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The town that oil built
Mayor Gregor Harold McGregor talks about the future of Norman Wells

Chris Puglia
Northern News Services
Published Monday, May 13, 2013

In the 1920s, before gold and diamonds paved the NWT's road to resource riches, the Government of Canada's gaze turned northward, attracted by Imperial Oil's discovery of oil at Norman Wells.

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Mayor Gregor Harold McGregor is excited about Norman Wells' future should a shale gas play move forward. - Chris Puglia/NNSL photo

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Striking it rich

Potential impact on Norman Wells should oil gas activity reach projected potential:

  • Increased resident population of 200 and camp population of 1,000
  • Needed expansion of water plant to 400 litres per minute from 175 litres per minute
  • Eventual replacement of aging water plant: $21 million
  • Improved fire protection: Second water tank - $1.2 million; new fire truck - $500,000, new utility truck - $210,000; expansion of fire hall - $1.5 million
  • Lot development for 70 residential homes
  • Add 15 commercial lots
  • New road construction and lot development - $500,000
  • Street lights - $180,000
  • Utilidor extension - $2.7 million
  • Increase town staff by four or six
  • Additional staff housing - $1.3 million
  • Industrial park expansion - $800,000
  • Improvements to landfill - $2.3 million

Total cost - $31.9 million

Source: Town of Norman Wells

Nearly a century later the gold mines are gone, diamond mines are on the decline and once again, oil is poised to renew interest in the North.

At the heart of NWT oil country is Norman Wells, the first community established North of 60 not as a fur trading post but as a hub for non-renewable resource development. It was also the catalyst for the formation of the Canadian government's first Northern-based bureaucracy.

Ironically, the community which is called Lli Goline - where the oil is - by Dene who used oil seepages to waterproof canoes long before Europeans set foot in the area, Norman Wells finds itself struggling with an energy shortage. With present wells on the verge of drying up and new oil plays only in the exploration stage, it is the town's most pressing challenge and priority as it tries to position itself to capitalize on future development.

Although born from the nation's thirst for oil, Norman Wells has evolved over the years to become the central hub of the Sahtu region. While much of its projected future growth is weighed heavily in relationship to the outcome of recent record oil exploration - $630 million worth of leases purchased in 2012 - the construction of the new health centre and the estimated 40 jobs it could bring with it might be a more pressing consideration for Norman Well's leadership in the short term.

Six months ago, Gregor Harold McGregor, who is also the executive director of the Sahtu Business Development Centre, won his bid for election to become the present mayor of Norman Wells. News/North sat down with McGregor at the beginning of the month to learn more about what is being done to address many of the issues the community faces, not only in terms of future oil development and plans to replace the natural gas when Imperial Oil turns the taps off in 2014, but challenges with community housing, the lifting of alcohol restrictions and council's strategic direction moving forward.

News/North: "When you were elected mayor, what did you see as the most pressing issue facing Norman Wells as it looks to become a major centre for development in the NWT?"

McGregor: "The overriding issue was natural gas. If we didn't get that solved, we wouldn't be a development centre for much of anything. Working in that direction we're close, I think, to a memorandum of understanding." (Norman Wells is presently negotiating a deal with Dalkia Canada, a utilities and infrastructure management firm, to supply the community with alternative energy once natural gas is no longer available.) "What it's going to do in effect is offer residents and businesses one more choice for heating fuel for at least for the next two years. Then Dalkia should have a plan in place to replace the air propane mix they are going to use. "

N/N: "How would you characterize your energy situation right now?"

McGregor: "I wouldn't say it's a crisis, but the natural gas will be shut off by Imperial Oil, they are not even sure they can supply it until June 30, 2014. We either have an alternative source or people will have to convert their furnaces to oil and of course it's expensive to the homeowner, probably in the range of $15,000."

N/N: "The federal government has made substantial money in revenues from Norman Wells oil. Do you think it has a responsibility to put some of the money back into the community to help with your energy problem?"

McGregor: "I'd love to beat on them to get it, but I don't think we will. Seriously, you could spend a lot of time and effort on a fruitless endeavour. I think maybe it's time for us to say we're just responsible for ourselves and get it done. If Dalkia can come back with a viable, competitive option, I think that is the best route. "

N/N: "With such a small tax base, how do you plan to generate the revenue to build the infrastructure needed to change the utility system?"

McGregor: "We're not building it. It's a private utility company that's going to build it and finance it. We told the people as of June 30, 2014, we're out of the utility business. (Dalkia is) paying for it and they're collecting bills from the customer."

N/N: "When you look at the future growth of the community what, aside from energy, is of major concern?"

McGregor: "I think probably the biggest issue facing us right now is to have housing ready for the jobs that are going to be created with the new health centre. There is going to be more jobs caused by the oil exploration if they decide on production and that decision is, I think, four to five years away."

N/N: "When people think about Norman Wells these days they think oil and gas, but are you saying there are issues that are going to be pressing sooner than that development?"

McGregor: "That's right. They're talking between 28 and 42 jobs at the health centre. That's a lot for a town that has zero vacancy rate in rental units. We have some houses for sale but I am not sure the salaries that will be at the health centre, that all of them are going to necessarily be able to buy a home here. We're not in (the housing) business as a town and we're not going to be."

N/N: "What's the solution if the town is not in a position to provide housing and the GNWT has on more than one occasion stated it is no longer in the housing business?"

