The $21-million benefits deal between the Northwest Territories and gas companies for the proposed Mackenzie Valley pipeline has some challenging the Yukon Party government’s commitment to its ‘pan-northern’ agreements.
The NWT will participate in the Canada Winter Games thanks to Premier Dennis Fentie’s “pan-northern approach,” but there doesn’t appear to be a two-way street when it comes to oil and gas deals, said Liberal leader Arthur Mitchell.
“I was disappointed when the NWT and the pipeline companies finally produced an impacts and benefits agreement … there’s not one mention of the Yukon,” said Mitchell on Thursday.
“I’m saying, ‘Show me the beef.’”
Mitchell’s criticisms are fuelled by an agreement signed by the Yukon and NWT in 2003.
The pact commits the two governments to work together on both the Mackenzie and Alaska Highway projects to benefit all residents, regardless of which pipeline goes first.
At the time, Fentie boasted the agreement was proof his much-hyped pan-northern approach worked, said Mitchell.
But the lack of Yukon in the Mackenzie agreement proves Fentie’s boasting hasn’t delivered results, he said.
“The comparison is the Canada Games, which was also ‘pan-northern. There’s real, tangible results — the other two territories are joining with us in the Games,” he said.
And he noted that Jim Antoine, who signed the deal for the NWT with Yukon Energy Minister Archie Lang in 2003, is in Whitehorse to oversee the NWT’s involvement in the upcoming Games.
“It’s too ironic,” he said dryly.
The socio-economic deal the NWT signed with four oil companies on Tuesday has taken three years to reach.
While it isn’t a green light for the pipe, the agreement does commit Imperial Oil, Shell Canada, Conoco Phillips and ExxonMobil to provide $21 million over 30 years to train NWT residents for jobs if the project is built.
It also formalizes earlier commitments by the oil and gas companies to hire 806 NWT residents per year while the pipeline is constructed, and to spend nearly $1 billion on local construction materials.
Despite Mitchell’s concerns, the Yukon hasn’t forgotten the 2003 deal and is trying to strike its own pact with gas companies, said Brian Love, director of oil and gas with Energy, Mines and Resources.
“We’ve been very active on the Mackenzie project over the past three or four years,” said Love on Thursday, adding that Mitchell’s worries were “poorly informed.”
Two weeks ago, the Yukon government wrote Imperial Oil — which has been heading discussions with the NWT — asking when the two sides can meet to sign a socio-economic agreement for the Yukon, he said.
“We’ve been meeting with Imperial Oil over the last one-and-a-half years, and we’ve been participating in the hearing itself,” said Love. “So it’s not like we haven’t been in the game; we’ve been very active in the game.”
Because the Mackenzie project is within the NWT’s borders, the gas companies are primarily interested in negotiating with the NWT, said Love.
If the Alaska Highway pipe goes ahead, the situation will be reversed, with the NWT having to negotiate its own separate deals with the oil and gas industry, he said.
“It’s going to be an agreement with the Yukon government and those proponents,” he said of the proposed Alaska Highway pipeline.
“If other governments want to be involved … they’re going to negotiate those agreements with the proponents as well.”
The main goal of gas companies is to get the gas they own in NWT south to the Canadian and American markets, said Love.
“But this is a basin-opening pipeline, and that’s what we’re looking for,” he said. “We want to make sure that North Yukon gas can get into that.”
Most of the Yukon’s natural gas and oil reserves are in the Eagle Plain and Peel River plateau areas, much of it unexplored.
Chevron and Northern Cross have exclusive right to explore and develop parts of Eagle Plains, and Hunt Oil has similar rights for the Peel plateau, said Love.
If that gas were tapped, the Yukon is pushing for a deal that would see a lateral pipeline running east to link with the main Mackenzie network, he explained.
While he is aware the Yukon is still working on its own deal with the gas companies, that’s not good enough, said Mitchell.
“I trusted the premier; he promised to take co-operative measures to support future pipeline development in both Yukon and NWT, and the agreement said there’d be a lot of work for Yukoners if the Mackenzie project went ahead,” he said.
“At what point do we wait to until we say, ‘Wait, it’s not happening?’
“It’s great if there’s going to be future announcements that include the Yukon, but I’m concerned that this one didn’t,” he said.