Northwest Territories Premier Bob McLeod is recognized in the House of Commons following question Period on Parliament Hill in Ottawa on Tuesday, January 27, 2015.Sean Kilpatrick/The Canadian Press
The government of the Northwest Territories is eyeing a new transportation corridor up the Mackenzie Valley to the Arctic Ocean with the aim of getting long-stranded resources to southern markets.
NWT Premier Bob McLeod said the northern territory has a $3-billion infrastructure deficit that is keeping resources locked in the ground and preventing economic development that would bring jobs and prosperity.
"Our resources are going untapped because we lack the roads, airports, sea ports and other infrastructure to bring them to market," Mr. McLeod said in a speech in Ottawa Thursday night.
"For years, we have seen our resource potential lie dormant and undeveloped, our business idle and economy stifled while we wait for the promised boom that is always coming but has yet to arrive."
In collaboration with aboriginal governments, he is launching a study of whether a northern energy, transportation and communication corridor would be viable.
"We know we need to find a way to get our resources to market and it is time for uis to take a serious look at the northern option," he said.
In an interview, Mr. McLeod acknowledged that the slump in energy and mineral prices will make it more difficult to attract investment for remote resource developments, but he said the territorial government is determined to be prepared for the inevitable upswing.
"The sense of loss opportunity – we're determined to fix it by being ready the next time around," he said. He added he is looking for partnership from the federal government and industry in determine the most cost efficient option to open up new trading routes.
With climate change shrinking the polar ice pack, Mr. McLeod said there will be a growing opportunity for shipping into Mackenzie Delta through the Beaufort Sea and Northwest Passage. But the sea lanes remains closed for much of the year and the cost of shipping resources through the polar seas could be prohibitive.
Many leaders in the Northwest Territories were frustrated by the failure of the long-proposed Mackenzie Valley pipeline that would have carried northern gas to southern markets. With the boom in shale gas production in the U.S., the economics of northern gas development have soured.
Some Alberta politicians have even posed the possibility of an Arctic-bound pipeline if plans to move crude to the west coast and east coast are defeated.
Oil companies are also rethinking their plans to explore in the deep-water of the Beaufort Sea. Chevron Corp. recently shelved its proposal, while a partnership between ExxonMobil Corp. and BP PLC is proceeding with plans to develop offshore leases. But they first have to persuade the National Energy Board that they can do so safely, and that they have a reasonable alternative to the board's relief-well requirement which makes drilling virtually impossible.
The premier is meeting with his provincial and territorial colleagues in the capital this week, and talks include the need for a national energy and infrastructure strategy.