Mike W. Bryant
Northern News Services

Yellowknife (Sep 20/02) - A proposed subsidy on Alaskan gas may not be dead after all.

Minister of Resources, Wildlife and Economic Development Jim Antoine was in Washington last week to convince the U.S. State Department, legislators, and oil and gas representatives, not to support a joint Senate-Congress energy bill that could give an Alaskan pipeline route up to $31 billion in subsidies and loan guarantees.

The GNWT is trying to sway U.S. administration to support the territorial government's own ambitions to have the cheaper Mackenzie Valley Pipeline built first.

Last June the U.S. Secretary of Energy Spencer Abraham threw cold water on the energy bill, saying the Bush Administration was not in favour of subsidies and might veto the bill if legislators attempt to pass it.

However, the bill is still heavily supported by the Alaskan State government and some oil and gas producers, and may be voted on as early as the end of September.

Antoine was also concerned about a suggestion made by oil magnate British Petroleum for the U.S. to offer a "tax credit" on the construction of the well-head in Prudoe Bay, Alaska, as opposed to the pipeline itself, which he is worried may encourage the Bush administration to take a second look.

"They're saying there's a lot of discussion about it. They're still looking at it," said Antoine. "At the end of the day we don't know what's going to happen."

But Antoine is hopeful the GNWT still had a wild card up its sleeve, referring to reports last week that Imperial Oil plans to fast-track development of the Mackenzie Valley Pipeline by 2007, regardless of any subsidies on an Alaskan route.

"They are committed to moving it ahead despite what's going on down here, which is a good signal for us," said Antoine.

"Constructing a pipeline is a complex undertaking," said Imperial Oil spokesperson Hart Searle. "It requires a multi-phased effort, and may result in natural gas production starting in 2008, possibly as early as 2007."

He added it is too difficult to predict how long the pipeline may take to gain approval during the regulatory phase, and may take even longer to build.