Bob McLeod: Arctic Oil and Gas Symposium Keynote Address

March 17, 2017
Ministers' Statements and Speeches

Delivered on March 15, 2017

Good Morning. It is a pleasure to be back at the Arctic Oil and Gas Symposium to reconnect with many of you, and to forge new relationships.

The Government of the Northwest Territories is committed to creating a territory where all people can thrive, where a strong economy provides jobs and opportunities for all our communities, and where a well-managed environment contributes to our economic well-being and quality of life. In order for the Northwest Territories, and Canada’s North to thrive, we need to lay a foundation for success.

This is no easy task, but our government is committed to ensuring that future generations will have the opportunities to find well-paying, stable jobs that will allow them to achieve the quality of life they seek, and deserve.

There is no denying that the foundation of our economy is non-renewable resources. Making up nearly 30% of our GDP, and employing over 15% of our workforce, we rely on exploration and development to ensure a strong and stable economy that provides jobs and economic opportunities for the people of the Northwest Territories.

Since the economic downturn of 2008, the Northwest Territories has never fully recovered, leaving our oil and gas sector all but non-existent.  Many of us in this room are looking for a way forward that will help us prepare for future growth and development in the oil and gas sector. The truth of the matter is the oil and gas industry faces challenging times, times that many would say the industry can’t overcome.

But let me ask you this: is there an opportunity, at all, for future growth and development? We are faced with the implementation of a carbon pricing system that will make the exploration and development business-case harder to make. The Mackenzie Valley Pipeline deadline slated for sunset in 2022 is only a few short years away. A temporary shutdown of production in Norman Wells earlier this year reduces confidence in the industry’s future in the Northwest Territories.

Perhaps most significantly, the Federal government, without any meaningful consultation with Northerners, imposed a five-year moratorium on off-shore oil and gas, expecting that the well-paying jobs the oil and gas industry creates can be replaced by tourism and fishing. This is particularly concerning given the Federal governments focus on reconciliation with Indigenous people as the moratorium has very real and immediate consequences for the Inuvialuit and Gwich’in people of the Beaufort Delta.

So, is there a future for oil and gas in the Northwest Territories? It’s a valid question and a reality that we cannot ignore. We are faced with odds that a Vegas gambler might cringe at: low oil and natural gas prices, North American basin competition, changes to the liquefied natural gas market, cost pressures, increasing political and regulatory risk, and a global shift to renewable energy.

The challenges we are faced with paints a bleak image of the future of oil and gas, not only in the Northwest Territories, but in Canada and around the world.

However, there is one word that best describes Northerners, and that is resilient. People have lived in the North for thousands of years, adapting to the harsh realities and challenges they have been faced with.

It was not easy, but resilience helped people forge ahead and create the path they needed to not only survive but thrive and find success. As Premier of the Northwest Territories, I am inspired by the people of the North and  I am not ready or willing to give up on the prospect of a thriving oil and gas industry in Canada’s North.  The people of the Northwest Territories did not elect a quitter.

What we have is a vision, a sustainable economic vision that will help ensure Northerners have a strong, collective voice in ongoing discussions about the future of the North. Decisions about the North must be made by Northerners. We are not content to stand aside and let other governments or countries tell us how and when the North can be developed. We have lived there for thousands of years and have a direct stake in creating a strong and sustainable future according to Northern priorities and values.

A pan-territorial vision for territorial growth and sustainability based on shared principles will be an important way to ensure Northerners continue to play a rightful role in Northern decisions.

In January this year, I met with my counterparts in Nunavut and the Yukon to discuss future growth and development across Canada’s North, reaffirming our support for the resource industry, and commitment to a robust, sustainable economy in the North.

Out of those meetings, the Government of the Northwest Territories committed to leading the development of a Pan-Territorial Sustainable Development Strategy that will help ensure that Northerners have a strong collective voice in the ongoing discussions about the future of the North and play an integral role in shaping any decisions affecting the North and its people.

When I met with the Prime Minister late last Month, we were in agreement that we need to unlock the economic opportunities in the North. However, Canada needs a plan for sustainable growth and development in the North that will give Northerners the certainty that they can live and prosper now and into the future. We need a two-fold approach that is built in collaboration with Northerners to unlock our abundant natural resources to grow and sustain our economic future.

It is essential that the development of an Arctic Strategy begins with the full involvement of the territorial governments, and that we remain full partners in developing, approving and implementing Arctic priorities, whether they are an aspect of domestic or foreign policy.

