NWT bracing for economic boom

If an emerging oil deposit in the Northwest Territories winds up being as massive as many expect it to be, a local politician says it's going to take a lot of planning to make sure government services and regulatory oversight keep up with the resulting economic boom.

Norman Yakeleya, who represents the Sahtu region in the territorial legislature, likens what's going on in the area to corn kernels on a stove that's heating up.

"And then all of a sudden, bang, bang, pop, pop. Pretty soon you have an explosion of everything," he said.

"We've got to prepare for this and we've got to get our numbers right here."

The Sahtu area in the central Mackenzie Valley is home to the Canol shale formation, which some estimate could contain between two and three billion barrels of oil.

Last winter, the region got a small taste of some of the ripple effects an oil and gas boom could bring.

Hotel rooms in the communities of Norman Wells and Tulita were booked solid, there were long lineups at gas stations and stores were short on supplies, said Yakeleya.

At the time, only early-stage exploration work was going on in the area, where industry has spent close to $630 million on land.

Yaleleya was part of a Northwest Territories government delegation that visited Calgary last week to hear from regulators and industry about hydraulic fracturing, or fracking.

Fracking involves injecting water, sand and chemicals at high pressure underground to free oil and gas from rock. The practice has unleashed huge amounts of energy from shale formations throughout North America, but it's also drawn the ire of environmentalists concerned about its impact on water.

The Northwest Territories' trip included sessions with Alberta and British Columbia energy regulators as well as with the National Energy Board, which oversees oil and gas development in the North.

The group also visited a drilling operation west of Calgary operated by Husky Energy Inc., which plans this winter to evaluate two vertical wells it drilled a year earlier in the Sahtu, and a laboratory run by drilling company Trican Well Services Ltd.

Government officials have had meetings with environmental groups, too.

Yakeleya said he went into the NEB meeting with a lot of questions about how drilling will be regulated.

"If this proves to be a great shale oil play and companies want to be there for a long, long time then the National Energy Board needs to catch up to the ball and keep up with it," he said.

"We need to have people in the Northwest Territories. Specifically, they've got to be in the Sahtu region to ensure that the public safety and concerns are taken seriously, and we mean by opening up an office in the Sahtu."

Remote aboriginal communities in the North have long struggles with unemployment, and oil and gas development could deliver a much-needed economic boost.