Paving way for northern oil, gas development

Flurry of negotiations between Canadian and NWT governments under way for Native self-government, resource revenue sharing

Gary Park

Petroleum News Calgary Correspondent

The Northwest Territories is immersed in landmark negotiations that could help open the door to the greatest wave yet of resource development in Canada’s north.

Pivotal talks between the Canadian and Northwest Territories governments soon will yield an agreement on the transfer of federal powers and royalties to the territories, leaders of both governments said in Inuvik April 16.

Indian Affairs and Northern Development Minister Robert Nault told a press conference the current process will lead to an agreement in principle, which Northwest Territories Premier Stephen Kakfwi insists must be in place before a Mackenzie Valley gas pipeline can proceed.

Kakfwi said Prime Minister Jean Chretien has pledged that a devolution and resource revenue-sharing deal will be in place before Chretien retires, and “he’s leaving in February (2004).” The Northwest Territories premier frequently has made his case that the federal government needs to come to terms quickly with the importance of power-transfer negotiations with the territory.

He said that before the end of the decade, the territories, through gas development and diamond mining, will be capable of paying its own way with resource revenues and no longer reliant on federal handouts.

In a Calgary speech last month, Kakfwi also said that “fundamental to any devolution agreement is the reality of aboriginal governments in the NWT sharing jurisdiction and resource wealth.”

He said the negotiations are “taking place at a time when the industry wants certainty.

“We agree and are prepared to make sure that the regulatory and permitting processes for gas field and pipeline development are not unduly disrupted, and that resource revenue regimes are fair to all parties.”

But he put the federal government on notice that Northwest Territory residents “want to see an immediate return on resource revenues already being generated from diamond mining in their territory.”

Other energy developments

The two governments signed an agreement in principle on April 16 covering 7,100 Inuvialuit and Gwich’in residents of the Mackenzie Delta/Beaufort Sea region that paves the way for a final self-government pact.

The agreement is an attempt to reconcile the constitutional rights of aboriginals with the rights of non-aboriginals who account for about half the population in towns such as Inuvik, although the Inuvialuit and Gwich’in make up 75 percent of the residents in eight delta/Beaufort communities.

While the agreement is not legally binding, it is expected to create Canada’s first municipal-level governments with guaranteed seats for aboriginals — a new layer of government with potential power to tax industrial development.

Finally, there was the April 18 interim resource management agreement with the Deh Cho First Nations of the southern Mackenzie Valley that identifies about 40,000 square miles for oil and gas development and raises hopes the Deh Cho will participate with other Northwest Territories aboriginals in the planned Mackenzie Valley pipeline.

“I’m a bit flabbergasted that this has happened as quickly as it has,” said Mike Nadli, Deh Cho grand chief. “This deal is unprecedented in its scope. It will pave the way for orderly development in the Deh Cho region.”

At the head of the waiting list are Purcell Energy, Talisman Energy and Chevron Canada Resources who have stalled development of gas plays in the Liard Plateau pending a deal with the Deh Cho.