SOME QUESTIONS ABOUT THE ARCTIC GAS PIPELINE ARCTIC GAS PIPELINE Why one is better than 2 IN DE X Page \ \\ AN ENERGY DECISION \ THE ARCTIC FOR CANADA ••••••••• GAS PROJECT. • • •••• 2. • • •••••• • 2. ······:·:n. • •• ,I / / / / . ~· :• 'IWO. • • • ••• ARCTIC GAS AND ALCAN: WHY ONE IS BETTER THAN E• ENERGY AND ENVIRONMENT: A HOLISTIC APPROACH• • • • • • • • • • • • •• • •• O:.• \ ', \.,~. ARCTIC GAS2,395 miles ALCAN - 2,770 miles ALCAN PLUS DEMPSTER3,230miles AREA OF PROSPECTIVE OIL & GAS RESERVES • •• :i. ~ .:, I ~... { ·~ 7. 8. THE NEED FOR ENERGY• • • • • • • • • • • • • • " •••• 11. ANOTHER ENERGY CRUNCH COMING? ••••••••• 13. THE DELTA GAS SUPPLY. •• •• •••• •• ••• • •• • THE NATIONAL •••••• BENEFITS THE NORTHERN BENEFITS ••••••••••• ••••••••••••••••• 15. 16. 20. -. \~ .._\ . 1 ··l :>· ... -~ - \: The Arctic Gas route for the transportation of natural gas from the western arctic is 835 miles shorter than the Alaska highway and Denq:,ster routes. It would also reduce by hundreds of additional miles the pipeline construction required to connect future gas discoveries along a 1,200-mile sedimentary belt stretching from the arctic coast to Alberta . Arctic ecologist Dr. L . c. Bliss of the University of Alberta says that this "holistic approach of a single northern gathering system bringing gas from the known and highly economically probably new and fields probably in one socially pipeline ." is th e most sound ecologically, environmentally, AN ENERGY DECISION FORCANADA The Government of Canada pipeline applications . for the from the western arctic. wi ll decide transportation The optimum ad vantages: -at soon on competing gas of natural -- provide by northern peoples. eq,loyment residents, -- create i mportant economy, incl uding act ivi t y . benefits j obs and for the industrial selected offers th ese shortest alternative of both Delta mountain ranges, and is for pipeline construction Sponsors of the Arctic Gas project began initial studies on the transportation of natural gas from the western arctic in 1970. Four years later, in March, 1974, applications for were approval to construct the proposed Arctic Gas pipeline filed with the governments of both Canada and the United states By 1977, expenditures by Arctic Gas sponsors amounted to $130 million. This included more than $60 million for engin er~ng, design, construction and route studies, and 7 $20 million for the most extensive environmental research rrogram condu ted by industry. ~t~er major expenditures inc~uded studies7 of northern regional socio-economic matters national economic effects, and financing as well as the cost' of regulatory procedures. and fuel, 200,000 and other opportunities sought both native and non-native economic increased been c~ossing numerous -- It avoid~ thus less difficult and costly and operation. construction across the north by possibly as much as 2,000 miles; -- reduce the use of land, steel, horsepower sa v ing annually enough Canadian gas to heat Canadian homes; has -- rt could connect future gas discoveries along 1 200 miles of . sedimentary basins from Prudhoe Bay, alon~ the arctic coast and up the Mackenzie Valley to the Alberta border. the only presently a~sured means of Delta gas to Canadian consumers; reduce pipeline least 800 miles, that -~ rt.is 835 miles shorter than the pipeline routes for the transportation and Prudhoe Bay gas. Arctic Gas belie ves that a single pipeline to transport natural gas from both the North Slo~ of Alaska and the Mackenzie Delta will best ser ve the interests of Canada because it will: -- provide transporting route Canadian THE ENERGY OF EIGHT JAMES BAY PROJECTS of the Arctic Gas pipeline will . The m~in ~ine portion 48-in~he~ in di~meter with a design gas supply volume of 4.5 billion cubic feet per day. This is equal to the daily energy output of eight James Bay hydro-electric projects. THE ARCTICGAS PROJECT Arctic Gas has spen t more tha n s even years of investigation ga• and study to determine the bes t ro u t e to transport natural from the western arctic of Canad a and Alaska. 2. be th The pipeline will stretch 2,400 miles -- 200 miles along e ~laskan coast would be owned and operated by Alaskan Ar cticw tGas Pipeline Comp any, · and an d 2 , 2 00 miles across northern Arcti~s G!!71P~anla~a wo~l~ be owned and operated by Canadian ipe ine Limited. G~s ~ill t r ansmission be delivered at by other pipelines four to · · ~!n~f~!i ~!