

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 05OTTAWA3349, ARCTIC GAS PIPELINES REACH KEY DECISION POINTS
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #05OTTAWA3349.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
05OTTAWA3349 | 2005-11-09 20:08 | 2011-04-28 00:12 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Ottawa |
This record is a partial extract of the original cable. The full text of the original cable is not available.
092038Z Nov 05
UNCLAS SECTION 01 OF 04 OTTAWA 003349
SIPDIS
SENSITIVE
DEPT FOR WHA/CAN (HOLST, NELSON) AND INR (SALCEDO)
USDOC FOR 4310/MAC/ONA
DOE FOR INTERNATIONAL AFFAIRS: PUMPHREY, DEUTSCH
DOI FOR OFFICE OF THE SECRETARY: PEARCE
E.O. 12958: N/A
TAGS: ECON ENRG EINV CA
SUBJECT: ARCTIC GAS PIPELINES REACH KEY DECISION POINTS
REF: OTTAWA 2951
SUMMARY/INTRODUCTION
--------------------
¶1. (U) SENSITIVE, BUT UNCLASSIFIED. NOT FOR DISTRIBUTION
OUTSIDE USG CHANNELS.
¶2. (U) Summary/Introduction: Both of North America's
proposed major Arctic natural gas pipeline projects - Alaska
and Mackenzie - are approaching key milestones:
- On the Mackenzie project, Canada's National Energy Board
has asked proponents to indicate by November 18 whether they
are ready to proceed to public regulatory hearings early in
¶2006. This project would begin delivering about 1.2 billion
cubic feet per day (BCF/D) around 2011.
- On the Alaska project, the State of Alaska reached
agreement on October 21 with ConocoPhillips on key fiscal
issues and is near agreement with the two other big
producers, ExxonMobil and BP. This line would begin
delivering 4-5 BCF/D around 2016.
¶3. (U) Most players would like to see both projects proceed
on these timelines, in part because Mackenzie would help
create capacity for Alaska by training construction workers
and ramping up pipe production. Constructing both projects
at the same time, on the other hand, is not desirable
because it would strain these inputs, increase costs, and
could depress revenue after startup.
¶4. (SBU) According to various reports, the Government of
Canada would prefer not to address key decisions on Alaska
until Mackenzie is underway. However, the lead private
sector player on Mackenzie - Exxon-controlled Imperial Oil -
stopped work in April 2005, is frustrated by the difficulty
of reaching agreements with native groups, and is said by
some sources to be unenthusiastic about the project's
economics. While an ExxonMobil VP told Ambassador Wilkins
on October 24 that he is confident Mackenzie will go first,
and ExxonMobil President Rex Tillingsley said the same in a
speech on November 8, some other players now tell us that
there is significant risk that Mackenzie's time line will
slip further, to the point that it might not proceed before
Alaska, meaning in effect that Mackenzie would be put off
for ten to twenty years. We have not been able to evaluate
the likelihood of this scenario. Its main consequence for
U.S. interests might be that GOC decisions on Alaska would
be held up in 2006-07 while the GOC struggles to rescue the
Mackenzie project. END SUMMARY/INTRODUCTION.
MACKENZIE PROJECT: BACKGROUND
------------------------------
¶5. (SBU) Exxon-controlled, Calgary-based Imperial Oil
Limited is the lead player on the Mackenzie Natural Gas
Pipeline project, which would bring gas from the Mackenzie
River delta down the river's valley through the Northwest
Territories and into Alberta. This is a relatively
straightforward construction route with few natural
obstacles and only three government jurisdictions involved
(Canada, the NWT and Alberta). The proposed pipeline is a
fraction the size of the Alaska project - it would carry 1.2
BCF/D of gas initially, expandable to 1.9 BCF/D.
¶6. (SBU) The main complication is the presence of several
native groups along the route which have land claims in
different stages of resolution with the GOC. These groups
see the pipeline project as a unique opportunity to
negotiate various economic benefits from governments and/or
directly from industry. While the GOC's Indian and Northern
Affairs Canada (INAC) is responsible for aboriginal "first
nations" and for territorial governments, GOC policy is to
"devolve" authority to these subordinate levels.
¶7. (SBU) Under cover of "devolution," the GOC has tended to
minimize its on-the-ground involvement (i.e. other than
injecting cash), and this has further encouraged native
groups to demand that private firms provide quasi-
governmental infrastructure such as schools and hospitals.
Companies are understandably concerned that this trend may
be going too far, and in particular that the GOC is not
facing up to certain key issues (such as determining the
native groups' jurisdiction to impose property taxes).
¶8. (SBU) In April 2005, Imperial Oil and the two other firms
involved in the Mackenzie Valley Producers Group (Shell
Canada and ConocoPhillips Canada), frustrated by native
groups' demands and unenthusiastic about the project's
economics, stopped much of their exploratory work in the
Mackenzie River valley and delta. Nevertheless, Imperial
continues to incur legal, negotiating and regulatory costs
on the project. An industry insider estimated the current
sum of these costs at around C$400 million (C$1 currently
equals about 84 U.S. cents).
¶9. (SBU) Since then, gas prices have strengthened and the
GOC has offered C$500 million over ten years to address
"socio-economic concerns" along the pipeline route
(distribution mechanism yet to be determined). On the other
hand, it is not clear how much closer native groups are to
final settlements on "benefits and access" agreements with
the companies. As one company official told us, no native
leader can afford to be perceived as not extracting the
maximum possible from this once-in-a-lifetime negotiation,
and with each group cutting a separate deal, none can appear
to be getting less than another. This makes for difficult,
never-quite-finished bargaining. A lesser problem, another
said, was that government departments/agencies conduct their
review of the project's regulatory application not through
independent research, but by requesting further information
from the companies ("getting the project to do their work
for them"). This source said that while this problem is now
under control, in early 2005, seventy percent of regulatory
interventions originated with federal officials.
