Time for the GNWT to step on the gas (and oil)
“In a cruel twist … communities such as Inuvik and Norman Wells, NWT, surrounded by vast hydrocarbon deposits, are forced to import large and costly quantities of fuel from southern Canada to keep homes warm and businesses running.” — Financial Post, 2013
“We’re trucking LNG all the way from Delta to burn it in Inuvik.” — former premier Bob McLeod in 2018.
“Cryopeak LNG Solutions Corp, based in Richmond BC, has completed the largest ever delivery of LNG by truck in the Northwest Territories, with the shipment being delivered to a power generation facility in Inuvik.” — LNG Industry, 2020
“Oil and gas future up here is very, very bleak.” — Tuktoyaktuk Mayor Merven Gruben to CBC in 2019.
You know, there’s plenty of blame to go around for the sorrowful failure of government — the many levels found in the NWT — for all of us to be benefiting from the vast gaseous bounty found beneath the soil and seas of the North.
But when I came across a recent story trumpeting a milestone liquefied natural gas (LNG) delivery by a massive Super B-Train semi-trailer truck from Delta, BC to the Mackenzie Delta, I just had to hang my head in shame as a resident of the NWT.
We need energy. And we could certainly use the cash and jobs that would come if we just cracked open onshore and offshore oil and gas development in the northern ranges of our huge territory.
The GNWT states the territory “has vast undeveloped oil and gas reserves.” The GNWT estimates we could hold as much as 37 per cent of Canada’s marketable light crude oil resources and 35 percent of its marketable natural gas resources.
It’s all right down there (points to ground), but that’s where it’s going to stay.
Decades of market fluctuations, environmental protests and regulatory red tape were, of course, topped off in 2016 by the Liberal government’s federal moratorium on new offshore licences. That was the final nail in the coffin.
So, now we have 82,000 litres of LNG trucked 3,729 kilometres from a port in BC along roads packed with tourists trying to enjoy the scenery — including the Dempster Highway. Not the Super B-Train truck, no matter how spectacular and capable of a vehicle it might be.
For a good perspective on the problem, read this from the Financial Post in 2018, quoting former premier Bob McLeod:
In the eyes of the Northwest Territories government and the energy industry, it’s painfully ironic that the Beaufort Sea contains an estimated 56 trillion cubic feet of natural gas and eight billion barrels of oil while remote communities such as Inuvik, Iqaluit and many more rely on LNG or diesel shipped in from southern Canada for power.
“We’re trucking LNG all the way from Delta to burn it in Inuvik,” Northwest Territories premier Bob McLeod said, calling the situation a missed opportunity.
Inuvialuit Regional Corp. chair Duane Smith has in recent months called for development in the Beaufort Sea so that Inuvik and nearby Tuktoyaktuk could generate their own gas-fired power, rather than importing it all the way from southern BC
The IRC has done a feasibility study on drilling wells in the region and Smith has said a few wells show potential.
Overall, onshore and offshore oil and gas development in Canada’s North has come to a complete standstill in recent years thanks in part to the fall in oil prices and abundant supplies in less expensive regions like Alberta and BC A federal moratorium on new offshore licences in the Arctic in 2016 has ensured that drilling activity in the region has all but ceased.
Jessica Shadian, the president and CEO of Arctic 360 and a professor at the Munk School of Global Affairs at the University of Toronto, said there is some resentment in the territories that part of Ottawa’s response to climate change has attempted to put the North “in a snow globe” so that “a bunch of people in southern Canada can feel good about it.”
In 2001, the entire NWT extracted 1,471 million cubic metres of natural gas (1,471,000 litres). That amount slowly and steadily fizzled to 72 million cubic metres in 2019 (72,000 litres). If my math is sound, we produced less last year than fit in that mega-truck from BC.
Thank you everyone. Especially Prime Minister Justin Trudeau. Job well done. And why is it again that we keep electing a Liberal MP in the NWT?
Last year, before voters in the NWT returned Liberal MP Michael McLeod to Ottawa, the feds returned $430 million in security deposits to oil and gas companies, including Imperial Oil Ltd, Exxon Mobil, Chevron Canada and BP Canada. Those companies had planned on spending billions exploring the offshore in Canada’s Beaufort Sea, the CBC reported. But Trudeau et al decided to side with their green supporters and large-city limousine liberals and freeze all offshore exploration in the Canadian Arctic, adding insult to the injury of the 2016 moratorium on new offshore licences.
