Diane Francis, Interview, National Post, July 9, 2010
Nellie Cournoyea is chairwoman and chief executive of the $300-million Inuvialuit Regional Corp., which has investments in construction, pipelines, trucking, airlines and real estate. She is the former premier of the Northwest Territories and also an ardent and passionate spokeswoman for her region.
She spoke to the Financial Post’s editor-at-large Diane Francis recently at the 10th Inuvik Petroleum Show about the frustration felt by residents of the Western Arctic. She is one of 3,000 Inuit who have special rights to Crown lands in the Inuvaluit Settlement Region along the Beaufort Sea, which is bigger in size than Nova Scotia and contains a treasure trove of natural gas.
That resource has been trapped underground for 25 years due to endless wrangles, but this fall, the National Energy Board is expected to approve the 1,200-kilometre Mackenzie pipeline to get it out. Next, Ottawa (the ultimate landlord) is being asked to provide loan guarantees to help oil companies finance the $16.2-billion pipeline.
 Inuit leader Nellie Cournoyea says the Mackenzie pipeline should have happened already, but keeps being delayed by different interest groups. |
Q Why has this pipeline been delayed for so long?
A We are a pawn in a game. The federal government has the power to just stop all this delay, which has made lawyers and consultants rich, but is hurting innocent people of the North. The game is that the DehCho [a First Nation band along the proposed pipeline route] will never settle [land claims]. They don’t want to. Every time they complain, the federal government throws money at them for studies and consultants. The Berger Pipeline Inquiry [1974-77] took years and imposed a 10-year moratorium. Then gas prices were lousy. Then a joint panel review extended the process years more. The panel has been fearful and [has] not taken responsibility.
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The high price of natural gas brought this latest iteration of the MGP to the fore in Canada in the early years of the previous decade. But natural gas prices have tumbled, driven down by economic malaise and more importantly, by the discovery of large volumes of natural gas in shales across North America. The economic justification for the MGP has collapsed in lockstep. And so too have the fortunes of the Alaska Gas Pipeline. Neither project was ever going to fly anyway, not without massive subsidies by governments. Even during the years of highest gas prices, Imperial Oil, the corporation taking the lead with the MGP, was unrelenting in its whining and appeals to the federal government to pony up more cash for the project. That was the best of times for gas producers, but you would never have guessed it from Imperial's bleating and pleading. The Aboriginal Pipeline Group (APG), which Nellie Cournoyea is speaking for in this interview, is itself the result of that lobbying for subsidies that the industry has sustained over the years. The natives were obstructive, so the APG was invented as a corporation comprised of aboriginal groups which would have an equity position in the MGP. Some of the money to buy them into the project came from the companies, and of course, part from the federal government. Now that they are in the door, the perspective has shifted - and here we have Ms. Cournoyea herself complaining about greedy self-interested First Nations. Sheesh. Thought I'd also point out that if you look behind Ms. Cournoyea and the APG, who are ostensibly making the pitch that Canadians should back off and fork over the money to grease this project into reality - there is Exxon Mobil (in its Imperial Oil guise), Conoco Phillips, and Shell, the real beneficiaries of this infrastructure. My prediction: the Mackenzie project will never be built. My track record? Don't ask. |
The Government of Canada has a perfect right to approve a right of way and take the land. Certain people and special interests will never want to move ahead and shouldn’t be able to manipulate the system when everyone else suffers. The government has been frightened and the same processes have been repeated year after year.
Q What about the environmentalists?
A They should want this pipeline because gas is cleaner and should be considered to be more valuable. The only people who make money are consultants and lawyers and people who sit on boards that keep this game going. Then there are the special-interest guys who want us to save the polar bear and politicians who want us, as a country, to look like we’re doing something. We’re caught in a vicious cycle. It’s demoralizing.
Q Is Alaska ahead on a pipeline and if it goes first, does that ruin the Mackenzie’s chances of finding gas markets?
A Both can happen, but they cannot be built at the same time. The state of Alaska is offering a lot to support a gas pipeline or the LNG [liquefied natural gas] option.
Q Will the Gulf of Mexico catastrophe affect the future of northern development?
A The natural gas is onshore. The offshore is where the oil is and is riskier. Imperial and BP had been having consultations with us to assure us that their blowout preventers are effective and will never fail. We have had two years of this. We never got a comfort level. Then this happened. We now want companies to bring us more assurance that the drilling is going to be safe, that they have methods to clean up on ice.
Q What’s the status of the pipeline partnership now?
A We [the Aboriginal Pipeline Group, with 33.3%] are partners with Imperial Oil/Exxon Mobil [39.6%], ConocoPhillips Canada [15.7%] and Shell Canada Ltd. [11.4%]. They’re saying the pipeline has got to be economic and we need a high rating on money that is borrowed or a loan guarantee. But the federal Conservatives are in a minority situation, so that is a possible problem.
The federal government will get royalties from this pipeline, so why would they want to give up those royalties? There are too many bureaucrats and it’s a very sad story. We have survived a lot of things — the whaling disappeared, the ban on seal hunting, epidemics and a lot of false starts on this project. We are ready to go, take the risk, put up our own money, do the work and do what’s necessary. We desperately need economic development in our region and this is an environmentally safe project. The feds should have the guts to make the decision to get this going. It had better happen.
Financial Post
