Shale oil not guaranteed
Report of massive deposits useless without infrastructure: mayor
Karen K. Ho
Northern News Services
Saturday, May 30, 2015
LLI GOLINE/NORMAN WELLS
A new report says there's an incredible amount of shale oil in the Sahtu region, but local officials say businesses can't get excited unless there's additional investments in infrastructure.
A Husky Energy well pad in the Sahtu back in 2006. A new report estimated billions of barrels of oil in the region, but the Norman Wells mayor said a lack of infrastructure may result in the resource never being developed by companies like Husky and ConocoPhillips. - NNSL file photo
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"Without an all-season road, I'm not sure it'll ever be developed because the cost is so high," Norman Wells' Mayor Harold McGregor, who is also the general manager of the Sahtu business development centre. "That, in itself, is a massive project, perhaps too big for the GNWT on its own. They might need federal help."
Recently, an evaluation by the territorial government and the National Energy Board released on May 22 estimated 191-billion barrels of shale oil in two fields. It was the first evaluation of the Bluefish Shale and Canol Shale plays located around Tulita and Norman Wells for their potential. Industry, Tourism and Investment Minister David Ramsay called it "staggering" and Sahtu MLA Norman Yakeleya called the figures phenomenal.
But McGregor cautioned that the current global oversupply, low price per barrel as well as cost of necessary infrastructure all pose huge obstacles to the resource ever being developed, extracted and sold.
"It could sit there and not be developed for years," he said. "There's no way to get it to market and there's no market for it at the moment."
In regards to oil companies like Husky Energy, Imperial Oil, ConocoPhillips or Shell returning to the region, McGregor said he hasn't spoken to any yet, but he isn't optimistic they'll suddenly change course just based on that report.
The area also needs to agree on allowing fracking up there. McGregor said he's seen some opposition on social media, and on May 28 the Dene Nation issued a press release stating they would like a moratorium on fracking in the territory.
"I think that issue has to be settled to everyone's satisfaction," McGregor said, estimating it would take at least a year or two to satisfy everyone's questions.
- with files from Shane Magee
