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Canada’s three northern territories mount massive land grab Leaders of Arctic jurisdictions want federal government to cede control over petroleum riches in huge unexplored region Gary Park PNA Canadian Correspondent
They have few constitutional powers and they speak for only 80,000 of Canada’s 30 million people, but Canada’s three northern territories are mounting an unprecedented push to seize control of the petroleum and mineral resources in more than 40 percent of the country’s land mass.
The governments of the Yukon, Northwest Territories and Nunavut have formed a united front to challenge federal rights to regulate and collect the revenues from all oil and gas production north of 60 degrees latitude.
The stakes are immense, with the Geological Survey of Canada estimating the North has 25 percent of Canada’s remaining discovered petroleum and 50 percent of its remaining reserve potential.
For the Mackenzie Delta/Beaufort Sea region alone, discovered reserves are placed at 1.4 billion barrels of oil and 12.7 trillion cubic feet of natural gas, but some experts believe the region could easily top 60 trillion cubic feet of marketable gas, matching what is now thought to be left in the Western Canada Sedimentary Basin’s conventional fields.
From the most actively explored regions, in the western Northwest Territories and southern Yukon, estimated proven plus half probable reserves total 15 trillion cubic feet of gas and 1.75 billion barrels of oil in 26 significant discoveries and three producing fields.
Yet production remains modest at 30,000 barrels per day from the Northwest Territories’ Norman Wells oil field and 330 billion cubic feet of natural gas in total from the Pointed Mountain fields close to the British Columbia-Alberta border.
To advance their claims, the territorial leaders signed a Northern Cooperation Accord, the first step in their attempt to wrestle authority over natural resources away from the federal government.
Territories little more than colonies Under the Canadian Constitution, all 10 provinces control their natural resources, leaving the territories as little more than colonies, dependent on the federal government for the bulk of their financing.
But Nunavut Premier Paul Okalik said his northern colleagues are determined to “cooperate in putting our agenda forward,” and high on that agenda is “northern control over northern resources,” so that the territories can shape their own economic development.
Okalik said the territories hope to build on the model used to create the Nunavut territory earlier this year from Canada’s largest aboriginal land claim. Under that deal with the federal government, the Inuit have outright ownership of 18 percent of their land, or 355,000 square kilometers and share joint control of the balance. They also collect 50 percent of the first C$2 million in royalties from any project and 5 percent thereafter.
The Yukon also made progress towards greater autonomy last year when the federal government transferred administrative authority over oil and gas to the territory, while retaining its regulatory and revenue-collecting powers.
That allowed the Yukon to award the first oil and gas exploration rights in more than 20 years in two areas of the northern Yukon where reserves of 142 billion cubic feet of gas and 9.5 million barrels of oil have been identified.
Industry nervous However, the prospect of a jurisdictional showdown makes the industry nervous at a time when 1 trillion cubic feet of gas has been discovered in the southern Northwest Territories over the last year and both the Northwest Territories and Yukon are accelerating the pace of land claims agreements.
What companies are more anxious to see is a royalty system that works for industry and the aboriginal people and is modeled after the British Columbia, Alberta and Saskatchewan regimes.
“Simple, stable and competitive is what we want,” said Greg Stringham, vice president of the Canadian Association of Petroleum Producers.
One company president, who asked not to be identified, said the territories should soften their ambitions for now and work instead on attracting the investment capital that “serves everybody’s interests.”
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