Hearings for the Mackenzie pipeline had been expected to being in late summer, but Imperial asked regulators to put the process on hold as it tried to solve the thorny issue.

Regulators need 60 days from receiving notice to start hearings, so it is looking increasingly likely that they will not start until 2006.

"We need to make sure there is some tangible progress in November," Northwest Territories Energy Minister Brendan Bell said in an interview in New York.

The $5.6 billion (C$7 billion) Mackenzie line would carry up to 1.9 billion cubic feet per day from the Beaufort Sea to Alberta and on to the United States, where annual gas production is falling.

The energy industry is focusing on the pipeline, and a competing larger Alaska Highway pipeline, to bring new supplies to the United States amid record prices and strong demand. Oil companies hope to complete the Mackenzie line early in the next decade.

"This window is closing, November is fast approaching. You can only hold out for so long before you realize you could jeopardize the deal," said Bell.

After hurricanes Katrina and Rita slammed gas production in the Gulf of Mexico this autumn, focus on the project, and the Alaska Highway pipeline, should increase, he said.

"In the post-Katrina new energy reality, I think there is going to be a full court press, as it should be, that gas needs to get to market," said Bell.

He said Imperial, which is majority owned by Exxon Mobil Corp., and its partners will probably step up their efforts to come to an agreement with aboriginal leaders on access and benefit agreements. "The impetus will probably come from Texas," said Bell.

Labor shortages brought about by increasing employment rolls at Alberta's oil sands, as well as rising steel prices also mean time is growing short for the Mackenzie line. "The oil sands are taking every available tradesperson in western Canada," he said.

Bell is hopeful that Imperial will agree to hearings, but said the Northwest Territories and Ottawa may have to offer to broker the talks if there is no agreement.

"If that doesn't look like that's going to happen," he said of hearings, "then we need to talk about some mechanism to resolve the dispute," he said. "It's the final push up the hill here, and I guess we will see what we're made of as governments and see if we can find a way to help broker a solution."

US electricity demand will rise 50 percent from 2003 to 2025, according to the US Energy Department. And gas prices, which averaged about $2 per mmBtu throughout the 1990s, are on track to average a record $7 per mmBtu this year, a third consecutive record price year.