Canada pipeline report may help unlock federal funds

Thu Dec 31, 2009 3:37pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - A regulatory panel's conditional support for the Mackenzie gas pipeline in Canada's Far North could kick-start plodding talks between Ottawa and the project's backers over an expensive fiscal support package, a top Northwest Territories minister said on Thursday.

Those discussions have dragged on for nearly a year since Canadian Environment Minister Jim Prentice made a funding offer to the pipeline's proponents aimed at making the C$16.2 billion ($15.4 billion) project viable.

The Joint Review Panel's report, released Wednesday after more than two years of work, said the project could bring lasting benefits to Canada's North if pipeline backers, led by Imperial Oil Ltd, and governments follow the panel's 176 recommendations.

"The entire focus has been on the JRP getting that piece done and everything else was secondary until that was actually before us, we knew which way they were going to go and if there was going to be clarity," Michael Miltenberger, the territory's environment and natural resources minister, told Reuters.

"I anticipate that work will begin anew to deal with that particular issue."

The JRP assessed environmental and socioeconomic impacts of the 1,220 km (760 mile) pipeline, which would run along the Mackenzie River Valley in the Northwest Territories from reserves near the Beaufort Sea Coast in the Arctic to Alberta and markets beyond.

The panel's recommendations for governments and the companies backing the pipeline are as diverse as analyzing the impact of climate change on facilities in permafrost and assessing if alcohol and drug abuse programs in the sparsely populated region are adequate.

A media report in October cast doubt on Prime Minister Stephen Harper's cabinet backing a fiscal package, estimated to be worth billions of dollars, for the pipeline. However, top executives with the energy companies have said they were assured that talks were still on.   Continued...

<p>The sun sets over the Mackenzie Delta near Inuvik, Northwest Territories November 11, 2009. REUTERS/Jeffrey Jones</p>