~!:s~or 3. • oelta gas for the British Columbia market would be delivered to westcoast Transmission at a point near the junction of the borders of Alberta,~c. and the Northwest Territories. Delta gas for markets in Saskatchewan, Manitoba Ontario and Quebec would be delivered to TransCanada PipeLine; at Empress on the Alberta-Saskatchewan boundary. North Slope gas for U.S. midwest and eastern markets would be delivered on the Saskatchewan-Montana border. North Slope gas for markets in California and the U.S. Pacific northwest would be delivered across the southeast corner of . If.final approvals were obtained in 1977, initial deliveries of Delta gas could start by mid-1982 with start of Alaskan gas deliveries in mid-1983. ' If government approvals are secured, about five years would then be required to complete the pipeline, allowing for purchase and delivery of pipe, materials and construction equipment; preparation of wharves and stockpiling sites, and actual pipe laying. A peak labor force of some 8,000 men would be involved in construction. North of the 60th parallel, construction would be limited to the winter months. It would require two winters of pipeline constr~ction prior to the delivery of the first gas from the Mackenzie Delta, and a third winter for construction of the section between the Delta and the Alaskan North Slope. e The pipeline is planned to handle an initial delive volume ?f 1.25 ~cffd of.Delta gas and two bcf/d of Alask~ gas. With.continuing discove 7y o~ t:J:1e large potential gas resources in the western arctic, it is anticipated that deliveries could reach the design volume of 4.5 bcf/d by the fifth year of pipeline operations -- or about 10 years from now. COST $7.5 B.C. More than two million tons of steel pipe on the Arctic Gas system would be buried from four to eight feet beneath the surface. The surface over the buried pipe would be revegetated. The gas would be chilled to avoid ground and ice thawing in areas of permafrost. Possible problems of pipe frost heave or settlement in areas of discontinuous permafrost would be avoided by insulation of the pipe, by selective electrical heat traces, and by underground pipe supports, where required. compressor stations would be spaced approximately every 50 miles. Initially, 20 compressor stations with a combined 800,000 horsepower would be installed to provide a delivery capacity of 3.25 billion cubic feet of gas per day. Installation of additional stations to provide a total of more than 1.5 million horsepower could increase the capacity to the design volume of 4.5 billion cubic feet per day. Beyond that, the capacity could be expanded incrementally by installing short sections of additional line (called "loops"), together with more horsepower. th BILLION TO FINANCE th The financing that would have to be raised to build ~anadi~n Arcti~ ~as pipeline is estimated at $7.5 billion, e including provision of $1.9 billion, for escalation of cot above 1976 levels. An additional $1.9 billion would be s s committed and available if needed from the sponsors d lenders t? meet any unanticipated cost over-runs. T~ u.s. and Can~dian Gover~m~nts would be asked, in return for pa nt any additional assurances that financial 1 d yme ' to provi~e may require. en ers Beyond this fi~a~cing f om ~he Delta,.additional capacity 7 ~~~=~~;:. to design req~ired to start gas deliveries capital required to expand the would be provided out of operating One-qu~rter of the required financing would be in the form of equity or ownership capital, and the remaini threequarters would be borrowed. ng whichA;~!i~a~=~iis sponsored by 11 Canadian firms (eight of owned firms incl~~;o;1ed) and 7 firms. The Canadian~tility companies which transport or distribu:gulated in Canada. e two-thirds of the natural gas used ?·~· s. Canadian sponsors ARCTICGAS AND ALCAN: WHYONEIS BETIERTHANTWO are: Alberta Natural Gas Company Canada Development Greater Winnipeg Corporation Gas The Consumers' Company Gas Company The proposed Alaska highway system follows a great arctic circle route to carry Alaskan gas across the northern half of the continent in a series of separately-owned pipelines linked together like a chain of sausages. Gaz Metropolitain Gulf Oil Canada Imperial Limited Northern and Shell Canada Central Limited TransCanada Union U. s. Limited Oil PipeLines Limited are: The Columbia Michigan Natural Gas System, Wisconsin Pipe Gas Pipeline Northern Natural Panhandle Pacific Limited Gas Limited sponsors Texas Gas Corporation Lighting Company Company of America Gas Company Eastern Eastern Inc. Line Pipe Line Transmission Corporation Company Corporation The Alcan route via Dawson and Whitehorse covers 2, 768 miles to