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LLI GOLINE/NORMAN WELLS
When MGM Energy Inc. withdrew is applications for horizontal well drilling, the issue was timing, says a company spokesperson.

MGM Energy Ltd. disagreed with the timing of an environmental assessment recommendation by the Sahtu Land and Water Board. - photo courtesy of MGM Energy Corp.

"We don't disagree with having an environmental assessment. We just disagreed with the timing of the environmental assessment," said John Hogg, vice-president exploration and operations for MGM Energy Corp.

"We think the time for an environmental assessment is when you know you have a development, not when you are in the exploration phase."

On Oct. 4 the Sahtu Land and Water Board referred MGM's applications for a water licence and land use permit, which allow it to drill a horizontal well on its exploration licence 466, to an environmental assessment.

Paul Dixon, executive director of the Sahtu Land and Water Board, said the board made the recommendation based on reviewer comments of the application.

The board's staff report on the application cites concerns from the Tulita Dene Band Council, Sahtu Renewable Resource Councils, Aboriginal Affairs and Northern Development Canada, the Norman Wells Land Corporation, the National Energy Board and the Sahtu Renewable Resources Board as reasons to justify an environmental review on the process.

Dixon said 29 review agencies, a combination of territorial government, federal government and aboriginal organizations, looked at the application.

Hogg said MGM decided not to fund the environmental assessment because the company has little data on the project at this stage and is concerned about the lack of a definitive timeline for the process.

"I have no information to be able to work with the impact review board on what the ground water looks like because I don't have the data yet," said Hogg. "I have no information to work on fracking because I've never fracked a well in this (area) yet.

"The other challenge is that ... (the Mackenzie Valley Environmental Impact Review Board) have lots of procedures and processes but there's no timeline."

MGM plans to proceed with its vertical well drilling scheduled for this winter, as well as other exploration work, but expects this move to interrupt economic momentum for the region, since other companies submitting similar applications could also be looking at years of assessment, said Hogg.

The situation is one the NWT Chamber of Commerce is lobbying to fix.

"Where MGM is trying to work in the Sahtu, you've got limited windows to, one, get equipment up there, and, two, be able to stage the work to be done," said Hughie Graham, president of the NWT Chamber of Commerce. "If something was in dire need of definitive timelines, it's certainly a project like that."

Dixon said a new application from MGM in the future would be considered for "its individual merits" and would not be affected by the recommendations on the withdrawn application.

Hogg said MGM plans to submit another application once "enough data is collected" and a development plan is completed.

"It's far easier to do an environmental assessment when you know you've got a project and you know you can wait two years and do the right things, then ... you have a project," he said.

"We're happy to go to a hearing when the time is right."

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