Mackenzie pipeline on thin ice

New shuttle tankers could render the Mackenzie pipeline plan obsolete within a decade. “Others are already not only thinking about new…

New shuttle tankers could render the Mackenzie pipeline plan obsolete within a decade.

“Others are already not only thinking about new transportation issues in the North, but are already preparing and doing,” said Rob Huebert, the associate director of the Centre for Military and Strategic Studies at the University of Calgary.

Huebert startled the audience at Whitehorse’ Advantage North conference on Tuesday with news that other circumpolar countries are well ahead of Canada in thinking outside the pipe.

“The Russians are looking at this to avoid building pipelines,” he said, showing a slide of an Aker Arctic shuttle tanker design.

“The idea being that rather than building pipelines to carry gas, you simply have offshore terminals; you bring these vessels in that can go into first- and second-year ice, and you then take it into the shipping areas,” Huebert said.

Two tankers currently under construction in St. Petersburg are slated to begin making trips in late 2007 or early 2008 between the Prirazlomnoye oil field in the Arctic Ocean and the Murmansk shipping hub.

The Finnish-designed Arctic shuttle tankers wouldn’t yet be capable of going into Canada’s multi-year ice, but could easily manage the Beaufort Sea.

The Americans are looking closely at these ships, Huebert said.

They’re also eyeing the Northwest Passage as a route from their offshore oil and gas to the eastern seaboard.

“If the pipeline debate goes on too much longer, are these (the tankers) an alternative?” Huebert asked.

In the keynote address earlier that morning, the department of Indian and Northern Affairs re-affirmed Canada’s commitment to the Mackenzie Valley pipeline.

The Mackenzie pipeline “is without a doubt the largest economic opportunity in the history of the North,” and “will have the full support of the government of Canada if it proves to be economically feasible,” said interim regional director (Yukon) Elizabeth Hanson.

It’s not, said Exxon Mobil chief executive Rex Tillerson.

The ballooning cost of raw materials, particularly steel, has made the pipeline too costly for the time being, he told Reuters on Wednesday.

If the Canadian government doesn’t step in to give the oil and gas companies “enough room,” ostensibly through corporate tax breaks, the Mackenzie Valley pipeline project will “have to wait,” Tillerson said.

Ottawa should become a partner in the pipeline project, as it did on the Norman Wells pipeline project, Western Arctic MP Dennis Bevington told the house, responding to Exxon’s concerns.

Delays caused by talking about the pipeline project is helping to make it obsolete, said Huebert.

“We are dealing with a state of flux,” he said. “We are dealing with both very promising opportunities, but also very damning challenges if in fact we miss some of the events that are occurring.”

Nunavut, the Northwest Territories and the Arctic offshore areas hold an estimated one third of Canada’s natural gas and one quarter of the country’s recoverable crude oil.

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