At the height of the Alaska Gasline Inducement Act, (AGIA) application process in 2008 Alaska governor Palin became concerned about obstacles for the Alaska Gas Pipeline project in Canada and hired a Canadian law firm for advice. Not adequately meeting the demands of 40 or more First Nations in the Canadian, mostly Yukon right of way portion could be ”fatal to the project” was the answer that she received; her own lawyers advised her that the TransCanada Pipelines timeline is unrealistic (all according to the Anchorage Daily News). All of a sudden in June 2009 its clear sailing; how come?
In December 2008 TransCanada Pipelines did receive the one and only AGIA licence over several competitors. ExxonMobil was not among them but entered the picture in 2009.
Prior to ExxonMobile and TransCanada Pipelines Ltd. forming the TransCanada Alaska Co. on June 12, on June 10, 2009 Sarah Palin had concluded talks with ExxonMobil in Dallas, according to the Houston Chronicle.
The reasons for and structure of this corporate partnership remain in the dark. The only financial contribution of Exxon that both partners admit to is something in the range between pocket change and zero, it could be an undisclosed portion of $ 150 million (major media reported that Exxon contributes 150 million; there are no corporate or government statements which support any figure that describes Exxon's portion) which would be nominally a contribution of both 'partners' towards initial costs of an Open Season process (major planning and deal making phase between gas producers on the North slope and the pipeline owner which starts 2010, proposed construction 2013 - 2018). According to information Alaska State House Representative Mike Hawker has access to ExxonMobil will in reality not be a pipeline project partner but just a subcontractor down the road with a financial up front expense for some work on the gas treatment plant which will be charged back to TransCanada. TransCanada does not need Exxon to finance the pipeline. The loan guarantee of the Alaska government for TC Pipelines stands now at 30 billion dollars not 26 as the CBC had reported. In the business relationship beyond construction the gas producer Exxon will be like other gas producers a future customer to TransCanada which remains for the time being the sole AGIA licence holder (Exxon like ConocoPhilipps and BP could propose to build themselves but TransCanada has the foot in the door with the crucial Canadian right of way). So the partnership doesn't have enough business substance to warrant changes or updating duties under AGIA which provides a 50 % refund out of Alaska state coffers for the Open Season costs. It is partly because of this public money that AGIA involves accountability requirements towards the Alaskan people. The Alaskan government has seen the details of the deal and obviously sees no Exxon involvement at this point that concerns Alaskans. Is Exxon's involvement directed at Canada and shouldn't we keep an eye on it as do the Alaskans?
In December 2008 TransCanada Pipelines did receive the one and only AGIA licence over several competitors. ExxonMobil was not among them but entered the picture in 2009.
Prior to ExxonMobile and TransCanada Pipelines Ltd. forming the TransCanada Alaska Co. on June 12, on June 10, 2009 Sarah Palin had concluded talks with ExxonMobil in Dallas, according to the Houston Chronicle.
The reasons for and structure of this corporate partnership remain in the dark. The only financial contribution of Exxon that both partners admit to is something in the range between pocket change and zero, it could be an undisclosed portion of $ 150 million (major media reported that Exxon contributes 150 million; there are no corporate or government statements which support any figure that describes Exxon's portion) which would be nominally a contribution of both 'partners' towards initial costs of an Open Season process (major planning and deal making phase between gas producers on the North slope and the pipeline owner which starts 2010, proposed construction 2013 - 2018). According to information Alaska State House Representative Mike Hawker has access to ExxonMobil will in reality not be a pipeline project partner but just a subcontractor down the road with a financial up front expense for some work on the gas treatment plant which will be charged back to TransCanada. TransCanada does not need Exxon to finance the pipeline. The loan guarantee of the Alaska government for TC Pipelines stands now at 30 billion dollars not 26 as the CBC had reported. In the business relationship beyond construction the gas producer Exxon will be like other gas producers a future customer to TransCanada which remains for the time being the sole AGIA licence holder (Exxon like ConocoPhilipps and BP could propose to build themselves but TransCanada has the foot in the door with the crucial Canadian right of way). So the partnership doesn't have enough business substance to warrant changes or updating duties under AGIA which provides a 50 % refund out of Alaska state coffers for the Open Season costs. It is partly because of this public money that AGIA involves accountability requirements towards the Alaskan people. The Alaskan government has seen the details of the deal and obviously sees no Exxon involvement at this point that concerns Alaskans. Is Exxon's involvement directed at Canada and shouldn't we keep an eye on it as do the Alaskans?
