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Northwest Territories on verge of resource control
Gary Park For Petroleum News
Canada’s Northwest Territories has ended a quest stretching over decades by negotiating the basis for what Prime Minister Stephen Harper said will be “the power to make resource management decisions ... and the power to collect royalties.”
Speaking in Yellowknife, he said an agreement-in-principle transferring those rights from the Canadian government to the NWT is a key element of his desire to establish a northern strategy that places the destiny of the NWT in the hands of its residents and builds a “strong and prosperous north.”
In the process, Harper praised the dedication of NWT Premier Bob McLeod in achieving the agreement that is targeted for a final settlement in April 2014.
The Canadian government “believes the opportunities and challenges (in the NWT) would be better handled by the people who understand them best ... that is to say you who live here in the Northwest Territories, wherever possible, should make decisions about regional matters.”
Some of the revenues from resource projects will go directly to the five NWT aboriginal governments that have signed on to the devolution agreement.
The Canadian government will keep ownership of offshore resources, notably the Beaufort Sea, but will open negotiations on revenue-sharing within 60 days of a final agreement.
Harper noted that a decade-old agreement with the Yukon Territory has seen unemployment rates drop and investment rise.
McLeod said the final pact is expected to be signed after his government has held community information sessions.
50% up to C$60 million He said the agreement would allow the NWT to keep 50 percent of resource revenue up to an annual limit of C$60 million, with 25 percent of that amount going to native governments.
McLeod has long argued that the NWT, one of Canada’s three territorial governments, should have the same rights as Canada’s 10 provinces to “develop and market our natural resources without being held up in a regulatory logjam. The irony is that the NWT has vast oil and gas resources, but still has to import fuel.”
He said the NWT is poised to take a leap, take on more province-like responsibilities and became less dependent on federal bureaucrats.
High on his action list is the Imperial Oil-operated Mackenzie Gas Project to develop an established 6 trillion cubic feet of Mackenzie Delta gas for southern Canadian and United States markets, but a venture that got bogged down through years of regulatory delays and has since been overtaken by the development of shale gas that has saturated continental markets.
McLeod said previously that if there is no North American market for the Mackenzie gas, the NWT should have the right to explore other options, including the export of that gas as LNG to Asia.
Former NWT premier Stephen Kakfwi, speaking for the two aboriginal governments that are holding out against devolution, said they fear that the NWT government will give greater priority to oil and gas activity than the socio-economic and environmental impacts of those projects.
He questioned whether consultation could be meaningful when the terms of devolution have already been negotiated.
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