by Doug Struck
05-12-05
A wind prickly with ice bit at Jonas Antoine, the grey-haired native elder.
The sting brought a broad grin to his face. "I feel like a wolf in this weather,
ready to hunt," he said, leaning against the driving chill.
The cold thrill of sneaking toward a keen-eared moose or snaring a lynx calls
him, but Antoine spends days in a stuffy gymnasium, debating with chiefs and
elders the looming invader from the north: a huge pipeline from the Arctic that
all agree would irrevocably change this land.
Soaring energy prices and profits have revived plans for two massive
pipelines -- the biggest private construction projects in North America -- to
bring natural gas hundreds of miles south from the frozen Arctic Ocean, through
vast untouched forests and under wild rivers, to the United States.
The plans would flood isolated areas of Alaska and Canada with thousands of
construction workers, pump billions of dollars into poor native economies, and
bring the roar of heavy cranes and bulldozers to pristine areas where it is now
quiet enough to hear the hoots of snowy owls and the rustle of pine boughs.
The projects are crucial to keep up with the growing thirst for energy in the
United States, say oil company officials and energy analysts. Supporters and
opponents agree that the projects would affect Canada's sparsely populated north
on a scale larger than the Alaska oil pipeline in the 1970s, and unleash a rush
of new exploration and drilling.
"Every square inch is going to be opened to diamonds, sapphires, gold, oil and
gas," Michael Miltenberger, the Northwest Territories minister of natural
resources, said in the territories' capital of Yellowknife. "There's an
insatiable demand. And the critical first step is the pipeline."
There are daunting obstacles before any construction begins: The two pipeline
projects are in competition for workers and capital -- only one can be built at
a time. Native groups in Canada have not yet given access rights;
environmentalists fret over caribou and the permafrost; and the pipeline
companies face a mountain of regulatory red tape and promised lawsuits. But the
huge profits in the energy business, and the unquenchable demand for energy in
the United States, have given the projects an impetus that may make one -- or
both -- projects unstoppable.
"The time and events are right. It would be very hard to turn your back on this
kind of supply," Miltenberger said.
Pipe dreams no more
Of the two lines, the Alaska Gas Pipeline is the behemoth. Its most likely route
would stretch 1,700 miles from Alaska's Prudhoe Bay to Canada's Alberta
province. The line would cost $ 20 bn and take a decade to build, but the
project has picked up momentum under the whip of Alaska Gov. Frank H. Murkowski
and $ 18 bn in loan guarantees approved last year by Congress.
The second line, the Mackenzie Valley Pipeline, would start 250 miles east of
the Alaska line, on Canada's portion of the Beaufort Sea. It would snake 800
miles through forests of spruce and pine along the Mackenzie River -- one of the
world's longest with no bridge or dam. This all-Canada route would cost $ 6 bn
and is predicted to take three years to complete once construction begins.
Both projects have been pipe dreams for three decades. Drillers who flocked
to the cold deserts of Alaska's North Slope after oil was discovered in 1968
also found vast deposits of natural gas.
But there has been no way to move the gas to markets; it cannot flow in the oil
pipeline. Oil producers proposed both the Alaska and Mackenzie gas pipelines in
the 1970s, but the plans died under the weight of rising construction costs,
dropping natural gas prices and -- in Canada -- opposition from native groups.
That has changed. Natural gas prices are now at all-time highs, greatly
enhancing the lure of profits. Every energy forecast shows a yawning gap between
supply and the rising demand. More natives of the north now see economic
opportunity in the pipelines, and their necessity is reluctantly being conceded
by even environmental groups.
"The economics are right. Everyone needs this supply to come on line," said John
Duncan, a member of the Canadian Parliament and the Conservative Party's expert
on natural resources. "The real question is which is going to be built first."
Industry analysts say the projects would require so much capital, steel and
skilled labour that it would be impractical to build both at the same time. The
projects have been jostling for position, sparking what former Alberta energy
minister Murray Smith has called "the great pipeline race." Oil company
officials would prefer the shorter Mackenzie line to go through first, but
delays have jeopardized that possibility.
Four reserves of Indians -- known as First Nations here -- are involved in
negotiations to permit the Mackenzie line to cross their land. The four oil
companies behind the project have agreed to give First Nations a one-third share
of the line, and the federal government in July offered $ 425 mm for native
social programs as an incentive. But the bands are split over the proposal.
