Not a time to think small

NWT minister: Mac job training program is springboard to 100-year industry

Gary Park

For Petroleum News

Northwest Territories Industry Minister Brendan Bell is a visionary on a grand scale.

For him, the Mackenzie Gas Project opens the door to a 100-year oil and gas industry in Northern Canada.

And Bell counts a socio-economic agreement between his government and the MGP proponents as one small, but vital step in that direction.

Of all the elements in a complex 67-page pact, the key success for him is a C$21 million job training fund, to be jointly funded by the NWT government and the industry partners.

Broken down, it would provide C$1 million a year over 10 years once construction starts, then C$500,000 a year through the project’s operating life, which Imperial Oil spokesman Pius Rolheiser notes is “an indefinite thing” because of uncertainty over how large the pipeline system will be and how much gas might be discovered if the MGP proceeds.

Bell told Petroleum News he views the training program as a breakthrough because it is not confined to just pipeline construction. The objective is to prepare northern residents for future exploration and development that will be a building block in a 100-year industry.

Agreement modeled on mine pacts

Based on the regulatory filings for the MGP, it sets a goal of hiring NWT residents for 16 percent of the pipeline construction jobs, which represents an average 790 jobs a year over four years, although the MGP, in its drive for cost-control, is exploring completion of the pipeline in only two years.

Once a pipeline is operating, northerners will qualify for 72 percent or 138 of the full-time positions.

But Bell concedes the NWT, with a population of only 43,000, of whom only 2,000 are unemployed, will be “challenged to meet the employment targets.”

However, reaching a deal well in advance of any final decision to proceed gives the NWT some time “to get out in front ... and do as much as we can now” to put skills and employment programs in place, he said.

“Anybody who is eager and wants to work will be able to,” Bell said.

The overall significance of the agreement tends to be in the eye of the beholder.

Bell rated the signing as a “big milestone ... a very good sign that moves this project ahead.”

Analyst: deal one of many checkmarks

He suggested that Imperial wouldn’t have made the agreement public unless it was committed to the project.

Rolheiser was more cautious. Unwilling to characterize the pact as a positive step forward, he said it would only become that if the project does proceed.

He told Petroleum News many “more significant milestones” have yet to be reached, covering regulatory approvals and conditions, final costs and construction schedules, commercial agreements with producers and customers and a fiscal framework with the federal government.

Although the agreement has been signed and executed and takes effect immediately, most of the programs only swing into action if a decision is made to go ahead, Rolheiser said.

Hands across the border

Following meetings Jan. 19 with Alaska officials, he said the NWT is ready to facilitate any contacts with the Canadian and provincial governments that can help Alaska get its gas to market.

Bell told Petroleum News his government is “indifferent” to whatever route Alaska takes to monetize its gas.

He expects that choice will be based on the project that generates the “biggest netback to Alaska citizens.”

Bell said NWT would raise objections only if Alaska revived talk of a subsidized floor price for the gas, which he said would be “market distorting.”

However, he said it appears that “issue has largely faded,” especially since the last Congressional elections that have removed the appetite in Washington for making concessions to Big Oil.

—Gary Park