Higher oil and gas prices drive up revenues

the next half century.

So far, the project has employed more than 5o Inuvialuit beneficiaries and eight Gwich’in beneficiaries, bringing $7 million in local business to the area.

Moratorium causes frustration

Inuvialuit Regional Corporation President Duane Ningaqsiq Smith expressed frustration in January over the federal government’s extension of a moratorium on oil and gas exploration in the western Arctic Ocean.

Ottawa prolonged the 2016 order in December. Included in the moratorium is a 2019 decision to bar any oil and gas offshore work in the western Arctic Ocean.

Smith said the IRC was not consulted on the decision and the federal government is undermining Inuvialuit “efforts to enhance sovereignty and security in our region.”

“On behalf of the Inuvialuit, we are discouraged by the federal government’s arbitrary decision to extend the moratorium on oil and gas development in Canada’s Arctic waters, without meaningful consultation,” he stated. “This is a setback to the Inuvialuit Settlement Region, who are in need of new economic opportunities. Our livelihoods are impacted, and it is unacceptable this decision has been made without exploring alternative ways to bring jobs, growth and energy security to Canada’s North. This decision undermines ongoing efforts to enhance sovereignty and security in our region and will have a lasting impact on the strides Inuvialuit have made in these key areas.

“For thousands of years the Inuvialuit have been conscientious and sustainable stewards of our land and water. If the federal government truly respects Indigenous sovereignty and self-determination, they would explore opportunities along with us that are mutually beneficial.”

A month later, energy analyst Doug Matthews told Inuvik Drum that he was pessimistic about a resurgence in offshore oil and gas activity in the Beaufort Delta, which experienced a boom in the 1970s and ’80s. Matthews said there’s a low probability of oil prices remaining buoyant for long enough to justify the high cost of offshore drilling in Arctic waters.

“Offshore exploration projects can take more than 15 years to reach production so the important number is the best estimate of oil prices in 15 years, not today,” he said.

A spokesperson with the Canadian Energy Regulator said the Government of Canada’s most likely projection — called the Evolving Policies scenario — has Canadian oil demand peaking by 2032 and declining from there.

Higher commodity prices showed that there was still some oil and gas revenue in the tank in the NWT in 2022.

The value of petroleum production rose substantially in the territory last year. Oil brought in $274 million, a 53.1 per cent hike over $179 million in 2021 and the greatest value since 2014’s $406 million.

Natural gas produced in the territory was worth $36.6 million in 2022, a 64.9 per cent improvement from $22.2 million a year earlier and the most valuable year for natural gas since $50.1 million in 2008.

The volume of oil extracted in the NWT actually dropped year over year — to 321,000 cubic metres in 2022 (just over two million barrels) from 324,000 cubic metres in 2021 — but rising market prices spurred the substantial windfall.

Natural gas production rose modestly in 2022, hitting 62,000 cubic metres, better than the 58,000 cubic metres yielded in 2021.

Despite “steady output” between 2019 and 2022, NWT oil and gas production “remain well below what they once were,” the GNWT acknowledged in a report.

Growth in oil and gas in NWT doesn’t appear to be on the horizon either. No new wells were drilled, no seismic exploration work was done and no rights issuance processes were undertaken in 2022.

Nevertheless, the Department of Industry, Tourism and Investment distributed $1.1 million through the Mineral Development Strategy and Implementation Plan in 2021-21. Close to 30 organizations were approved, and the single largest amount, $300,000 went to the Inuvialuit Petroleum Corporation to help cover the cost of design and engineering work for the Inuvialuit Energy Security Project.

Inuvialuit plan gains ground

Diesel, propane and other natural gas products could soon be sourced from the Beaufort Delta as the Inuvialuit Energy Security Project edges closer to reality.

With approval from the Canada Energy Regulator expected this summer, work on reopening the 3,000-metre deep TUK M-18 well and preparing the site for extraction and refining could begin later this year. The Inuvialuit Regional Corporation also gets a final say on each step of the project before it proceeds. Officials are hoping to have the site, which lies about 20 km south of Tuktoyaktuk, active by 2025. The well could cover much of the Beaufort Delta’s fossil fuel needs for