Wally Schumann: Canada Gas and LNG Conference Keynote Address

May 22, 2019
Ministers' Statements and Speeches

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Good morning everyone and thank you for the opportunity to speak to you today about LNG potential in the Northwest Territories.

In the Northwest Territories, responsible resource development is at the core of who we are. It drives our economy, has generated billions in opportunities for northern and Indigenous-owned businesses and provides thousands of jobs to residents.  

The GNWT continues to explore ways to diversify our economy by looking at sectors like agriculture and tourism, but we know that the responsible development of our natural resources has and will continue to be the single biggest sector of our economy.

Canada’s North has always been an area rich with deposits of valuable minerals and prospective reserves of energy.

Ladies and Gentlemen, there is tremendous potential for oil and gas development in Canada’s Northwest Territories.  With it comes an opportunity to position Canada’s North to further contribute significantly to our nation’s economy; and tremendous returns for those who choose to partner with us and invest in our future.

The Northwest Territories is home to just over 44,000 residents who live in 33 communities, spread out over more than 1.3 million square kilometres. We are a unique jurisdiction where Indigenous and non-Indigenous people live, work and govern together in the same communities and where over half of our population identifies as being First Nations, Inuit or Métis.  The result of this combination of Indigenous and non-Indigenous people living and working together is a public government where actions and decisions are informed by and include northern Indigenous views and priorities from the outset.  Those of you who are familiar with our region will know that what we lack in people, we make up for with our resilience and abundant natural resources.

A large part of our territory’s modern history can be linked to resource development dating back to the 1920s with the discovery of oil in the Sahtu region. Our economy is still heavily reliant on resource development with mining, oil and gas accounting for more than 25 percent of our GDP.

Today the primary driver of our economy is diamond mining. We are the third largest producer of diamonds by value in the world. There is a renewed interest in gold, base metals, technology metals and rare earth minerals.

Diamonds have helped to establish our territory as a world leader in ice road technology and cold weather construction.  Our government has been recognized globally for the socially and environmentally-conscious management of our mining sector; and our partnership with Indigenous governments has set a new bar, in Canada, for meaningful participation, decision making and resource revenue sharing.

So, why am I talking about mining at an LNG conference?

I want to emphasize the point that we are ready to build on our experience and success – and to apply what we have learned from our mining experience to our proven oil and gas potential.

Our natural resource wealth is not limited to minerals.  We also have some of the world’s largest reserves of natural gas and oil, both onshore and offshore.

Norman Wells is home to Canada’s longest operating oil field. There is unconventional shale oil and gas in the Sahtu region but it is currently not economic without highway infrastructure. In the Liard region that borders Alberta, there is pipeline infrastructure but no real market for our product.  And on the Arctic coast, we have incredible, proven reserves of Arctic natural gas – once destined to flow south through the proposed Mackenzie Valley pipeline --- a project that is not viable at the current market price of North American natural gas.

You can see the challenge - the NWT’s petroleum resources sector has long been on the verge of becoming a powerful economic driver.  

With limited infrastructure, resource development in the North can be more difficult.

However, we are working with the federal government to address the infrastructure deficit that exists in our territory.  Continuing to make strategic investments in infrastructure to support responsible development is one way our government is promoting economic growth and prosperity for all residents.

We are advancing key infrastructure projects across the NWT, which include the Tłı̨chǫ All-season Road, Mackenzie Valley Highway, Slave Geological Province Access Corridor, and Taltson Hydro Expansion Project.

But, if we are going to get our petroleum resources to market, it’s time to change the way we look at traditional infrastructure like pipelines. Its time to chart a new direction to get our gas to market – both figuratively and literally.

The shale boom has flooded the North American gas market – and a pipeline route South is not currently viable therefore we are looking in a new direction - West from the Arctic Coast to Asia.  

From the delta of the Mackenzie River, it is just over 3800 nautical miles through the Beaufort Sea and Bearing Strait to Tokyo.  By comparison it is 4300 nautical miles from Vancouver to Tokyo; and well over 5100 nautical miles from the Yamal Peninsula to Tokyo.

We could deliver to the Asia-Pacific market billions of tons of LNG two days earlier - and without the challenges of laying thousands of kilometres of pipe.

Supporting our case - LNG is being sold in the Asia-Pacific region at six-or-seven-times North American prices - and consensus research tells us the demand will continue to grow until at least 2050. 

Ships are the pipelines of our future.  In fact, new ice-breaking LNG tankers are already safely running at full capacity from Yamal to Tokyo.

Floating LNG docking and processing facilities are also already in use. They offer the means to transport our gas onto ships--and do not require the same large capital investment as traditional onshore pipeline projects. 

While many continue to debate over how to get gas to tidewater with huge pipelines, the MacKenzie River Delta offers an ideal source point to ship LNG West.

And, when you consider the enormous cost of remote pipeline construction, this fact alone is a game-changer.

To achieve this and realize our vision will require strong partnerships with key stakeholders, including the federal government, Indigenous organizations, and industry.

But here again, I believe our territory is in a strong position.

In the North, perhaps more than anywhere, we understand the relationship between resource development and socio-economic wellbeing. 

The Mackenzie Delta is a region with potential  — and ultimately can be Canada’s first highway to the Arctic coast without crossing other jurisdictions. The region has active Indigenous businesses with experience in oil and gas, and a history of working with industry to get things done. That’s a stark contrast to what companies must often navigate in other jurisdictions.

Ladies and gentlemen, I will conclude today by highlighting that the export market is not our only focus when it comes to our natural gas resources. 

We also see an opportunity for this gas to be developed locally to reduce the cost of living, displace diesel for a cleaner environment, and create good long-term jobs.

In this regard, our government also has a broader role to play. As we adapt to the realities of climate change, the transition to a strong, healthy economy - less reliant on fossil fuels - will benefit all residents and communities.

Secure and sustainable sources of energy will create a more prosperous territory for everyone.

As we advance and define our approach to climate change, the development of our territory’s natural gas resources offers a means to reduce our use of fossil fuels, reduce greenhouse gas emissions, and realize greater energy security – all while providing economic benefits and opportunities.

Our natural gas resources are second-to-none — and there are likely trillions more cubic feet to be found.

We are reliant on investments from both the federal government and industry to move our resource projects forward.

We’re looking for partners that can help us get our gas to markets that need it, serve our local populations, and revolutionize our territory’s economy.

Now is the time to join us — to act boldly and to capitalize on this extraordinary opportunity. Market conditions, our changing Arctic, and advancing technologies mean that with the right partners, our gas can play an important role in global energy.

Not 30 years from now, but in the very near future.

Thank You