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Vol. 16, No. 6 Week of February 06, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

NWT signs for transfer

Agreement in principle with Ottawa; 5 of 7 aboriginal groups not in agreement

Gary Park

For Petroleum News

Two decades of negotiations brought the Canadian and Northwest Territories governments to a signing ceremony that they hope will lead in a couple of years to a final transfer of control over northern natural resources to the NWT, but the gulf between the aspirations of the NWT government and a large portion of its aboriginals remains as wide and deep as ever.

NWT Premier Floyd Roland and federal Indian Affairs Minister John Duncan mustered as much optimism as they could in announcing a “devolution” agreement-in-principle that sets the stage for the NWT to control resource development on public lands and the right to collect royalties and taxes from the resources.

Roland said that much of what Canada’s 10 provincial governments have as a matter of constitutional right is what northerners are now close to achieving.

He said the NWT, which occupies about 12 percent of Canada’s land mass, is now at a point where it “can progress to a final set of negotiations where a final set of decisions will be made by northerners as to whether it’s good enough to proceed.”

Anne Marie Tout, president of the NWT Chamber of Commerce, said the milestone agreement gives the NWT the long-awaited and “rightful ability to manage and control public lands and to secure a share of revenues generated from those lands.”

Dene boycott signing

Only two of the NWT’s seven aboriginal groups — the Metis and Inuvialuit, who have negotiated land claims and self-government settlements in the oil and gas-rich northwest corner of the NWT — signed the deal. The rest including the Dene, whose land covers about 40 percent of the planned right of way of the MGP pipeline, boycotted.

Those five have appealed to Prime Minister Stephen Harper to overturn what they call a “secretive bilateral devolution negotiation.”

However, Duncan said the pact will not infringe on the rights of aboriginal negotiators or groups, but he could not say whether the full participation of all seven groups is legally necessary.

“We think there will be full participation,” he said. “The agreement is predicated on that occurring.”

Roland said it will be at least two years before the legal text of a “devolution” agreement is in place, giving aboriginal leaders ample time to make their case.

“Now we’ve come to a place … where a final set of decisions will be made by northerners as to whether it’s good enough to proceed,” he said.

At stake is about 6 trillion cubic feet of discovered gas on the Mackenzie Delta, backing the proposed Mackenzie Gas Project, and an estimated additional 55 tcf in the Delta and Beaufort Sea, plus 6.2 billion barrels of onshore and offshore oil.

The NWT government has insisted all along that a transfer of federal powers is necessary to attract industry investment in resource development.

NWT production has peaked over the past decade at about 20,000 barrels per day of oil and 670 million cubic feet per day of gas from the southern NWT, but gas exploration has gone into decline pending Canadian government approval and corporate sanctioning of the 1.2 billion cubic feet per day MGP and an associated liquids pipeline.

Currently resource royalties from the NWT go directly to Ottawa, which funds most of the NWT’s budget. The NWT has the highest per capita GDP of all provinces and territories at about C$90,000 for a population of 43,500.

If the transfer of power takes place, Ottawa will make a one-time payment of C$27 million in transition costs and C$65 million a year to cover the NWT’s increased expenses.

Dene National Chief Bill Erasmus said “we’re not against devolution, but our people want to be equal partners and they want to participate in developing the North in a positive way.”

Dehcho Chief Sam Gargan said the current deal does not give the NWT a large enough share of resource royalties and does not protect the rights of Dene groups in their land-claim and self-government talks with Ottawa.

Of Canada’s other two territories, the Yukon, with an estimated 900 million barrels of oil and 17 tcf of gas, signed a resource deal in 2003. Duncan said Ottawa is committed to starting negotiations with Nunavut, which, based on limited exploration, has an estimated 320 million barrels of oil and 16 tcf of gas.

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