Beaufort and Sahtu Development Go Offline: What Now?

The Beaufort: closed for business | Photo Dan Slavik – WWF Canada

To say that the NWT government’s longstanding pipe-dream of opening up the Sahtu and Beaufort regions to oil production is on hold might be putting it charitably — the dream is probably in full-fledged ruins.

With Imperial Oil and BP’s decision to punt their offshore drilling plans, and Sahtu development essentially at a standstill, the GNWT’s favoured magic economic bullet is looking less and less accurate all the time.

Meanwhile, with the notable exception of Gahcho Kué, mining continues to struggle.

To no small number of people, all this — especially on the oil front — is good news. To them, the environmental impacts of resource development outweigh the benefits of employment, taxes and royalties.

Those impacts are not small-fry, particularly in the NWT, where people still use the land and water as a direct source of food. The impact of fracking on groundwater is generally not great, and the ability to prevent and/or clean up oil spill in Arctic waters is a nut the oil industry has yet to crack to many people’s satisfaction. Roads are a major disruptor of wildlife. And of course there is the small matter of climate change, for which the best solution is to leave as much of that oil and gas in the ground as possible.


What’s going to pay the bills?

On the other hand, there is a response to this perspective that ranges from the unhinged (“Get a job, hippies!”) to the reasoned question: how do territorial governments expect to pay for the services residents expect without some form of resource extraction? Setting aside the frothing vitriol of comment board trolls, there is a legitimate issue here.

If the NWT were to forego resource development, what replaces it as an economic driver? Mining is more than a third of the NWT economy, and while few people are against mining altogether, the scarcity of available capital, and continued displeasure with the regulatory regime by the mining industry, mean the sector is in decline.

Meanwhile, those 200 billion barrels of shale oil in the Mackenzie Valley remain tempting economic fruit. The linked Globe and Mail story helps illustrate the dispute nicely. Says Greenpeace’s Keith Stewart: “It would be a huge mistake to invest billions in expensive and risky fracking projects when we have so many better ways to create jobs and meet our energy needs without contaminating drinking water or accelerating global warming.”

Says Dave Ramsay, essentially: “Nah, it’s fine.”

Or witness this Twitter exchange between Liberal nomination candidate Kieron Testart and Batiste Foisy:


Those all sound like good ideas, even if they are vaguely platitudinous. But are green R&D and manufacturing really going to save the NWT’s economy?

There probably are better ways to create jobs than drilling for oil, and that will become even more true as we move toward a post-oil economy. But many of the options available to a place like, say, Alberta, aren’t options here.

We need to debate

Alberta has a manufacturing base, a surplus of skilled labour and supply chain-links that make transitioning to a greener economy easier than a lot of people might think. The NWT has little of that infrastructure in place. There’s never been much in the way of manufacturing. And there’s no university to underpin a major R&D industry, even if there’s the opportunity for spot projects here and there.

It is true that consumer savings from cheaper, greener energy would have a knock-on effect on the economy. Even still, it’s hard to recreate the GDP infusion of plentiful oil, even though some people have already begun the work of trying to figure out a way.

This is, you might argue, a fundamental design flaw of the sort of industrial capitalism (most of) our governments would like to see take hold in the North. But in the case of the federal government, its desire for resource development has been constrained by its refusal to fund much of the infrastructure required for that development to actually happen.

Devolution was essentially about greasing the skids for more resource extraction. Changing course now, as the oil and gas industry goes through massive, potentially irreversible change, is possible, maybe even advisable. But passing over a massive pool of potential wealth, in a region with few choices for economic growth or even stability, comes with risks of its own. Sounds like a good debate to have come election time.


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