The 'partnership' talk is unusual and it makes no sense, the producer always wants the line use to be cheap and the pipe owner wants big pipeline fees. Its natural for each to play their cards close to the chest and to compete for a bigger piece of the total profit.
For example the ConocoPhillips partnership with BP, known as Denali, doesn't need phony PR. They are both international as well as Northslope gas producers (as is ExxonMobil), who jointly can reduce competition and have more price control as well as leverage for negotiating tax breaks with the Alaska government. Exxon has a reputation for being extremely adversarial in negotiations. OK, they may or may not share gas treatment plant or other expertise with TransCanada but what are they partnering in? In the AGIA progress press conference from June 11, where the partnership was announced, journalists pried for almost one hour after business deal details but couldn’t get one sentence with contextual cohesion out of the two strange bed fellows whose pillow talk might concern something quite different.
One anecdote we know from Exxon is that together with Murphy Oil Inc. in 2007 they launched a challenge under NAFTA chapter 11 investment to overrule NewFoundland and Labrador legislation. Exxon does not recognize a provincial law which requires oil and gas businesses to make a financial contribution to education and research in the province. A wave of similar corporate NAFTA chapter 11 challenges including against environmental legislation, which attempt across the country to overrule provincial legislation by the use of off shore arbitration panels, is a recent development. The Yukon land claims legislation recognizes the original Foothills Pipelines (still part of TransCanada Pipelines) right of way in the Yukon but does not limit rewards, also the White River and Kaska First Nations don’t have agreements.
The Yukon First Nations deserve assurance that their rights have not been undermined by negotiations of the Fentie government with the Alaska government and that land claims will not be overruled by a NAFTA chapter 11 challenge or the threat thereof. The possibility of this scenario has been predicted by Tony Pennikett in his book “Reconciliation”. So concerned was he about his findings that he wrote a letter to then Prime Minister Jean Chretien about this concern; the letter is quoted in the book. Pennikett is a former NDP Yukon Premier who is now a leading land claims consultant for indigenous peoples worldwide.
This is potentially the meaning of the TransCanada Exxon partnership. The business alignment of TransCanada and Exxon is phony at this point but a formal partnership has been created from which a NAFTA arbitration panel can be assembled,
A chapter 11 challenge can only be launched across a border, TransCanada Pipelines needs a powerful American partner like ExxonMobil to be the hired hitman.
There are people who can find out which is not easy as nothing is published on the early stages of a NAFTA arbitration case. What about the trade lawyer Stephen Shrybman? He was most effective in his investigation of the so called Trade Investment Labour Mobility agreement, which led several provincial governments to reject it. TILMA had been designed as inter provincial implementation of NAFTA chapter 11 with strong anti-democratic aspects.
Treasonous and illegal arrangements to attack the land claims legislation would be an insult to all Yukoners. On the other hand broken treaties are not exactly a historic novelty. The First Nations Agreements are already threatened. Where for example does Fentie's arrogance come from when he constantly provokes court action in simply pushing government's obligations from the agreements into the courts? The rest of Canada is certainly watching.
The Yukon First Nations agreements represent the continuation of a 400 hundred year old conversation with serious ups and downs between immigrants and aboriginal people. If the agreements are cut, Canadian democracy, the oldest unbroken constitutional tradition on the planet, which is further unique in its oral characteristic of a continuous adaptation process, will give up territory to creeping totalitarian trends. If the agreements hold out against chapter 11 it may be because chapter 11 can actually be cancelled in six months notice with much less trouble than keeping it. I think the well being of the land claims matters a lot also to the White River and Kaska First Nations. The Canadian Common Law tradition has created a precedence that gives them a position that is stronger than that of the other Yukon First Nations before their Final Agreements.
Everybody should be interested in clarification, the YG, the legislature, the First Nations, all the other citizens, even the Yes men and Yes women from the CBC who live in Harper’s LaLa free trade land and who shout “protectionism, protectionism” these days more often than they used to. They do this if somebody wants to investigate the possibly unlawful doing based on a specifically problematic NAFTA provision (That is what they did when Obama mentioned human rights and ecological problems in NAFTA).
If there is no problem, fine. But if there is and we don’t look it will hurt a lot.
There is more. Not only may lawful government be in danger, Yukon businesses and trades people who want pipeline construction and maintenance contracts can loose their shirt if the project planning is bungled. It may get get bogged down under Shakespeare like plots and under political pressure of US energy security expectations to rush the planning.
