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INUVIK
The announcement that Inuvik Gas and the Town of Inuvik are cancelling their franchise agreement has stirred confusion among town residents.

Inuvik Gas general manager Kevin MacKay said the company will try to negotiate a new energy contract with the Town of Inuvik after both parties issued a news release stating they are cancelling a franchise agreement in August 2014. - NNSL file photo

On Aug. 12, Inuvik Gas released a statement saying that both parties had served notice the agreement would end in August 2014.

Several councillors said last week the announcement was unclear and left some residents thinking the gas was going to be shut off to the town.

Councillor Clarence Wood said "there's a lot of confusion from all over town."

"I was confused by (the news release) as well," Coun. Melinda Gillis added.

Inuvik Gas general manager Kevin MacKay was quick to clarify the situation in an interview two days after the statement was issued.

He said the company will continue to negotiate a new agreement with the town, rather than simply re-signing the existing agreement.

That was because circumstances, namely the introduction of a new synthetic natural gas (SNG) system, were vastly different than when the franchise agreement was drafted, MacKay said.

Last winter, Inuvik Gas introduced a new synthetic natural gas (SNG) system as an alternative to the swiftly-depleting Ikhil natural gas field outside of Inuvik. The cost for heating nearly doubled under that scheme, causing controversy in town.

It's also bred frustration, since the Beaufort Delta Region has enormous reserves of untapped natural gas.

Due largely to current market conditions, both MacKay and town officials have repeatedly said there is no interest among the private sector in drilling new wells to serve the town.

"As the franchise agreement closes, both parties have to give notice on what their intention is for the franchise," MacKay said. "Both parties have served notice they will not renew the franchise agreement. So what happens now is that there are opportunities for us to meet with the town and we can start talking about what that means and what the future looks like.

"At this point I don't think it's good for me to talk about what the talks could be, but I think it's probably fairly obvious that each group wants to talk about the terms and conditions, for sure."

That means it's possible Inuvik Gas could still strike some type of deal with the town to continue to supply heating gas in some form to residents.

"That's right. We've got some meetings scheduled, hopefully very soon, but I know the mayor's out of town right now," MacKay said. "But I know the intention is to get together with them as soon as possible. I don't want to say it'll be next week, but hopefully very soon, and we'll start those talks.

"We are in business, and we're going to be around doing everything we do for this heating season," he added. "I hope people don't think there isn't going to be any gas for the heating season this year."

Inuvik Mayor Floyd Roland had been away for some time on vacation, but said in a telephone interview from the Yukon that the door hasn't been closed on possibly dealing with Inuvik Gas in the future.

The cancellation of the franchise agreement came after long consideration, Roland said. From his perspective, the town wasn't confident in renewing an agreement without taking a long look at its options.

One of those choices, he said, was to establish an Inuvik utility, which would make the town a direct player in any discussions of energy.

As it stands now, the town is more of a third-party partner in the chain, which doesn't give it access to all the information available in a timely fashion, Roland said.

The cancellation notice for the agreement, he added, represents Inuvik being pro-active in the process. It's now begun the process of looking at every possibility, including tapping into the liquid natural gas (LNG) supplier, being used by the NWT Power Corporation in town, on a trial basis.

Roland said LNG is less expensive then SNG, and at least for the short term, is a definite candidate for the town to consider.

It's that short-term period the town is working on addressing, he added, while other, more permanent, solutions are sought.

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