carry only Alaskan gas -- 373 miles more than the Arctic Gas route which would carry both Alaskan and Canadian gas to the same delivery points. If it later became feasible to build the 460-mile Dempster lateral from Dawson to connect the Delta gas, the total route would be 3,228 miles, or 835 miles longer than the Arctic Gas route. This from only prospective the Alaskan additional if the full ever to be 3, 22 8-mile Alcan-Dempster route would pick up gas two points along the 1,200-mile northern belt of gas-bearing sedimentary rocks that stretches from arctic coast to Alberta. Hundreds of miles of pipeline would have to be built across the north gas resources of this sedimentary trough are brought to markets and utilized. From Prudhoe Bay the route of the Alcan pipeline extends south along the Alyeska oil line (actually crossing the oil pipeline more than 40 times) to Fairbanks: in a crooked line from there to Dawson, Yukon Territory, along the Yukon and Alaskan highway past Whitehorse, across northeastern British Columbia, and through Alberta. The section across Alaska would be owned and operated by Alcan Pipeline Company; across the Yukon by Foothills Pipe across B.C. by Westcoast Transmission Lines (Yukon) Ltd.; Company, and across Alberta by Alberta Gas Trunk Line. To deliver volumes of 2.25 billion cubic feet per day from each of the two producing areas in the Delta and the Alaskan North Slope, to the same points as the Arctic Gas pipeline, the Alcan and Dempster pipelines would require looping of the mainline south of the point of connection at Dawson, and an additional: 7. 700,000 more than $4 billion tons of one steel; million capital horsepower; investment. suppl¥ volumes the fuel used by the Alcan and At planned Dempster systems a~tr 7butable to the movement of just Delta BTU more each year than used by the gas would be 30 trillion single Arctic Gas pipeline -- enough extra fuel to heat 200,000 Canadian homes. . The additional tran~p~rtation cost for Delta gas by this longer and less efficient route is estimated at a minimum 40 cents per thousand cubic feet. At the planned supply volumes, the additional cost to transport this volume of Canadian gas would amount to $900,000 every day; more more than $6 billion during a than $300 million per year; 20-year period. At minimum start-up transportation volumes of 0.8 billion cubic feet per day from the Delta and 2.0 bcf/d from the North Slope, the added cost to transport Delta gas by the Alcan-Dempster system is estimated at more than $100 million per year. No application has been made pipeline, and there is no assurance feasible or financeable. to build a Dempster that it would ever be Mr. Justi c e Berger did not find t~at pip~ l ine ~onstrucas proposed by Arctic Gas is.environion and O eration t p table He found that construction work on the 1 m7ntr~ Y ~=~~e~ot be.limited to the winter months , that it P:P~ti~!ad to a second gas pipeline , to an oil pipeline, and ~~gperrnanent roads , and th~t the cumulative.effect of these and would have an int o lerable impact on ti:ie environment wildlife resources of the coastal p l ains . This coastal section of the Arctic Gas route includes 195 miles in Alaska and 177 miles in the northern Yukon. of the Following two years of public hearings, the ~taff us Federal Power Commission ; Judge Nahum Litt, the FPC p~e~iding hearing Judge, and the commissioners of the FPC, all found the Arctic Gas route to be environmentally acceptable, with appropriate controls. Arctic Gas has testified that it will not build this perm~n 7nt section in the summer months, will not construct gravel roads here, and would accept a governm 7n~ condition which would completely prohibit this . In addition: -- there is a low probability of a second gas roads.being pipeline, an oil pipeline and perm~nent sought along this route and that they could, in any event, be precluded if found environmentally unacceptable; - - the alternative to connecting the Alaskan and Delta gas for transportation by a single pipeline, as proposed by Arctic Gas, will be the constr~ction of two separate gas pipelines across the north, with greater combined environmental impacts as well as large conservation penalties. ENERGY AND ENVIRONMENT : THE HOLISTIC APPROACH In his report to the Minister Northern Development, Mr. Justice recommended that no pipeline should 372-mile route proposed by Arctic North slope gas across the coastal northern Yukon to connect with the Mackenzie Delta. 