Mr. Speaker, we want a territory where a strong, diversified economy provides opportunities and choices to all our residents. Socially responsible and environmentally sustainable development of our resources will be one of the keys to achieving that goal. The Northwest Territories is resource-rich and brimming with potential. Today I would like to speak about some exciting developments in the oil and gas sector and of the significant opportunities the development of resources can bring to our residents.
The Sahtu region is a prime example of potential in the petroleum industry. A 2011 call for bids resulted in the commitment by industry to invest $534 million to test 11 parcels of land in the Canol shale formation for their petroleum potential. Industry experts believe that there is potentially one to two billion barrels in this area just sitting there waiting to be tapped.
Work on these parcels began this past winter and we saw unprecedented levels of activity in the Sahtu. Major players in the international oil industry, including ConocoPhillips, Husky Oil Operations Limited, and Explor Geophysical, have signed access and benefit agreements with various local land corporations. These agreements result in jobs for residents as well as direct and indirect investment in the local community.
For example, in Norman Wells the increased petroleum activity translated to full occupancy of four hotels in the community for six months, a 100 percent increase in sales at grocery stores and vehicle rentals, and a tripling of aircraft takeoffs and landings. This is real on-the-ground-activity, and it is exciting.
Mr. Speaker, the Department of Industry, Tourism and Investment is taking action to ensure that residents of the Sahtu make the most of the economic opportunities that this activity represents. The department has been working with the National Energy Board, the Northwest Territories Geoscience Office and Aboriginal Affairs and Northern Development Canada – and supporting local initiatives such as assisting land corporations understand hydraulic fracturing – to ensure that communities have good information for making decisions about development.
Through our regional office, we are also supporting the Tulita and K’asho Go’tine districts in their efforts to obtain a rights issuance on their own settlement lands. Production of oil on settlement lands would result in employment and business opportunities, and royalties from production on their private lands would go directly to these beneficiary organizations.
The renewed interest in oil and gas exploration and development only strengthens the need to develop our transportation infrastructure. Permanent highways could bring down the cost of living in some NWT communities and help develop the region’s oil and gas industry, not to mention the long-term jobs it will bring in road construction and maintenance.
Mr. Speaker, these are only examples of what is happening today. This activity will continue for the next few years and potentially for decades to come. Beyond that, the next frontier is offshore, beneath the waters of the Beaufort Sea. Within our territorial waters, the Northwest Territories has resources in the Beaufort Sea that extend to the North Pole and, according to the United States Geological Survey and our own advisors, oil potential to rival the Gulf of Mexico.
We are now seeing new activity in this area with Chevron gathering seismic data this summer and Exxon making plans for exploration drilling in the next few years.
Also, the Minister of Aboriginal Affairs and Northern Development Canada issued two calls for bids this year. The first call for bids is for the two parcels in the central Mackenzie Valley, and the second call for bids consists of six parcels in the Beaufort Sea Mackenzie Delta.
Our challenge as a government is to ensure these resources are developed in a manner that brings economic benefits to our residents while ensuring the protection of our environment. We continue to pursue the authority to regulate development in the Northwest Territories through devolution. Once in place, Northerners will finally be able to make the decisions about how we develop our resources and protect our environment. Acquiring this authority, and the resource royalties that we would start collecting, will be our best opportunity for ensuring our residents benefit from development in the Northwest Territories.
In the meantime, the Government of the Northwest Territories continues to work with existing regulators to ensure northern interests are understood and respected. The National Energy Board recently completed an Arctic review to help us learn how best to regulate our offshore activity.
The GNWT participated fully in this review and we are pleased with the extensive engagement with Northerners that took place during this process. The Arctic offshore drilling review gave us insight about the challenges of Arctic exploration and development. It will help the National Energy Board ensure the correct safety and environment protection requirements are in place when considering future applications by companies who want to drill in the Arctic offshore.
Mr. Speaker, we are confident that with our continued efforts, as well as those of our industry partners, we will be able to ensure safe, sustainable development of this territory’s resources and maximum benefits for our residents for years to come. Thank you, Mr. Speaker.
Thank you, Mr. Ramsay. Premier, Mr. McLeod.
