Terry Halifax
Northern News Services

Inuvik (May 17/02) - The Arctic Gas Resources Corp. made a presentation to the Inuvik Native Band on Monday night which outlined the details of how their "Over the Top" pipeline would be constructed.

Managing Director Bruce Hall said the project offers far more benefits to aboriginal groups and would be cheaper for producers to transport gas in.

Hall made a presentation on an overhead screen that showed the pros and cons of both lines.

One of the key points was financing the projects. The Arctic Gas project would be 100 per cent debt financed through the sale of bonds, which Hall says would be an advantage over the APG proposal, because the aboriginal groups would not be liable in the case of cost over-runs.

For the Mackenzie- only line, Hall said the aboriginal groups would have to borrow $1 billion and the returns would be less than one per cent on the investment.

"It's unbelievable that the producers would even come up with an idea like this," he told the crowd. "They think you're a bunch of fools."

"They lied to you 25 years ago and they continue to do so."

Hall says the larger scheme by Imperial Oil and its American parent company ExxonMobil, who propose the Mackenzie-only line, but will change the plan to tie in the Alaska line, once the Mackenzie only route has been approved.

"They will develop the Mackenzie and prior to the signing, they'll have an open house and say to the Alaska group: 'You want to put your gas in our line?'"

"That's what's behind this."

An extension on the Mackenzie line to Prudhoe Bay would be an additional 350 miles of pipe, as opposed to the 2,100 miles of pipe from Prudhoe Bay to Chicago.

U.S. political pressure

The controversial energy bill before the U.S Senate right has an amendment that would set a guaranteed price for Alaskan natural gas delivered to the lower 48 states.

Natural Resources Minister Herb Dhaliwal hinted that Canada may impose the same subsidies on Canadian gas, if the Americans went ahead with the plan.

Liberal MP for the Western Arctic Ethel Blondin Andrew said the Canadian government can't consider subsidizing Canadian gas in a pipeline that hasn't been built or even submitted for regulatory approval.

"We have not had a proposal yet to the National Energy Board, so without a proposal, there is nothing to subsidise," Blondin-Andrew said. "The government can't just do something, when there's nothing to respond to."

"We are very cognisant on what is happening in the U.S. on softwood lumber, on steel, on agriculture and on these (natural gas) subsidies," she said. "Our trade minister (Herb Dhaliwal) is very busy with that file."

She says there has been a shift in the new administration that is starting to look like a trend to trade wars.

"It seems to be a retrenchment of the Americans, from a very liberalized trading mode, to a very protectionist mode," she added.