intensive three-day lobby effort for federal infrastructure dollars to support non-renewable resource development.

Kakfwi said the federal government is eager to see Canadian gas developed but unwilling to offer any support.

"They say, 'We're all excited about the pipeline, why can't you go faster?' My point to them is 'Where have you been the last two years?"

It was two years ago that the territorial government started lobbying the federal government for investment in non-renewable resource development.

Up until Monday, Kakfwi maintained there is no competition between the two pipeline proposals.

He said officials are examining whether the proposed financing incentive complies with the North American Free Trade Agreement.