Natural gas potential
Study reveals it's sizable in south Mackenzie,

by Ralph Plath
Northern News Services

FORT SIMPSON (NOV 011/96) - Natural gas development in the southern Mackenzie Valley could have a large impact on the Deh Cho economy, says the Canadian Energy Research Institute.

A study released earlier this week by the independent non-profit think tank estimates total capital spending could range from between $57 million and $300 million from natural gas development.

Researchers say half of that money would probably remain in the NWT.

The study also revealed in one scenario, $34 million in territorial gross domestic product (GDP) and 543 person years of work are estimated to be created over a 12-year period. A person year is an individual worker who works full-time for one year.

Research institute vice-president Roland George said uncertainties such as gas resource potential and land availability will affect development.

"We would only know after drilling has been done," he said in a telephone interview from Calgary.

The study began last November to determine how natural gas exploration and development might unfold in the southwestern NWT and southeastern Yukon.

"We did a survey of producers last year and saw plans to do work in that area," George explained. "It's an evolving new trend."

Geological assessments and seismic activity in the region indicate high volumes of natural gas. Drilling activity, expected to take place this winter in the Fort Liard valley, will give a better outlook on potential.

Researchers used two scenarios to conduct the study because of the uncertainty of the region's gas resource and land available to explore.

The area studied runs between the Yukon border to Fort Providence and south to Fort Liard and Hay River.

The first scenario suggests industry activity will only take place within the existing Fort Liard area.

The second scenario sees other communities in the southern NWT becoming supportive of industry activity.

"Either the land is not ready or not available for use," George explained.

"But the increased availability of land results in progressively greater amounts of capital expenditure, employment and discovered natural gas," he said.

The scenario involving many communities sees territorial GDP increasing by $159 million and the creation of more than 2,700 person years of employment spread over 12 years. Researchers estimate about half of the potential GDP and employment would impact the North since significant numbers of skilled gas industry personnel would be required from outside the region.

Much of the spinoffs from natural gas development would impact the service industry such as transportation, accommodations and supplies, George said.

"Entrepreneurial skills will be a key success factor in development," he added.