Trudeau stubs toe on Alaska pipeline deal
Ottawa — Charges of ''sellout to the US'' are once again being heard in Canada as the Liberal Party government is battered by the political fallout from the postponement of a huge, joint Canada-US energy project.
Prime Minister Pierre Trudeau will be forced to come up with new economic strategies in hopes of containing the political and potentially far-reaching economic damage from this and other energy setbacks. These have greatly embarrassed the Liberals, who have already watched Mr. Trudeau's popularity sink drastically in opinion surveys in recent months due to economic problems.
The outcries erupted April 30, when a US business consortium announced a two-year delay in planning for the proposed $37 billion Alaska Highway natural gas pipeline.
The project, intended to carry natural gas 4,800 miles from Alaska through Canada to the US, has been the subject of heated controversy here for a decade.
As in many business sectors, foreign multinationals dominate the Canadian energy scene, and in recent years Canada has acquired a prickly sensitivity about how much of its energy resources are exported south of the border.
But, two years ago, when plans for the Alaska pipeline had reached a crucial, make-or-break stage, Prime Minister Trudeau found himself caught between these nationalistic energy sentiments and the desire to encourage big construction projects that would give Canada's flagging economy a welcome boost.
The complex choice facing the Trudeau government was this: Although the project was meant eventually to ship US gas, the industry wanted first to construct the southern portion of the pipeline, which could carry only gas from Alberta Province to markets in the US West Coast and Midwest. This meant putting off temporarily the construction of the rest of the line to Alaska, which, in addition to transporting gas from the North Slope to American consumers, would also allow Canada to tap its own Arctic gas resources.
After receiving written assurances from President Carter that Washington would take action to see the entire line finished, the Trudeau government in July 1980 allowed the southern portion to be built.
Now that portion of the line is almost completed. But the project's sponsors, Northwest Energy Company of Salt Lake City, cannot raise the funds to build the rest of the system. Mr. Trudeau's critics are crying ''I told you so'' and berating the Liberal Party government for selling out Canada's energy resources to the US.
''We are left with one-quarter of the job completed,'' complained Ian Waddell , a member of Parliament who is spokesman on energy matters for the left-leaning New Democratic Party.
Reacting to postponement of the pipeline, Waddell asked, ''Does (Energy Minister Marc Lalonde) still have the naivete or the gall to stand up in the House of Commons and say this project can still be financed in the immediate future?''
It is, moreover, not the only damaging misstep to befall the current government over energy matters, which should be the strongest suit of any Canadian government. In a devastating blow to the country's economic outlook, a consortium of oil firms announced--also on April 30--that it was abandoning a four-year-old plan to construct the $11.2 billion Alsands plant to extract synthetic crude from oilsands deposits in northern Alberta. Like the Alaska pipeline, this project would have pumped billions of dollars in industrial spinoffs into the Canadian economy while providing thousands of jobs at a time of record-high unemployment. The Alsands project was a casualty of the Trudeau government's troubled dealings with the oil industry.
With the Alsands and Alaska pipeline setbacks, Mr. Trudeau's much-touted plan to use multibillion-dollar energy-based projects to revitalize the economy now lies in tatters.
The Liberals' political enemies are having a field day.''The investment climate is no longer looked upon as stable by the major oil companies,'' conservative Parliament member Jack Shields said, ''and they will not invest in these kinds of projects as long as this Liberal government remains in power.''