Questions and Answers | Resources and Energy Development Information

Petroleum Resources

The Northwest Territories has significant and varied petroleum resources, both discovered and probable. This section of questions explores how exploration and extraction is important to the NWT economy and how it affects you.

How much oil and gas is in the NWT?

The National Energy Board (NEB) estimates that the NWT could hold as much as 37 percent of Canada’s marketable light crude oil and 35 percent of its marketable natural gas.

Discovered and recoverable potential for the NWT onshore and offshore is estimated at 1.2 billion barrels (bbl) of conventional oil and 16.4 trillion cubic feet (Tcf) of conventional natural gas. Ultimate unconventional potential is estimated to be over five times that.

Did this answer your question? If not, you can click here to send us your question directly.

Where is oil and gas found in the NWT?

There are many confirmed oil and gas resources in the NWT, but historically, production has been centred in Norman Wells, Fort Liard and Cameron Hills.

For more information:

A map of oil and gas potential in the NWT: https://www.iti.gov.nt.ca/sites/iti/files/hydrocarbon_potential_landscap...

A summary of petroleum plays in the NWT: http://www.nwtgeoscience.ca/services/petroleum-play-summaries

Did this answer your question? If not, you can click here to send us your question directly.

What is the difference between oil, natural gas and aviation fuel?

Oil, or crude oil, is the raw product that is extracted to create petroleum and diesel for transportation, lubricants, plastics and numerous other commonly used products.

Aviation fuel is also produced from crude oil; it is a specialized fuel with unique properties that meet the needs of powering aircraft (e.g. ability to handle extreme temperatures).

Natural gas is a naturally occurring hydrocarbon gas mixture consisting of mostly methane, and is used as fuel for cooking, for heating homes and buildings, and running power generation facilities.

Did this answer your question? If not, you can click here to send us your question directly.

How does an oil and gas company make money?

Petroleum companies make money by selling oil and gas to industries, commercial companies and consumers. They sell at world market prices, which are set by supply and demand.

Before making a profit, petroleum companies invest time and money into finding the oil or gas, building pipelines or leasing railroad tanker cars or marine tanker ships to move it to refineries or gas plants. The oil or gas then needs to be processed into usable fuels such as gasoline, diesel, jet fuel, ship’s fuel, propane, Liquid Natural Gas (LNG), or other forms that can be used in modern vehicles, furnaces, electrical generating stations, aircraft or ships.

Did this answer your question? If not, you can click here to send us your question directly.

How does oil and gas get from the NWT to refineries?

Once oil and gas resources are taken from the ground, they are fed into pipelines, which hold and transport the resources, often over long distances, to facilities where they get refined. This is how products like gasoline for your car are eventually made.

Did this answer your question? If not, you can click here to send us your question directly.

What is the history of the Enbridge pipeline in Norman Wells?

The Norman Wells pipeline runs 750 km’s to Zama, AB, and was the first pipeline built through discontinuous permafrost. Designated Line 21 by Enbridge Pipelines (the owner and operator) it was completed in 1985 and built to ship as much as 50,000 barrels of oil per day. During its first eight years, the pipeline had moved more than 100 million barrels of oil. As production gradually declined, between 2007 and 2017, the pipeline shipped nearly 58 million barrels of oil.

Line 21 was shut down from January 2017 until September 2018 to replace a section of pipeline at the river crossing near Fort Simpson. Once that project was completed, the pipeline began operating again.

Did this answer your question? If not, you can click here to send us your question directly.

How is seismic surveying used in the oil and gas industry?

Seismic surveying is a commonly used technique in petroleum exploration to find underground rock formations or reservoirs containing oil and gas. A survey uses sound waves generated at the surface and directed underground. Special sound recording devices at the surface collect and measure the waves as they reflect back to the surface. Different rock types and liquids reflect the waves at different speeds, which can give information about what can be found in the ground. All of the data collected is analyzed with computer programs that create images based on the reflected sound waves.

Did this answer your question? If not, you can click here to send us your question directly.

If we have so much oil and gas in the NWT, why is it so expensive to heat my home?

There is no petroleum currently produced in the NWT for use by consumers within the territory. Oil produced at Norman Wells is shipped by pipeline to southern Canada, and the propane produced as a side product is used to help produce the oil. For heat and electricity, Norman Wells now uses wood pellets, propane or diesel, all shipped by winter road or by barge in summer.

Natural gas produced at Ikhil, 50 kilometers from Inuvik, was formerly used for heat and electricity in the community, but there is now only enough gas remaining to use as back up. Inuvik uses Liquefied Natural Gas (LNG) that is shipped in tanker trucks from Burnaby, BC and Elmworth, Alberta.

Shipping fuel by truck and barge has significant costs, and is especially expensive for communities not connected to a road.

Why is Inuvik trucking liquid natural gas from BC or Alberta?

In 1999, Inuvik began to use natural gas available from two gas wells at Ikhil, 50 kilometres from Inuvik, to replace the diesel fuel burned to produce electricity and heat for all houses and other buildings.

The natural gas was nearly depleted by 2012, so Inuvik went back to using diesel until 2013 when Liquid Natural Gas (LNG) storage infrastructure was completed. LNG is trucked from BC or Alberta and can be stored to cover freeze-up and break-up periods when trucks cannot reach the town.

Did this answer your question? If not, you can click here to send us your question directly.

Who is responsible for ensuring petroleum companies follow the rules?

As with other provinces and territories, the GNWT, the Government of Canada, and Indigenous governments all play a part in making sure companies follow the rules and the NWT’s natural resources are well-governed.

Under this arrangement, for some activities, lands, water, and natural resources are governed by the GNWT, while other activities are governed by the Government of Canada and Indigenous governments. The GNWT can only make laws that govern those activities on NWT lands, and for those natural resources for which it is responsible.

The federal government holds jurisdiction on all offshore natural resources, including the petroleum in the Beaufort Sea. Since Devolution in 2014, the GNWT has had a role to play in governing onshore — meaning not in the ocean — lands and natural resources. There are some exceptions. For example, the Norman Wells oil field is a federally-governed site.

There are also various land claim and other agreements with Indigenous governments which grant these governments ownership over natural resources.

For detailed information on how the NWT’s oil and gas is managed, click here.

Did this answer your question? If not, you can click here to send us your question directly.