Northerners need options now, and the decision to close off a significant avenue for potential economic development for the foreseeable future in offshore oil and gas development does not do much to instill confidence that the Federal government has an economic vision for Northerners.  A shared vision for territorial sustainability and development would help us plan for the kind of future Northerners want.

It would let us assess the opportunities in front of us, foresee global trends and then make deliberate choices about how to invest our time, money and effort on creating a future for our residents. 

In the context of the resource potential in the Northwest Territories, the future is bright. With over 16.2 trillion cubic feet of conventional natural gas and 1.2 billion barrels of oil already discovered, this likely represents a drop in the bucket of what resources are available across the 1.3 million square kilometres of the Northwest Territories. The Blue Fish and Canol shale deposits are estimated to have 191 billion barrels of oil in place. A fraction of this estimate would mean jobs and revenue.

The Liard Basin has an estimated marketable gas resource potential of 77 trillion cubic feet and could create thousands of jobs and billions in revenue.

In the depths of the Beaufort Sea rests 92 trillion cubic feet of natural gas, and 7 billion barrels of oil.

Indeed, the future is bright in this context. However, if we are to move forward from the current climate we face around non-renewable resource development, it will take the development of a vision for the North. The creation of this vision will require something I spoke about at last year’s symposium: innovation.

Certainty around land access comes with our government’s commitment to resolve outstanding land, resources and self-government agreements during the term of our government. Concluding these agreements and bringing increased certainty to land and resource management in the Northwest Territories will instil confidence in the industry that we can get things done.

Last night’s announcement at the Northern Night event on the significant progress made over the last year with the Acho Dene Koe First Nation, the Fort Liard Métis Local, the Government of Canada and the GNWT towards completing a lands, resources and self-government Final Agreement is an example of the innovation needed to leave the past behind and move forward to a future where our communities can thrive.  

Chief Harry Deneron was  involved in the establishment of the Aboriginal Pipeline Group, which, if the Mackenzie Valley Pipeline becomes a reality, will benefit  generations to come. He knows the value of participation in the Northwest Territories economy, and the benefit that responsible development will have on his community.

The Aboriginal government participation at the annual Mineral Round-up conference in Vancouver in January, and the show of support for the work our government is undertaking around resource development is an example of our commitment.

Our commitment to ensuring NWT Aboriginal people share in the benefits of development in the NWT is reflected in the agreement our government signed with its Aboriginal government partners at the time of devolution to share up to 25 percent of revenues from the development of resources on public lands. Settled land claims give Aboriginal governments the land and financial resources necessary for economic development.

Aboriginal people in the NWT are at the table, making decisions for themselves and the territory every day, and this approach is a model for the rest of Canada to look upon to find success as they move towards improving relationships with their Aboriginal communities.

With Devolution, we inherited a legislative regime from the Federal Government that wasn’t necessarily tailored to our economic realities or northern values.

Since then, our government has been hard at work re-writing this legislation to ensure we have made-in-the-North solutions.  The Oil and Gas Operations Act — a key piece of NWT oil and gas legislation — has areas where improvements can be made in this time of decreased industry activity. By taking this time to prepare for the sector’s revitalization, we can do our part to bring renewed interest, focus, and accessibility to oil and gas exploration in the Arctic.

The way forward will be unique Northern leadership and innovation. To address the important issues we face, Northerners must come together with big ideas and find solutions.

The Northwest Territories faces many challenges in unlocking our resource potential. We are prepared to realize this potential. The action we take now to create a vision for a sustainable economic future will prepare us for when the global markets begin to recover.  

If I had a crystal ball, what would I hope to see for oil and gas in the Northwest Territories in 20 years? Safe and responsible drilling in the Beaufort Sea, creating jobs and economic opportunity for the Gwich’in and Inuvialuit; responsible and sustainably developed oil and gas extraction in the Liard Basin where residents of the Dehcho have employment opportunities and resource royalties; and development of the Canol and Bluefish shale fields near Norman Wells and Tulita, meaning jobs and economic stability for residents of the Sahtu.

This hope will require our government to ensure we have a seat at the table with the Federal government when they review the offshore moratorium, that our government settles outstanding land claims so that certainty around development exists, and a simplified regulatory system, a made-in-the-North solution that will balance development with our environmental and social responsibilities. While our government needs to begin moving towards cleaner energy, like the Prime Minister said when he approved the Trans Mountain and Line 3 pipelines last year, our country is decades away from moving away from oil.

Despite the challenges we face, I am hopeful. We have a lot of work ahead of us, and look forward to having frank, open discussions about the future of oil and gas in the Northwest Territories. We are worth the long-term investment and look forward to seeing you back in the North.

Thank you.