High on the High Arctic

Canada’s Arctic Islands come into sharper focus as southern prospects fade

Gary Park

For Petroleum News

At a time when the Mackenzie Gas Project is bogged down in government and industry indecision, it might seem to be a case of overreaching to talk about development of gas resources in Canada’s High Arctic islands.

But that doesn’t deter Benoit Beauchamp, executive director at the University of Calgary’s Arctic Institute of North America and a former Arctic field geologist at the Geological Survey of Canada, who has spent years weighing the region’s potential.

He is in no doubt that gas from the High Arctic will be needed given the shrinking reserves and the declining size of new discoveries in Western Canada and the politically volatile state of so many oil and gas opportunities around the globe where “warlords rule the day (and) where the governments walk away from contracts.”

Beauchamp told a meeting of petroleum geologists earlier in March that Canada’s Arctic Islands have a resource potential of 118 trillion cubic feet of gas and 3.8 billion barrels of oil.

To date discoveries have yielded 17 tcf of gas and 335 million barrels of oil from just 110 wells, of which 75 were genuine wildcats and 17 struck oil and gas.

Sixteen of the fields accounting for all of the discoveries are in the Sverdrup basin, which spans 720 miles from Prince Patrick Island in the Northwest Territories to Ellesmere Island in Nunavut Territory.

The other three regions in the Arctic Islands Petroleum Province are the Arctic Fold Belt, the Arctic Platform and the Arctic Coastal Plain.

Drilling done decades ago

Since that flurry of activity much has changed, including the impact of climate change which has advanced the timeline for ice-free Arctic waters to 2020 from 2050, research into methods of transporting gas in the Arctic and land claims settlements with northern aboriginals.

But Beauchamp noted that the obstacles are still formidable, ranging from fragmented ownership of significant discovery licenses, which have hundreds of co-owners; the prospect of strong multi-year ice advancing to the Northwest Passage; the problems posed by rising sea levels; opposition from environmentalists to industry activity and a tangle of overlapping jurisdictions; and territorial disputes involving Canada, the United States, Russia, Norway and Denmark.

Commercial options

• LNG could see gas shipped to a receiving terminal being built by Irving Oil and Spain’s Repsol near Saint John, New Brunswick, or to established regasification plants in the U.S. Northeast.

• LNG could be delivered to a regasification terminal on the Mackenzie Delta, where the gas could be fed into a Mackenzie Valley pipeline, or a storage facility could be built in West Greenland for transshipment to Europe.

• In addition to LNG, the Canadian Energy Research Institute has studied the use of compressed natural gas technology and gas-to-liquids technology.

He said the melting of sea ice will allow greater freedom of transportation and could open the Polar Continental Shelf, which is covered by thick, heavily compacted ice, to exploration.

But he warned the destabilization of permafrost poses engineering challenges for structures such as roads and onshore drilling rigs.

Erosion of the coastline and rising sea levels could present difficulties for low-lying fields, given that the three anchor fields on the Mackenzie Delta that underpin the Mackenzie Gas Project could be turned into offshore fields, depending on how much the sea level rises, Beauchamp noted.

Unlike the Mackenzie Valley, the High Arctic is not hindered by unresolved land claims. Nunavut is entirely composed of one settled claim and the west side of the Northwest Territories is covered by the Inuvialuit settlement.