8. of Indian Affairs and Thomas Berger has be approved along the Gas to transport Alaskan plains of Alaska and gas reserves in the These authorities factors have to conclude led environmental that the Arctic and ecological Gas route is preferable. " ... as an ecologist, I favor the coastal land route from Prudhoe Bay and not the unstudied Alcan pipeline route for the reasons that gas will be brought south from the Delta and more gas will be found offshore in the Beaufort Sea westward," Dr. L. C. Bliss, Department of Botany, University of Alberta, told a University of Toronto seminar on May 12, 1977 . "Th e holistic approach of a single northern gathering system bringing gas f rom the known and highly probable new fields in one pipeline is the most sound ecologically, environmentally, economically and probably socially. A holistic approach to current and potential future pipeline plans is needed now." 9. Dr. Bliss noted that "no other major project in North America has spent so much money to reduce the environmental impact of its proposal." He said that "sections of the route have been modified, location of compressor stations moved and most significantly, the timing of construction in relatio~ to use of snow roads, migrating caribou and waterfowl, and calving beluga whale, were set as a result of these studies." " ••• the combination of two pipeline corridors across the tundra and coniferous forest zones in the place of one route does not make sense environmentally," Dr. A.W.F . Banfield of Brock University, St. Catharines, former Director of the Natural Resources Museum, testified to the FPC. "The combined environmental impact on the natural resources of northwest North America would be approximately double." An independent panel of ecologists and environmentalists also told the Alaska Highway Pipeline Inquiry at Whitehorse on May 17 that the coastal route proposed by Arctic Gas is preferable to the Alcan pipeline route with a connecting lateral to the Delta by way of the Dempster highway . THE NEEDFORENERGY Canada needs new supp l ies to -- offset declining supplies of our principal source of energy, oil and natural gas from the western provinces . western Canada oil production has amounted to about half of Canada's total energy needs; natural gas supplies onequarter . New reserves of oil in the western provinces and natural gas are as fast as they are 1971 its billion bbls. 59.9 trillion cu . ft. 8.2 billion bbls. 59.2 trillion cu . ft. 10.4 1976 Source : Canadian Petroleum Association Oil production has declined by nearly 1973 peak, and will drop nearly another Forecast: Western Canada Oil 1973 1976 1985 1,963,000 1,434,000 1,000,000 National not being found being produced: Remaining of Reserves Gas Natural in Western Canada Proved Remaining Reserves of Oil and Gas Liquids in Western Canada The "Arctic Gas project which efficiently connects the Prudhoe Bay field to the Mackenzie Delta field, over the shortest route, becomes not only the least costly project, but the environmentally superior project," according to the final argument of the FPC staff on April 8, 1977. 10. of energy meet demand growth ; Energy 25 percent 25 percent from by 1985 . Production barrels barrels barrels Board, per per per day day day 1977. 11. In 1973, oil production excee~ed demand for net.expor of 300,000 b/d . In 1977, demand wil~ exceed P:Od~ction, net oil imports of 300,000 b/d, costing $1.8 billion . follow Natural gas a similar production pattern, By 1985, total from western Canada 1973 peak from we~tern Canada and peak in the early production is expected is e~pected 1980 s. of both oil and natural to be 25 percent below to energy gas the rate: Combined western Canada Oil 3,100,000 barrels oil equivalent per day 2,600,000 barrels oil equivalent per day 1985 2,300,000 barrels oil equivalent per day 1990 1,900,000 barrels oil equivalent per day Assuming domestic demand increases 3.5 percent annually vs. 5.5 percent historically, supplies of oil and gas will fall short of matching 1985 domestic demand by an amount equivalent to one million barrels per day of oil. (millions Demand and Supply Natural Gas of barrels per of Oil day of oil studies on the concur that: __ world supplies ~vailable oil will probably exceed next 10 to 20 years, possibly sooner; demand within for the outlook for world 7 1976 Domestic Recent authoritative supply and demand __ well before this happens, tigh enin~ de~and ~ressures will likely cause further shar~ rises 1~ 011 prices, interruptions; together with risks of supply & Gas Production 1973 and equivalent) Surplus (Deficit) Domestic Demand Western Canada sueel:t 2.3 2.4 3.1 2.6 1985 3.3 2. 