From the Financial Post:
The state of inactivity in Canada’s Arctic is an outlier as the United States tries to encourage companies to resume exploring offshore Alaska, and as other Arctic countries such as Russia and Norway are actively developing their northern frontiers despite concerns about climate change and melting sea ice.
Now, nobody likes pollution. And the climate is changing (as it continually does over time).
But modern extracting procedures are far safer than those of decades ago, back when the Mackenzie Valley Pipeline — designed to transport natural gas from the Beaufort Sea to tie into gas pipelines in northern Alberta — was first proposed in the early 1970s. It scrapped following Justice Thomas Berger’s famous inquiry and later revived and left to linger in regulatory purgatory until finally being laid to rest in 2017.
But now our economy is in pandemic tatters. Why not reignite it with the help of oil and gas?
Think about it: the Inuvik-Tuk Highway is completed and is set for some upgrades. The road goes through and nearby some major natural gas fields. That was part of the reason the road ever got green-lit many years ago (by a Conservative federal government) in the first place.
Export revenue. Hundreds of good jobs. We just need some damn better thinking from our elected officials. Yeah, those same Liberal slimeballs (too harsh?) who just cancelled Parliament to escape their latest scandal.
Might as well get used to living in a snow globe sitting with our hands out. Waiting for some ‘green’ energy projects. That could happen if the feds decide to invest in green projects to re-start the economy, but how much money can the NWT realistically be expected to receive?
Want some more reality?
In 2018, the GNWT and federal government proudly announced an investment of $40 million toward the Inuvik Wind Generation project.
In 2020, the Nihtat Gwich’in Council rejected that idea when it asked the Gwich’in Land and Water Board to not allow the construction of that wind turbine project as it is on reindeer grazing habitat.
So, there’s that. Turns out it’s not easy being green.
As I scanned various news stories, I found:
- The diamond mines are entering their last years of production. There are no new mines ready to provide the same number of high-paying jobs, contracts, taxes, royalties, and impact benefit agreements. There are projects pending, but it has been difficult to find investors.
- The construction sector is not as robust as it once was, now that the new Stanton Territorial hospital is finished. Tourism, largely dependent on international visitors — ironically, from China, epicentre of the ‘Rona — was our one bright hope, but COVID has put that sector into a coma for the foreseeable.
- The GNWT’s Industry, Tourism, and Investment department’s website still optimistically states it “promotes economic self-sufficiency through the responsible management and development of NWT petroleum resources to create a prosperous, diverse and sustainable economy for the benefit of all NWT residents.”
That last bullet point really misses the mark, as there is no activity in the petroleum sector to responsibly manage. It’s just so 2015.
And the current group of MLAs in the NWT Legislative Assembly seem to be too concerned with stamping out scandals and infighting in its circular firing squad rather than developing the COVID-wracked economy.
In fact, with the ouster of its minister of Infrastructure and Industry, Tourism, and Investment essentially for being unable to play nicely with others, it will take the new minister weeks or months to get up to speed on the complicated files. And the new minister will not have the career knowledge of the previous minister, Katrina Nokleby, a geological engineer.
But in any event, I just don’t believe oil and gas extraction is a priority for the current Assembly.
OK, I know it. As I reviewed the Priorities of the 19th Legislative Assembly. Simply put, the GNWT has a lot of challenges and a lot of competing interests. Most of the priorities involved spending money the GNWT doesn’t have and will have to go cap in hand to the feds for.
The only bullet points in the priorities fact sheet that dealt with making money through resources extraction were:
- Increase economic diversification by supporting growth in non-extractive sectors and setting regional diversification targets.
- Increase resource exploration and development.
- Reduce the cost of power and increase the use of alternative and renewable energy.
So, yeah, not that hopeful. But the electorate was distracted by some shiny objects last fall when votes were cast, taking its collective eye off the ball. That ball being the territory’s historic method of producing revenue and jobs with multi-sector resource extraction — minerals, diamonds, oil and gas. Lest we become even more dependent of federal government handouts.
Enjoy living in your perpetually struggling, have-not snow globe, folks.