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NWT ‘on track’ for new era Northwest Territories working regulations as it approaches taking over most of its onshore, offshore oil and natural gas activities Gary Park For Petroleum News
The Northwest Territories is within 18 months of gaining control over most of its onshore and offshore oil and natural gas activities, confident that “everything is on track” for the levers to pass from the Canadian government, Premier Bob McLeod said.
“There are a lot of moving parts, but we’ve finished an organization design, made job offers and introduced some of the legislation” needed to give the NWT powers that almost match those of Canada’s 10 provinces, he said in an interview with Petroleum News.
The transfer of onshore jurisdiction over public land, water and resource development should still take place as scheduled on April 1, while a parallel agreement for the offshore should take place “fairly quickly, hopefully within a year of April 1,” McLeod said.
He said five of seven aboriginal governments have signed the devolution agreement and “active discussions” are taking place with the other two, adding, “I don’t think we will have any difficulties. We’re getting closer (to a deal) all the time.”
Energy regulator in works The NWT is also working on the creation of its own energy regulator, with Industry Minister Dave Ramsay meeting with industry leaders and officials at the newly formed Alberta Energy Regulator, which is designed to consolidate the regulatory functions contemplated under the province’s Responsible Energy Development Act.
But Ramsay told the Calgary Herald he is not certain what form the NWT’s regulatory system will take, whether a tribunal structure makes sense and what role the National Energy Board should play.
He said the NWT intends to keep the industry informed about changes that will stem from devolution as well as understanding what steps the NWT can take to ensure companies continue to invest in Canada’s North.
Regulatory hurdles cited The biggest challenge was identified in October by Henry Sykes, president of northern explorer MGM Energy, who said regulatory hurdles are the main reason he believes that production growth in the NWT’s Canol shale play in the Central Mackenzie Valley will have difficulty matching the prolific Bakken oil fields of North Dakota.
Sykes, who was part of an 18-member delegation of NWT government and aboriginal leaders who made a fact-finding tour of the Bakken in North Dakota and Saskatchewan, told the Globe and Mail: “It takes so long to get anything done in Northern Canada today that if more Bakkens develop in the U.S. by the time we finally decide that it’s OK to develop the Canol we may find ourselves in the same position as the Mackenzie Gas Project (MGP) — nobody needs the product anymore.”
He said MGM withdrew an application last year to drill its Canol acreage after the Sahtu Land and Water Board demanded an environmental assessment, which could “take years and cost millions of dollars and in the meantime you can’t do anything.”
Meetings with industry McLeod, acknowledging the industry’s unhappiness, said he held a “very good meeting” recently with most of the Arctic oil and gas companies, including Shell, Husky Energy, ConocoPhillips and MGM.
“We agreed to work together and meet on a regular basis,” he said, noting that he is hopeful Imperial Oil and Chevron will start drilling within three years in the Beaufort Sea.
McLeod also said his government is “working very closely” with Alaska in exploring alternative options for getting NWT gas to market, possibly as LNG from Alaska, if the MGP plan to ship Mackenzie Delta gas to southern Canada and the Lower 48 “doesn’t go through.”
He said MGP operator Imperial believes that developing Arctic gas is cheaper than shale gas because fewer wells are needed.
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