Mr. Speaker, today I would like to speak about an exciting initiative being carried out by the Petroleum Products Division of the Department of Public Works.
The Petroleum Products Division provides fuel sales, dispensing and delivery services in 16 NWT communities not served by the private sector and in 20 communities of the Northwest Territories Power Corporation. For many years petroleum products destined for Beaufort-Delta communities have been purchased solely from northern Alberta sources, transported via rail car to Hay River and then loaded onto barges for transportation down the Mackenzie River.
In 2005 the Petroleum Products Division began pursuing an alternative model designed to reduce the cost of delivering fuel to communities in the Beaufort-Delta. Instead of delivering fuel via the traditional route, this new Over-the-Top route saw diesel fuel and Jet A-1 aviation fuel purchased from North American west coast or offshore refineries and then transported along the Alaskan north shore by larger vessels and delivered to facilities in Ulukhaktok, Paulatuk, Sachs Harbour, Inuvik and Tuktoyaktuk.
The resupply routes for the community of Tsiigehtchic and for the Northwest Territories Power Corporation in Fort McPherson will also change as a result of this new delivery route. In recent years diesel fuel has been resupplied via the Dempster Highway. This year the diesel fuel required for these two locations was delivered via the Over-the-Top route and is staged in Inuvik. The diesel fuel will then be trucked as required to the community of Tsiigehtchic and for the Northwest Territories Power Corporation in Fort McPherson.
The use of this new delivery route during the 2008 shipping season for diesel fuel and Jet A-1 aviation fuel has resulted in freight cost savings of more than $2 million — savings that will be passed directly to consumers in Beaufort-Delta communities served by the Petroleum Products Division.
While it is true that the cost to purchase fuel has increased and the price of fuel has risen, the price of diesel fuel landed in the Beaufort-Delta communities is between 12 and 24 cents less expensive for consumers than it would have been had the fuel been transported via the traditional Mackenzie River route.
Because of our relatively small volumes and in order to meet GNWT specifications, it was necessary to purchase gasoline from Alberta sources and transport that gasoline via the traditional route. Because of that the freight cost savings achieved for diesel fuel and Jet A-1 fuel could not be duplicated for gasoline. The Petroleum Products Division will pursue this in coming years in an effort to achieve similar savings for consumers of gasoline.
This initiative is an excellent example of the kind of creative thinking that is happening within the Department of Public Works and Services. Through the pursuit of new initiatives, the Petroleum Products Division was able to make a small change that resulted in big savings for residents of the Beaufort-Delta.