3 (1.0) 1990 4 .4 1.9 (2. 5) 1973 1976 ANOTHER ENERGY CRUNCH COMING? 7 s with 0.8 0.2 With an anticipated oil import price of at least $20 per barrel (compared with $14 per barrel now) the cost to import one million b/d of oil in 1985 would exceed $7.5 billion per year. -- greater energy conservation new energy supplies to develop crucial urgency. , and are increased efforts both matters of The findings are confirmed in reports within the past year from a 15-nation energy study co-ordinated by the Massachusetts Institute of Technology, by Canada's Department of Energy , the Japan Petroleum Association, t~e International Carter by Energy Agency, the recent report to U.S. President Energy the Central Intelligence Agency, the U.S. Federal Administration, the Organization for Economic Co-operation and Development, the council on Foreign Relations, the Walter Levy firm of petroleum economic consultants, and others. In light of these findings, Canada's increasing reliance on imported oil is a matter of growing concern. This year, net imports from OPEC nations will account for nearly 20 percent of Canadian petroluem consumption. But by 1985, this will increase to more than 50 percent. Arctic Gas believes gain access to the natural by the earliest possible that this creates gas reserves in date. an added urgency to the Mackenzie Delta The 15-nation world energy study sponsored by MIT concluded in May that demand for oil in the non-Communist world will probably exceed available supplies starting sometime between 1985 and 1995, and that shortages could occur as early a~ 1981. Prof. Carroll Willson of MIT, director of the study, c ncl~ded that the industrialized world"must drastically curt~11 gro~th in the use of energy and move massively out of 011 and into other fuels with wartime urgency." 13. 12. THE DELTA GAS SUPPLY The CIA report to President Carter in April found that "After 1980 demand for OPEC oil will rise rapidly ••• The demand ability and willingness of OPEC countries to meet this is far from certain •.. The rising pressure of oil demand on capacity in the early 1980's is bound to cause oil prices to rise well in advance of any actual shortage." The largest potential supply lies in the area of connected with the proposed estimates by the Geological Prof. Dankwart A.Rustow of City University, New York, in the April issue of Foreign Affairs, concluded: "In the next five to ten years, the industrial world's demand for oil from the Organization of Petroleum Exporting Countries is likely to catch up with the amounts that OPEC countries will be able or willing to make available for export ... there is serious danger of physical shortages of oil throughout the non-communist world, of a second price jump comparable in amount to that of 1973-74." Prof. Donald Mackay, Associate Director, Institute for Environmental Studies, University of Toronto, writing in the "Canada's energy supply Globe and Mail May 14, stated: situation is increasingly precarious and there must be massive developments of coal, nuclear power and frontier oil and gas to satisfy the energy demands of the 1980's and 1990's Energy growing gap supply them and political concern." Arctic gas offers of Canada's Minister Alastair Gillespie, in 1976: "The between our energy demands and our ability to from domestic reserves ... carries with it economic risks which the Government of Canada views with The Arctic discovered and Delta-Beaufort in and adjacent major utilization increase the Natural gas supplies one-qu rter of only five percent. needs, and in Quebec, prior to recent supply curtailments, gas total energy demand. Yet two-thirds in Canada supplies to a report by the Aprll. Canada's In the supplied of natural security total energy United States, one-third of in Canada's Canada that Gas pipeline, of Canada. natural gas would be based on Gas pipeline would connect to markets potential gas reserves in the Mackenzie Sea basin , and the Territories mainland to the Mackenzie Valley. The GSC estimates potential new qas reserves exploration regions of Canada as follows. 90% Probability 50% Probability 45 tcf 70 tcf 30 tcf 38 tcf 24 tcf 53 tcf 27 tcf 62 tcf for the area, the ." Delta-Beaufort Mackenzie Western Arctic Gas believes that increased one effective means to help energy supplies. increase northern Arctic Survey Canada Islands Atlantic offshore Source: Energy, & Valley & Labrador Oil and Natural Gas Mines and Resources, Resources Ottawa. of Canada 1976: of potential new hydrocarbon energy are in the form of natural gas, according Geologic 1 S rvey of Canada, released in • ... natural gas clearly h s ob one of our major options in reducing our d n nc on or ign 011," Energy Minister Alastair Gill sp1 told th Hous of Col!lI!Ons Standing Co tt eon atural Re ourc sand Public Works, March 8, 1977. 