Encana Horn River Gas play. Encana
Decades have been spent chasing the dream of Arctic gas, complete with a Mackenzie Valley pipeline to carry the fuel to markets. But a much more accessible Northwest Territories petroleum prize could lie within striking distance of existing pipelines.
A new study has found that the territory could be home to substantial shale gas supplies on its southwestern border with British Columbia.
On the B.C. side, the Horn River gas play has already attracted huge exploration budgets and attention from companies like Exxon Mobil Corp., EnCana Corp. and Apache Corp.
But virtually no one has explored for Horn River gas in the NWT.
The first systematic study of the NWT's shale potential suggests that the territory could be home to a motherlode of shale natural gas, its author said last month when the report was released.
The NWT portion of the Horn River resource has "got to be in the same kind of ballpark" as the B.C. side, says Brad Hayes, president of Petrel Robertson Consulting, who was hired by the territory to conduct the study. "There's a substantial area there."
But this area is also home to the Deh Cho First Nations, a native group opposed to petroleum development.
Ottawa controls resource development in the territory. Before companies can access land, the Minister of Indian and Northern Affairs must make a formal request for bids on exploration rights.
A bid hasn't been staged in 15 years, because the most promising area of shale gas in on land claimed by the Deh Cho.
The impasse has frustrated companies that are eager to extend their expertise into gas-rich land that remains largely untouched.
"There's all sorts of uncertainty there," says Rob Spitzer, Apache Corp.'s vice-president of exploration in Canada. "The regime is not in place."
Mr. Hayes sees developing the NWT shale resources as a good stepping stone for the territory.
"They've always had the big prize up at the far northern end of the pipe," he says, referring to the promise of offshore Arctic gas.
"But maybe [shale gas]gives them an opportunity to do it in stages and to only have to deal with, say, one first nation issue at a time, instead of trying to solve everything at once."
Nathan VanderKlippe