Houston (Platts)--6May2008

Tapping major natural gas resources in the Canadian and US Arctic region
will improve North American energy security, speakers at the Offshore
Technology Conference in Houston said Tuesday.

"The combined northern gas reserves in Canada and the United States could
supply southern markets in Canada and the United States with 8 Bcf/d," said
Bob McLeod, energy minister in Canada's Northwest Territories.

McLeod said that the planned 1,100-mile, $16.2 billion Mackenzie Valley
Pipeline would connect Canada's Far North region to the integrated North
American energy market.

Randall Luthi, director of the US Minerals Management Service, said the
US should aggressively pursue energy development in the Outer Continental
Shelf off Alaska, as well as regions of the OCS currently closed to drilling,
including the eastern and western US coasts and the eastern Gulf of Mexico.

"Much of the future US demand can--and let me underline can--be met by
OCS production, particularly from new areas in Alaska and the Gulf of Mexico,
if we can survive the threat of hurricanes and survive the hurricane of
litigation that surrounds oil and gas development," he said.

Luthi said that the Alaskan offshore is relatively unexplored, with about
260 active leases on the Alaska Outer Continental Shelf and three producing
leases in the Beaufort Sea.

Such development, however, faces hurdles such as opposition from
environmental groups, Luthi said.

In February, MMS conducted the first Chukchi Sea lease sale in 15 years,
despite resistance from groups that said such development would harm the polar
bear. MMS had awarded 292 of 488 leases in the area by the end of April.

"I am confident that we as a group can develop these resources without
harm to the polar bear and the other species of concern as well as not
[interfering] with other traditional native uses of these resources," Luthi
said.

--Jim Magill, jim_magill@platts.com