Plea for Arctic infrastructure

Harper focuses on economic benefits of developing Canada’s North; companies want to see government complete Mackenzie Highway

Gary Park

For Petroleum News

Canadian Prime Minister Stephen Harper, as he has done on five previous Arctic tours since being elected in 2006, again told northerners in August that their region is a “fundamental part of our heritage and national identity and a cornerstone of our government’s agenda.”

This time he engaged in less drumbeating about the use of Canada’s military to reinforce its claims to sovereignty and focused more on the national economic benefits of developing the North’s “awesome resource potential.”

But those words of encouragement were not accompanied by any new financial help for companies on the frontlines of Arctic resource development.

The realities are well understood by companies such as Agnico-Eagle, which spent C$60 million building a 40-mile road from Baker Lake, Nunavut, to its Meadowbank gold mine site.

In the words of Senior Vice President Jean Robitaille “it would be helpful if the government would develop more of the infrastructure.”

That same argument was advanced by Northwest Territories Transportation Minister Michael McLeod in an article he wrote in August for the Hill Times, an independent newspaper that covers federal issues, updating progress on the 60-year dream of completing a highway to the Arctic Ocean.

He said that despite government surveys, geotechnical investigations, environmental studies, bridge and culvert designs, some detailed design and even tender package preparation, only the first 130 miles of a 700-mile road from Fort Simpson to Tuktoyaktuk have been completed.

The idea of a Mackenzie Highway was revived again by the NWT government in 1999 and in a 2005 funding proposal, while discussions have continued to focus on the economic and social benefits a highway would provide for the Mackenzie Gas Project and a fiber optic cable link with Southern Canada.

McLeod said the highway, estimated to cost C$1.8 billion in a 2009 report, could extend the winter oil and gas exploration season to 120 days from 90 days and could reduce costs by as much as C$1.25 billion, or 43 percent, based on drilling 500 wells over 25 years.

Government revenue from exploration and production of those wells would increase by C$3.4 billion over the same time period.

McLeod noted that the NWT government signed a funding agreement in early 2010 with CanNor to complete the project description report for construction of the highway from Wrigley to Inuvik and also signed memoranda of understanding with various land claimant organizations along the Mackenzie Valley.

He said completed project description will now be combined into a single document to be filed with the Mackenzie Valley Land and Water Board to start an environmental assessment process.

Separately, the Canadian Environmental Assessment Agency has allocated C$54,420 to two Inuvialuit groups participating in an environmental assessment of a proposed extension of the Dempster Highway from Inuvik to Tuktoyaktuk.

It’s a follow-up to the 2010-11 federal budget that promised C$150 million towards the final 85 mile stretch of an all-season road.

The highway requires permission from the NWT Water Board, Fisheries and Oceans Canada and Transport Canada as well as permits from Indian and Northern Affairs Canada.

Despite resistance last year by a regional regulatory committee, on grounds of potential negative impacts on the environment, Tuktoyaktuk Mayor Merven Gruben said a final environmental report should be done this fall, allowing construction work to start as early as this winter.