The 1985 completed Norman Wells oil pipeline can teach a lesson, it has problems with unstable permafrost situations.
TransCanada’s AGIA application in its public part with two or three sentences refers to their standard expertise in this regard.
Major climate research bodies predict an unprecedented, ongoing reduction of permafrost over the projected construction and operating period reaching well into the second half of the century. The permafrost aspect has always been a sensitive detail, both for above and underground pipeline design. And here we have massive changes coming and they are not being addressed. The potential is there for emergencies, for economic failure, which are further aggravated by the dangers of sour gas content.
The Yukon First Nations deserve assurance that their rights have not been undermined by negotiations of the Fentie government with the Alaska government and that land claims will not be overruled by a NAFTA chapter 11 challenge or the threat thereof. The possibility of this scenario has been predicted by Tony Pennikett in his book “Reconciliation”. So concerned was he about his findings that he wrote a letter to then Prime Minister Jean Chretien about this concern; the letter is quoted in the book. Pennikett is a former NDP Yukon Premier who is now a leading land claims consultant for indigenous peoples worldwide.
This is potentially the meaning of the TransCanada Exxon partnership. The business alignment of TransCanada and Exxon is phony at this point but a formal partnership has been created from which a NAFTA arbitration panel can be assembled,
A chapter 11 challenge can only be launched across a border, TransCanada Pipelines needs a powerful American partner like ExxonMobil to be the hired hitman.
There are people who can find out which is not easy as nothing is published on the early stages of a NAFTA arbitration case. What about the trade lawyer Stephen Shrybman? He was most effective in his investigation of the so called Trade Investment Labour Mobility agreement, which led several provincial governments to reject it. TILMA had been designed as inter provincial implementation of NAFTA chapter 11 with strong anti-democratic aspects.
Treasonous and illegal arrangements to attack the land claims legislation would be an insult to all Yukoners. On the other hand broken treaties are not exactly a historic novelty. The First Nations Agreements are already threatened. Where for example does Fentie's arrogance come from when he constantly provokes court action in simply pushing government's obligations from the agreements into the courts? The rest of Canada is certainly watching.
The Yukon First Nations agreements represent the continuation of a 400 hundred year old conversation with serious ups and downs between immigrants and aboriginal people. If the agreements are cut, Canadian democracy, the oldest unbroken constitutional tradition on the planet, which is further unique in its oral characteristic of a continuous adaptation process, will give up territory to creeping totalitarian trends. If the agreements hold out against chapter 11 it may be because chapter 11 can actually be cancelled in six months notice with much less trouble than keeping it. I think the well being of the land claims matters a lot also to the White River and Kaska First Nations. The Canadian Common Law tradition has created a precedence that gives them a position that is stronger than that of the other Yukon First Nations before their Final Agreements.
Everybody should be interested in clarification, the YG, the legislature, the First Nations, all the other citizens, even the Yes men and Yes women from the CBC who live in Harper’s LaLa free trade land and who shout “protectionism, protectionism” these days more often than they used to. They do this if somebody wants to investigate the possibly unlawful doing based on a specifically problematic NAFTA provision (That is what they did when Obama mentioned human rights and ecological problems in NAFTA).
If there is no problem, fine. But if there is and we don’t look it will hurt a lot.
There is more. Not only may lawful government be in danger, Yukon businesses and trades people who want pipeline construction and maintenance contracts can loose their shirt if the project planning is bungled. It may get get bogged down under Shakespeare like plots and under political pressure of US energy security expectations to rush the planning.
The 1985 completed Norman Wells oil pipeline can teach a lesson, it has problems with unstable permafrost situations.
TransCanada’s AGIA application in its public part with two or three sentences refers to their standard expertise in this regard.
Major climate research bodies predict an unprecedented, ongoing reduction of permafrost over the projected construction and operating period reaching well into the second half of the century. The permafrost aspect has always been a sensitive detail, both for above and underground pipeline design. And here we have massive changes coming and they are not being addressed. The potential is there for emergencies, for economic failure, which are further aggravated by the dangers of sour gas content.
This too needs clarification, not just by experienced but by independent experts. They can be found, but so far that has not happened.
A typically complicated case i see!
ReplyDeleteWell there is a company Parallelinfrastructure which basically deals with such pipeline agreement issues in different sectors.Pipelines Right of way offer you greater control during construction and operation.Plus You also have greater certainty that the line will go undisturbed while it’s in operation, and most importantly, these pipeline routes often put you closer to your markets. Thank you!