15. Of the potential gas reserves of 45 tcf in the Arctic Gas supply area at the 90 percent probability, the DeltaBeaufort area is credited with 39 tcf, and the Mackenzie Valley region with 6 tcf. Reserves already discovered in the Arctic Gas pipeline supply area are estimated by the GSC at 6.5 tcf i~ the Delta-Beaufort basin, and one tcf for the Mackenzie Valley, including less than 0.5 tcf near the NWT-B.C. border which is already connected by pipeline. Just the presently discovered reserves increase present gas supplies 20 percent over 20-year period; used could: in Canada displace oil imports costing $17 billio~ at prices and $25 billion at projected 1985 prices. heat 2.5 million Canadian hor.ies for by today's Gas pipeline increased for offers: the Canadian security The deficit in the current account balance of payments (trade in goods and services) has increased from an average of $0.3 billion per year during the decade ended in 1973, to an annual rate of $5.4 billion during the fourth quarter of 1976. Net foreign debt increased from $28 billion in 1970 to $48 . 5 billion at the end of 1976 , and now amounts to $2,200 per capita. Net outflow of funds for dividends and interest on foreign debt amounted to $2.56 billion in 1976. consequence of a large trade deficit are: borrowings; 2) increased foreign holdings 3) a reduction in the exchange value of or 4) a combination of these.* Foreign borrowings may increase the balance of payments deficit by increasing the interest payments on foreign debt; or may help reduce the deficit by increasing national output and productivity , depending on how the borrowed funds are used . Sale of equity abroad increases foreign ownership of Canadian industry . Reduced exchange value of the Canadian dollar worsens terms of Canada ' s trade "and thus inpinges on the real welfare of Canadians" (Beattie). an improvement in Canada's balance of payments, through a reduction in the growth of oil imports, and export revenues from the transportation of Alaskan gas; savings energy; concern about Canada ' s balance of payments reflects trends in national ~utput and productivity, the rising coat ~n for~ign debt , and the prospect of large oil of interest imports at high prices. The inevitable 1) increased foreign of Canadian equities; the Canadian dollar; 20 years. THE NATIONAL BENEFITS The Arctic BALANCEOF PAYMENTS economy in the cost of energy of The Arctic Gas pipeline offers a greater improvement in Canada's trade position than any other proposed new industrial undertaking. It would do this by reducing the growth of oil imports , and by earnings resulting from the transporting of Alaskan gas. *See_ "Impact on the Canadian Economy , • written direct testimony of J.R. Beattie, former Senior Deputy Governor 1976. Bank of Canada, to the National Energy Board , Octover, supply. 17. Net Bconollic ltellefit• value of Delta gas delivered by Arctic Gas pipeline Charges for estimated at $7.8 $300 million per and debt retire .. transporting Alaskan gas would earn revenue• billion over a 25-year period (more than year), after deduction of interest, dividends nt on all foreign financing for the pipeline. Initial deliveries equivalent to a supply per barrel, would coat of 1.25 bcf/d of Delta gaa are of 220,000 b/d of oil which, at $20 $1.6 billion per year to import. Projected deliveries of 2.25 bcf/d of Delta gas by the fifth year of pipeline operation is equivalent to a supply of 400,000 b/d of oil which at $20 per barrel, would cost $2.8 billion per year to import. charges for transporting Alaskan gas Less (1976 costs+ Pipeline const. & operation & Interest dividends on foreign investment Exploration, Production $ 6 . 18 billion 6 .24 billion 8.49 billion $20.91 Government revenues and investor profits are part of the price which is paid abroad for purchases of imported oil, and part of the price which stays in Canada for purchases of dc>-stic energy. Thus the cost of dc>.. stic energy le•• government revenues and earnings of Canadian-owned investment, compared with the a net economic benefit price of imported energy, represents to C&nada. An additional economic benefit of the Arctic Ga• pipeline is the export revenues from transporting Alaskan gas. "-a•ured on this basis, the Arctic Gas pipeline would generate an estimated $47 billion in economic benefits for Canada during a 25-year period, assuming: of $20 per barrel U.03 rrr:JT escalation) BCONOMIC BENEFITS a price '53. 