Norman Wells (Sep 11/06) - Imperial Oil's natural gas turbines can no longer supply all of the power Norman Wells needs and the town will resort to burning more expensive diesel duel this winter to keep the juice flowing.

The company's oil and gas field here has been in decline for sometime, but town Coun. Frank Pope said residents and council were caught off guard by how quickly the situation has grown serious.

Starting this winter, Norman Wells will likely have to go back to diesel-generated power because of shrinking natural gas reserves. - photo courtesy of Glen Guthrie There are 368 residential customers of the Northwest Territories Power Corp. in Norman Wells. The corporation has another 155 commercial customers in town. After the first 700 kilo-watt hours of usage, residential customers in Norman Wells pay 30.84 cents per kWh, the lowest rate in the Sahtu. Deline is a distant second at 57.86 cents per kWh.

"We were a little tardy getting on to this - say by a couple of years," he said. "The natural gas in Imperial's field is running out and we need the Mackenzie pipeline to replenish our supply."

In fact Imperial has been cautioning the town to start conserving natural gas since the mid-1990s, said company spokesperson Hart Searle, adding the issue is an important one for Imperial as it employs about 60 people in Norman Wells.

During the same time, economic activity in the Sahtu community has increased dramatically.

"There's no surprise here for the town," he said. "Increasing demand is up against decreasing supply."

When the temperature drops to -40C and below, home heating and power generation needs spike in the community, putting it over its allotment for gas provided by Imperial.

"We've got a fairly critical situation here, but all parties are working to resolve it," said Pope. "We don't need a lot, just a steady supply."

While a number of alternative energy sources ranging from propane to wind generation are being discussed, the leading solution is currently an NWT Power Corp. offer to fire up its diesel generators - including a newly-installed 1,400 kW unit recently relocated from Tuktoyaktuk - on the coldest days to meet electricity needs.

"We've agreed to do it for this winter," said Leon Courneya, Power Corp. president and chief executive officer. "We'll see what happens after that."

The details of the plan are still being worked out, but he said the scheme would have amounted to about 18 days of diesel power if it had happened last winter.

"(Diesel power) would kick in at about -35C or -36C," said Norman Wells Mayor Anne Marie Tout.

With the corporation picking up the slack on the electricity front, Courneya and Tout said that would save the town enough gas to be able to ensure the supply for heating needs.

"There would be no immediate impact on electricity rates in Norman Wells," said Courneya, adding if the cost proved too high, a rate rider would be used later to help cover the bill.

"It's too early to say what that might be ... but I don't think it would be as high as one cent."

For Pope, the real cost would be to the environment if the town is forced to use diesel much beyond a few days this winter.

"It's very disheartening," he said. "Especially with all the natural gas we've got in the North."

Provisions in the Mackenzie Gas Project would allow communities to access pipeline gas , but Searle said that's not going to help Norman Wells anytime soon. "Yes that would be another gas supply ... but it's not a certainty," he said.

Long-term if the pipeline mega-project doesn't move forward, Pope said the town will need to look to other power sources, such as a smaller-scale line tapping into gas from Colville Lake to meet its needs.

"Even if the pipeline never happened ... I don't think we'd be another Pine Point," he said.