Bob McLeod made history last year when his legislature re-appointed him as premier of the Northwest Territories - a first in Canada’s largest northern jurisdiction.
He earned that vote of approval by acting in a respectful, self-effacing, modest manner, showing a firm resolve to protect and advance the interests of his residents by tapping into known and unproved resources.
Speaking to the annual Arctic Oil & Gas Symposium in Calgary in late March, McLeod reeled off the resources that could be developed: an estimated 1.2 billion barrels of oil and 16.2 trillion cubic feet of natural gas across 1.3 million square kilometers in the NWT, potential Canola and Blue Fish deposits near Norman Wells of 191 billion barrels, marketable gas resource potential of 77 tcf in the Liard basin and 92 tcf of gas and 7 billion barrels of oil in the Beaufort Sea.
But his patience with the Canadian government shows signs of wearing thin as his resolve grows to play an even larger role in the economic evolution of Canada’s three northern territories.
Speaking to the annual symposium, McLeod unburdened himself of years of growing frustration with government policies he said have created a “no-win situation” for the NWT in its efforts to develop a strong resource economy.
Five-year ban
The breaking point for the NWT occurred just before Christmas when the government of Prime Minister Justin Trudeau announced a five-year ban on offshore oil and gas permits in the Arctic - a decision McLeod said was made “without any meaningful consultation with Northerners ... expecting that the well-paying jobs the oil and gas industry creates can be replaced by tourism and fishing.”
Right now, he suggested that move to close off a significant avenue for potential economic development for oil and gas development “does not do much to instill confidence that the federal government has an economic vision for northerners.”
McLeod said that is “particularly concerning given the federal government’s focus on reconciliation with indigenous people, as the moratorium has very real and immediate consequences for the Inuvialuit and Gwich’in people of the Beaufort Delta.”
Asking if there is “an opportunity, at all, for future growth and development?” he noted that approvals for the Mackenzie Valley natural gas pipeline expire in 2022, while a production shutdown in Norman Wells earlier this year reduces confidence in the industry’s future in the NWT.
Future in NWT?
Against that backdrop, McLeod said it is valid to ask whether there is any future for oil and gas in the NWT.
“We are faced with odds that a Vegas gambler might cringe at: low oil and gas prices, North American basin competition, changes to the LNG market, cost pressures, increasing political and regulatory risk, a global shift to renewable energy,” and Trudeau’s unveiling of a carbon pricing regime, he told the symposium.
What compounds the NWT’s concerns is the prospect that President Donald Trump will reverse Barack Obama’s ban on drilling in the bulk of U.S.-owned waters in the Arctic Ocean, adding to the NWTs competitive disadvantage.
“I think for a lot of people, (Trudeau) took away hope of ever being able to make a long-term healthy living in the (Canadian) North by suggesting there should be a lifetime moratorium in the Beaufort,” McLeod said.
But he was emphatic that his government remains committed to “ensuring future generations will have the opportunities to find well-paying, stable jobs that will allow them to achieve the quality of life they seek and deserve.”
And that is regardless of the fact that non-renewable resources represent the foundation for the NWT’s success, making up almost 30 percent of its gross domestic product and employing more than 15 percent of its workforce.
Pan-territorial strategy
In January, McLeod met with the premiers of the Yukon and Nunavut to lay the groundwork for a Pan-Territorial Sustainable Development Strategy to ensure northerners “have a strong collective voice in ongoing discussions about the future of the North.”
“We are not content to stand aside and let other governments or countries tell us how and when the North can be developed,” he declared. “We have a direct stake in creating a strong and sustainable future according to Northern priorities and values.”
McLeod said it is essential that the development of an Arctic strategy begins with “the full involvement of the territorial governments and that we remain full partners in developing, approving and implementing Arctic priorities, whether they are an aspect of domestic or foreign policy.”
He said that outlook is gaining momentum through significant progress over the past year with the Acho Dene Koe First Nation, the Fort Liard Métis Local and the Canadian and NWT governments towards completing a lands, resources and self-government final agreement.
In addition, he said the NWT is working on improvements to its Oil and Gas Operations Act now that it has legislative control over its resource development as it prepares for the industry’s “revitalization” that will start with bringing “renewed interest, focus and accessibility to oil and gas exploration in the Arctic.”
McLeod’s own hopes are pinned in “safe and responsible drilling in the Beaufort Sea” within 20 years, oil and gas extraction in the Liard basin and development of the Canol and Blue Fish deposits.
In a final pitch to industry leaders at the Arctic symposium, many of them from companies that have shut down operations and exploration plans in the NWT, McLeod said “we are worth the long-term investment and look forward to seeing you back in the North.”