McGregor: "Developers. But, they don't want to rush into it. They don't want to have their units ready a year before anyone is hired at the health centre, same with oil exploration. They want to be ready, but they don't want to be ready too soon. We need timelines established by the oil companies and by the health centre. They're saying 2016 the health centre should be up and running."

N/N: "Forty jobs. Obviously, they all won't be coming from Norman Wells. A lot of them will be coming into town."

McGregor: "I am thinking most of them will come in, especially the professionals. There are no professionals here who are not working and very, very few residents."

N/N: "What does that kind of influx of population do to a community of this size?"

McGregor: "It's like 1,000 people coming into Yellowknife. It's huge."

N/N: "How do you address that kind of pressure and whose role is it to address the needs for improved services and infrastructure? Is it the sole responsibility of the town? Or, do you see a role for the federal government and the GNWT?"

McGregor: "I don't think we will get very far with the federal government, maybe some help with infrastructure. But, I think, the GNWT has washed their hands of getting back into the housing business. Probably wise. We don't do it. So, I would like to see local businesses team up or do whatever they have to do to have the capacity to build. If necessary outside developers, but it would be nice to have businesses here do it."

N/N: "Do you have the land to do that?"

McGregor: "We do. We have enough to get started at least. We have land big enough right now, zoned properly and everything, for a couple 16-unit apartments. We can create and zone more."

N/N: "What do you think the outlook is for oil and gas. Do you think the fracking issue is going to be a barrier to that development moving forward?" (ConocoPhillips Canada, has applied to the Sahtu Land and Water Board (SLWB) for a water licence and land-use permit to drill two exploratory horizontal wells, which, if approved, will be fracked during the 2013-14 winter season.

Husky Energy also intends to file an application to drill four exploratory horizontal wells next winter, two of which the company intends to frack. However, the SLWB had not received an application from the company by April 26. In November, MGM Energy withdrew an application to drill an exploratory well because it was referred to an environmental assessment because it would require a horizontal frack.)

McGregor: "I think an environmental assessment order would be very damaging. I'd like to see them permitted through the exploration stage and the development stage perhaps and at the production stage then do the environmental assessment."

N/N: "What do you think the public appetite is here in Norman Wells for fracking?"

McGregor: "It's mixed. I would guess maybe 80 per cent are in favour, perhaps more. There is some attempt by outside interests to influence the decision."

N/N: "What do you mean by that?"

McGregor: "I think there are some groups out there who would like to see this stopped."

N/N: "Are you talking about environmental groups?"

McGregor: "I think so."

N/N: "Do you think that is warranted? Fracking has a reputation you could say."

McGregor: "Well, I don't know how bad the reputation is and we have a lot of land here and very few people, maybe this is a place to frack."

N/N: "How important is that development to the town?"

McGregor: "If we want to grow, it's very important. The Esso field is in decline, a rather steep decline and I think they are talking about 2026 for that to be depleted. That's not that long of a time. There is supposed to be huge amounts in the shale. That's why I will go back to letting them find it first and then start regulating."

N/N: "What have been some of the biggest changes you have seen in Norman Wells during your 16 years living here?"

McGregor: "This new oil exploration has been the biggest thing that has happened here. It could probably be the driving force of the whole NWT economy if it goes ahead."

N/N: Residents of Norman Wells petitioned the GNWT to hold a plebiscite on the community's liquor restrictions and 53 per cent of the community voted in favour of lifting the restrictions in 2011. Since that time, Sahtu MLA Norman Yakeleya has repeatedly commented on how the lifted restrictions have affected the region. Following two recent arrests where nearly 200 bottles of hard liquor were seized, Yakeleya said crime has been on the rise across the Sahtu and health workers are under increased pressure due to alcohol abuse.

N/N: "Norman Wells has the only liquor store in the region. Do you think because of that the town has a responsibility to the other communities?"

McGregor: "I don't know what responsibility we have. We did supervise the vote but that was because we were required to by legislation. We have the very same rules as the other four communities. Three or four of them have possession limits and you have to enforce them. If Yakeleya or the RCMP or whoever came to council with an honest workable solution, we would certainly do what we can."

N/N: "Have the comments Yakeleya has made to the media unfairly places the responsibility or blame for these problems on Norman Wells? The plebiscite wasn't a town plebiscite."

McGregor: "No it wasn't. Yakeleya has a point he is trying to make ... (the GNWT) created the rules for the plebiscite. A petition was started and got enough names that a plebiscite was held and the town voted by majority. The government had no choice once the vote took place. Placing blame never helps. If someone has a solution that works, of course we'll help. I don't think putting a restriction back in place will help."

N/N: "There is always a lot of debate about what the problem is. Is it the alcohol?"

McGregor: "Alcohol is a symptom of the problem. Alcohol is a problem everywhere and it's much greater in the Northwest Territories. I sure don't have all the answers. I don't know if anyone does."

N/N: "When you go down south and talk to people about Norman Wells and its prospects for the future, what do you tell them?"

McGregor: "Well, I have always loved it since I came here. I came here to stay a year and I have been here 16 years. I don't even go out on vacation anymore. I spend my vacations here on the river. But since I have been mayor, I tell them if the shale oil play goes ahead ... and this is (Industry, Trade and Investment Minister) David Ramsay's quote and I am just using it, we will be the second-largest community in the Northwest Territories. That's exciting. Some people have qualms about it, but I think it will be a good thing. We will have more infrastructure, more money to spend for our youth and seniors."

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