FAIRBANKS, Alaska — The federal government will likely have a concise, two-word message for Tony Knowles, the Governor of Alaska, when he comes to Ottawa next week to discuss an Arctic gas pipeline.
Still officially neutral when it comes to the alternatives for developing Alaska gas, the Prime Minister has indicated on at least one occasion to U.S. President George W. Bush his desire to see the Canadian route through the Mackenzie River Valley come to fruition.
Knowles has attempted to hamstring the economically superior Canuck option, often referred to as the Northern or Over-The-Top route, by introducing a ban on any line that would cut under the Beaufort Sea — a key element of the proposed line.
Yesterday he was in Washington appearing before the Senate Energy Committee and trying get that ban embedded in President George W. Bush’s Energy Bill.
Knowles prefers the Alaska Highway route across his state and through the Yukon even though Alaskan gas producers — Exxon Mobil, BP and Phillips Petroleum — last week estimated that route to be US$2-billion more expensive than the Northern route.
They estimated the Northern route would cost US$15.1-billion. And this includes no allowances for the synergies of piggybacking Canadian gas from the Mackenzie Delta, which would both improve the economics of the line as a whole and make it cheaper to get Canadian gas to market.
The Alaska Gas Producers have declared themselves staunchly opposed to choosing a line on political rather than economic grounds. As their representative, Curtis Thayer, has said: “If a route is mandated, the chances of a gas pipeline are reduced.”
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