Protracted talks to get a $7-billion Canadian Arctic natural gas pipeline project back on track need to be resolved soon or it will be surpassed by a much-larger plan to access Alaskan gas, the chief executive of Imperial Oil said Thursday.

Tim Hearn said Imperial (TSX:IMO) and its partners are keen to see the pipeline move forward with regulatory hearings, but they still need some resolution on key issues like the cost to access native lands.

"We all agree that if we can get this thing constructed, that it's in the net best interests of all concerned," Hearn said after speaking to a group of Calgary business elite Thursday.

"But we need to get them going pretty soon because time is not on our side," he said, while refusing to speculate if hearings could be restarted before year's end.

"If this thing drags out and drags out, I believe Alaska will get built and we might as well take a back seat for a long period of time. It's not in our best interests."

For years, oil companies and politicians have been pushing for the development of two major new natural gas pipelines - one accessing reserves from the Mackenzie Delta in the Northwest Territories and one reaching even larger reserves on Alaska's North Slope.

And while not technically in competition with one another, it is well understood that if the much-longer, much more expensive Alaska pipeline was built first, it would make the Mackenzie gas project less economic and likely strand the resource in the ground for several more years.

Gas reserves in northern Canada were first discovered more than 20 years ago, but there is currently no way to bring them to market.

Imperial, which is the lead on the Mackenzie project, along with partners Shell Canada (TSX:SHC), ConocoPhillips (NYSE:COP), Exxon Mobil Corp. (NYSE:XOM) and the native-owned Aboriginal Pipeline Group, were initially hoping to have the pipeline up and running by the end of the decade.

But last April, the energy companies said they were shutting down most of the work on the line, saying they were being asked to pay "hundreds of millions of dollars for social programs and land access rights that the various governments should be covering.

Hearn said Thursday that the oil companies are still trying to find "a fiscal framework" that will make the pipeline economically viable.

"We're not asking for handouts, we're not asking for give-aways, that is not what we're working on."

"Because today, under current conditions, we don't have an economic project and we're working to make sure we can find one."

Hearn said projects like the Mackenzie pipeline need a way to ensure cost-recovery for the companies who are putting up the vast investment dollars before seeing "one ounce of revenue or gas flowing."

James Stevenson