STATUS: HOPING FOR HEARINGS IN 2006, FIRST GAS IN 2011
--------------------------------------------- ----------
¶10. (SBU) Currently, the optimistic timeframe for the
Mackenzie project runs as follows:
-- In coming weeks, companies and native groups achieve (and
hopefully announce) further progress on "benefit and access
agreements."
-- By November 18, the companies (the Mackenzie Valley
Producers Group, represented by Imperial Oil) notify the
federal-territorial Joint Review Panel (JRP) that they are
ready to proceed to public review hearings.
-- The National Energy Board holds a Pre-hearing Planning
Conference (Conference) in the Northwest Territories during
the weeks of 5 and 12 December to inform residents of the
NEB's role and to shape the public hearing process. If the
companies do not indicate their readiness to the JRP, this
conference will not take place.
-- Public hearings would run approximately from January-
July 2006.
-- The GOC then adds its comments and the application
proceeds to the National Energy Board in late 2006.
-- Realistically, the first flow of gas would occur in
2011 "even if all goes well."
MACKENZIE: GETTING CLOSER TO THE EDGE?
---------------------------------------
¶11. (SBU) Some of our pipeline industry contacts say
that Imperial is already unenthusiastic about
Mackenzie's economics, due to native groups' demands
combined with parent firm ExxonMobil's relatively
conservative outlook for natural gas pricing in North
America five to ten years out. Mackenzie's expected
delivery of 1-2 BCF/day is equivalent to one or two LNG
terminals, meaning that Mackenzie's market opportunities
could be "filled in" by a couple of the LNG projects now
being contemplated. (The Alaska project, being larger,
is less vulnerable to such displacement). On the other
hand, ExxonMobil's Vice-President for the Americas
assured Ambassador Wilkins on October 24 that Mackenzie
will proceed before Alaska and that "as long as the
parties remain in dialog then the project remains on
track." Speaking in Calgary on November 8, ExxonMobil
President Rex Tillerson told the Canadian American
Business Council that "my expectation is that we'll
ultimately get across the finish line" with Mackenzie.
¶12. (SBU) Despite these assurances, some well-placed
interlocutors have told us that it is now entirely
possible that the Mackenzie project will be delayed
indefinitely, mainly due to its possible interplay with
the Alaska pipeline. While public statements continue
to say that Mackenzie will deliver gas "by the end of
the decade," at least three or four years ahead of
Alaska, pipeline industry sources say that nothing
earlier than 2011 is realistic. This narrows the window
over which the Mackenzie line can be expected to be
serving a tight natural gas market. Moreover, the
closer the two projects occur in time, the more they are
likely to compete for scarce skilled workers, large-
diameter steel pipe, and other inputs, thus rising
inflation in construction costs.
¶13. (SBU) Because the Arctic construction season is
short, if Mackenzie's timeline slips even by a few
months, this might push construction and completion out
by another year. The implication is that if JRP public
hearings do not begin by February, the risk in terms of
eventual market price for the gas, combined with an
increased risk that the timeline will overlap with
Alaska's, could incline Imperial to put off the
Mackenzie project - at least until the continental
market absorbs Alaskan (and possibly LNG) gas supplies,
and promise to tighten again - which could take another
ten to twenty years.
ALASKA PROJECT: THE VIEW FROM OTTAWA
-------------------------------------
¶14. (SBU) The Alaska project will reportedly continue to
be far down the GOC's list of priorities until Mackenzie
appears to be well underway. Also, the GOC's Natural
Resources ministry has suffered from a lack of
leadership which is not fully resolved (reftel). Even
were it to focus on the Alaska project, the GOC would
not want to risk appearing to facilitate it at the
expense of Mackenzie. To complicate matters, there is a
growing possibility of an election campaign in mid-
winter, and the government is already in campaign mode.
¶15. (SBU) We expected the State of Alaska's October 21
announcement of a "base fiscal contract agreement" with
ConocoPhillips to renew pressure on the Mackenzie
players to settle their differences and move toward
public hearings. The subsequent controversy in Juneau
(over whether the agreement protected the State's
interests) may have had the opposite effect, encouraging
native groups in the Mackenzie Valley to believe they
have a further opportunity to hold out.
¶16. (SBU) Canadian energy patch observers continue to
agree that the GOC is focused on ensuring that the
Mackenzie project not only gets built, but gets built
before Alaska. As the Alaska project draws closer to
reality, the GOC will have increasing difficulty
avoiding its fundamental dilemma. That dilemma is
whether/how to choose between two regulatory regimes:
the 1970's-era "National Pipeline Act" process (which
TransCanada PipeLines asserts gives that company
exclusive rights to develop the Canadian segment of the
project), or the more modern and open "National Energy
Board" process (which would allow proposals by other
possible lead players, including TCPL arch-rival
Enbridge Pipelines Inc.) Previous Prime Minister Jean
Chretien went on record as having a preference for the
NPA process. Various observers suggest that by
remaining silent on this issue, the GOC is sending a
signal that regulatory applications can be filed under
either process - in effect, "letting the market decide."
ExxonMobil's VP for the Americas told Ambassador Wilkins
that he considers the GOC's silence to be
acknowledgement that both processes remain available to
project developers.
WILKINS