91 billion for imported oili pipelin deliv r1es of 2.25 bcf/d each from the Delta and North Slope, by the fifth year of oipeline operation. billion NET ECONOMICBENEFIT 20.91 $47.03 source: Revised Benefit-cost Analysis, Canadian filed with National Energy Board, March 1977. are avail The net economic benefits government revenues, earnings on Canadian savings to consumers as compared with the oil. How the benefits will be divided is of government policy and regulations. billion Arctic Gas, ble in the form of investments, and price of imported pri.Ju.rily a function Government revenues in the form of production royalties and taxes will account for a major portion of the net economic benefits. Income, property and other taxes on the pipeline alone are estimated at more than $500 million per year by the sillth year of pipeline operations. Of this, charges for the transportation of Alaskan gas would generate more than $300 million per year in canadian taxes. 19, THE NORTHERN BENEFITS time Regional benefits which would result from the Arctic pipeline are at least as important to the people of the Northwest Territories as the national benefits are to the rest of Canada. For the N.W.T., the pipeline would: increase promote of regional employment; economic self-reliance self-government; offer a means for native to provide economic rewards provide communities Thirty of Canada's Territories. a source of low-cost near the pipeline. thousand people live largest river -- the than and development land claims settlements and opportunities; half are native fuel for northern where the populations peoples -- Indian, Inuit range and Metis. It is one of the fastest growing populations In the early 1960's, the birthrate was five-times average. It is still more than double. Half the people who live here are under in the world. the national 16 years of age. In 1950, less than 15% of the young people in the north By 1970, more than 95% had received any formal schooling. of school-aged children were in school. are Today, more than school students. 40 percent of the people Now, and in the years ahead, these students finishing school with the idealism, the confident and the high aspirations of all youth. who live that has changed since the Traditional hunting, trapping and fishing pursuits remain important. But there are already too many people to be sustained by this alone. Nor can traditional pursuits entirely satisfy present aspirations. There is a demand for the same level of prosperity, goods, services and opportunity that the people of southern Canada take for granted. But opportunities are limited. Unemployment rates are high. In many native communities, more than a quarter of the adult population is out of work and actively seeking jobs. Federal government expenditures -- amounting to more than $8,000 per year for every northerner -- is the main economic prop. welfare expenditures are nine times the national average. Northerners want to make their own choices -- whether it's living off the land, working for wages, combining both of these, or setting up their own businesses. in the valley and delta area Mackenzie River in Northwest They live in 23 communities, from 10,000 to less than SO. ~re Gas They face a northern world their parents were youths. here will be expectations, help Developing the natural gas resources provide the opportunities. More than BOO northerners -worked on oil and gas exploration full-time or seasonally, in 1976. of this region can mostly native peoples -jobs in the arctic, either Many combine seasonal exploration jobs with hunting and trapping. The wages helped allow greater use of snowmobiles, aircraft, outboard motors, portable camping equipment and modern hunting and trapping equipment. As a result, the harvesting of wildlife resources in several arctic communities has increased significantly. A pipeline to transport resources of the Mackenzie these opportunities. the discovered Valley and Delta and potential gas area could expand An estimated 2,200 people would be employed full-time in the long~term jobs required to operate the pipeline and gas processing plants and in the continuing exploration and dev~lopment activities. That's a quarter of the total number of Jobs that now exist in the region. Seasonal work would provide an additional 1,200 jobs. And this primary employment would create still further jobs in the northern economy. 21.