JULIE GREEN (CBC RADIO): Record prices for oil and natural gas are fueling runaway profits, but it won’t last. Analysts predict that by the time gas begin to flow from the proposed Mackenzie Valley pipeline it will be selling for less than half of what it is now. Roland George is with Pervin and Gertz (?).

ROLAND GEORGE: We can’t take the indication of record profits now as an indication of what’s going to be happening in 2011 or 12.

GREEN: George says Imperial will also be looking at costs for its $7 billion project, which are at record levels as well. Stephen Hazel (?) of the Sierra Club of Canada is skeptical about claims that that means the project is uneconomic. He believes it has to do with ringing financial concessions from the federal government on taxation and royalties in ongoing negotiations.

STEPHEN HAZEL (SIERRA CLUB): I’d say it’s a last ditch desperate negotiating tactic I think.

GREEN: John McKellegate (?), a Calgary-based pipeline consultant says what Imperial ultimately has to do is weigh the risks.

JOHN MCKELLEGATE (CALGARY CONSULTANT): …(inaudible)…the Mackenzie Valley project is uneconomic I believe that what they’re saying is not necessarily that it’s going to lose money for them, but it may not produce as much income as some of the other projects that they’re presently looking at.

GREEN: Imperial has declined to explain the economics of their project, saying only that it has to compete with other investment opportunities. Julie Green, CBC News, Yellowknife.

Julie Green - CBC Radio