Native claims
Antoine, 64, is a member of the Deh Cho, a band of about 4,000 members on land
centred at Fort Simpson, a quiet town on an island accessible by ferry in the
summer and by a road carved on the river ice in the winter. He grew up hunting
caribou and moose, snaring rabbits and cutting holes in the ice to fish in the
winter. He remembers a hard life, remembers being hungry when the game
disappeared. But he is wary of the coming pipeline, and the change it will
bring.
"You can still have freedom to roam here. You can travel for 100 miles without
running into any other tracks, camping wherever you want, drinking out of any
stream," he said of the Deh Cho lands.
Herb Norwegian, the blunt chief of the Deh Cho, said his people see no reason
why they should not get what they want from oil companies making huge profits.
He has asked for fees, royalties and jobs, but his fundamental demand is of the
government, which has yet to settle Deh Cho land claims.
"If the pipeline is going to pass through our land, the government has to treat
us like the landlords," Norwegian said.
Not all agree with him. Harry Deneron, 63, a member of the Deh Cho group of
chiefs, said change already has come, and the First Nations people should
benefit.
"Our people will be the first to complain if their hot-water heater goes up," he
said with a laugh. "We should accept the pipeline, with conditions. We have to
compromise. This has gone on too long."
Either project would march a small army of construction workers into the north
for several years. They would carve roads, haul steel, dig a trench through the
permafrost and bury the pipeline before departing. The Alaska Pipeline project
alone would be more than double the size of the 800-mile-long trans-Alaska oil
pipeline finished in 1977, which took 21,000 construction workers three years to
build.
Towns along the pipeline routes grimly expect the construction tobring
inflation, drugs and crime along with the economic boost for their rural
economies. In Yellowknife, two new diamond mines have sent rents soaring and
brought cocaine to the streets. In November, the town experienced its first
drive-by shooting.
"We know things are not going to work perfectly. They never do," said Bill
Braden, a member of the territorial assembly in Yellowknife. "But the pipeline
would give the communities and people of the Mackenzie Valley and Delta hope for
the future. Right now, if I was a teenager, I wouldn't see a whole lot of reason
to stay in the area."
Making a choice
The bigger footprint, after the construction crews have left, will be in opening
the mineral-rich area to further exploration and development. Mostly for that
reason, some environmentalists favour the Alaska Pipeline, which follows the
route of the existing oil pipeline and Alaska Highway.
"We think it's the lesser environmental evil," said Stephen Hazell, a director
of the Sierra Club of Canada. Environmental groups have largely bowed to the
inevitability of at least one of the projects.
"Natural gas is clearly better than coal or oil," said Peter Ewins, a director
of the World Wildlife Fund of Canada. "In principle, we are not opposed, if the
development is done in a properly planned and well-balanced way."
The natural gas from either line would be fed into a grid of pipelines in
Alberta that connects the United States and Canada into a largely seamless
single market. Oil company officials say the soaring demand is in the United
States, and that is where the gas would go. But some environmentalists suspect
that the Mackenzie pipeline, in particular, would feed the huge oil-sands
project in Alberta. There, natural gas is used to cook strip-mined tar sludge
into recoverable oil, a process environmentalists say is energy-inefficient and
increases global warming.
"If we were convinced the gas was going to be used in people's homes to replace
coal-fired energy, we would be much more sanguine about it," said Hazell.
Despite its much larger size, the Alaska Gas Pipeline could move more
quickly. The oil pipeline and highway along the proposed route already have
cleared the way with access rights, aboriginal land claims and environmental
reviews. Since the 1970s, the TransCanada pipeline company has held rights to
one route in Canada, and has laid groundwork on the Alaskan side as well.
"The gas market in North America really quite desperately needs this gas,"
TransCanada Chief Executive Hal Kvisle, said by phone from Calgary. "We think it
would be quite foolish not to use" the company's access rights to speed up the
project.
Speed is what Alaska's Gov. Murkowski wants. He has made it a personal goal
to find a way to get Alaska natural gas to market, foreseeing a second wave of
the riches that poured into the state with the oil pipeline. All Alaskans still
receive a yearly dividend check from the oil pipeline royalties.
"We are approaching an historic moment -- moving from 30 years of trying, to the
reality of a gas line," the governor told recently. He has proposed a novel
sharing of ownership in which Alaska would have a 20 % stake in the line.
"We're going to do it right this time," the governor said after emerging from
negotiations with the Prudhoe Bay producers Exxon-Mobil and BP. He already
agreed to terms in October with a third company, ConocoPhillips.
"The country needs the gas," he said. "This is the time."
Source: www.washingtonpost.com