Canada urged to invest $100 million to support Arctic development

A report by a Canadian federally appointed committee says the country must invest at least $100 million (Can.) in seed money to support Arctic resource development. The funds would be in addition to any financial support that Ottawa might provide for Arctic pipeline development.


By an OGJ Online Correspondent

CALGARY, June 4 -- A Canadian federal committee has recommended the country invest at least $100 million (Can.) in seed money to support Arctic resource development.

The National Round Table on the Environment and the Economy says the money is needed to improve the regulatory regime, allow aboriginal participation, improve the investment climate, and assess the effect of development on the environment.

The funds would be in addition to any financial support that Ottawa might provide for Arctic pipeline development. Aboriginal groups are reported to be negotiating financial support for equity participation of up to one-third in a Mackenzie Valley natural gas pipeline.

Producer groups in the Mackenzie Delta are studying feasibility of a line to move 6 tcf of proven reserves to southern markets. They are expected to make a decision by yearend.

David McGuinty, executive director of the study group, said without strategic federal investment in development, the oil and gas industry has made it clear economic development would be compromised.

McGuinty said existing regulatory bodies and standards in the Arctic cannot meet the influx and speed of investment to be triggered by pipeline development.

Various agencies with jurisdiction in the Arctic, from the federal government to aboriginal groups and the Northwest Territories (NWT) government, are currently working to streamline the regulatory process and hope to announce an agreement this summer.

The round table group was established 3 years ago to examine nonrenewable resource development in the NWT. It reports directly to Prime Minister Jean Chretien.

The report urged the government to quickly settle any outstanding land claims with native groups and proceed with the devolution of powers to territorial and aboriginal governments, because those issues could delay the development process. It also said Canada should use a more generous infrastructure funding formula for the Arctic that does not penalize the region because of its sparse population.

It said a pipeline would provide $1 billion/year in economic activity during construction, and direct and indirect spending on field development of $1.1 billion over 4 years, providing 2,540 full-time jobs.

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