Canada, U.S. Look North to Meet Energy Demands

MONTREAL, Quebec, Canada, December 26, 2000 (ENS) - North America's rising energy demands and soaring natural gas prices could send U.S. corporations and the Canadian government north to Nunavut's trillion dollar gas supply.

Nunavut means "our land" in Inuktitut, the language of the native Inuit. Established as a territory in April 1999, it accounts for 1.9 million square kilometers, nearly one fifth the size of Canada.

"The figure we like to give is that Nunavut sits on $1 trillion of oil and gas," said geologist Benoit Beauchamp of the Geological Survey of Canada. "It sits on great reserves and there’s a market which is going to get them." The Middle East has enough oil to meet the world’s needs, but an increasing demand for natural gas in North America is expected to send companies north to Nunavut.

Gas consumption is forecast to rise by 33 percent in North America, according to Beauchamp. "So they have to find this gas somewhere," he added.

That somewhere may well be in Nunavut’s high Arctic where there’s already proof that large gas reserves exist.

In the 1970s and 80s, for every six wells drilled in the Sverdrup Basin - an area marked by small islands, lying southwest of Ellesmere and Axel Heiberg islands - one promising discovery was made. There were 19 major gas and oil discoveries altogether in the Sverdrup Basin.

"It tells you there’s a lot more," Beauchamp said.

The Arctic Islands are thought to contain 10 per cent of Canada’s remaining crude oil reserves and 23 per cent of its gas reserves, but until now, the market wasn’t strong enough for companies to pay the high cost of development.

The remoteness of Nunavut's high Arctic makes reaching its oil and gas reserves difficult. (Photo courtesy Nunavut Government) Beauchamp said there are few undeveloped gas reserves left in North America. Many other gas rich regions have been drilled "like swiss cheese," while only a relatively small pool of easily accessible reserves remains. Gas is increasingly in demand, because many coal burning electric generators have converted to gas which, unlike coal, burns cleanly and creates little pollution.

The only problem with the high Arctic gas reserves is their remoteness. That shortcoming could be overcome by a gas pipeline from the Beaufort Sea to Alberta. Such a connection, said Beauchamp, would make building another easier.

If global warming continues, the expected ice free Northwest Passage could spur even more interest in the high Arctic’s gas resources.

The first step towards opening up the Sverdrup Basin has already been made. Canada's Department of Northern Development and Indian Affairs sent out a call to companies interested in oil and gas exploration rights in the basin earlier this month.

Nunavut’s minister of sustainable development, Olayuk Akesuk, heralds the move as "the start of a new era of exploration," while Nunavut Tunngavik’s vice-president James Eetoolook said NTI supports the development of Nunavut’s petroleum resources.

Nunavut Tunngavik Inc. (NTI) is legislated to work with the Canadian government, the government of the Northwest Territories, and other agencies on issues critical to Nunavut.

Under the Nunavut land claim agreement, Inuit are to have a role in resource development, which will have to respect the environment and the values of Inuit, and to offer lasting benefits.

Beauchamp would not be surprised if an American company answers the call for more exploration. "We still call the shots and define the environmental rules, but the reason the U.S. wanted the North American Free Trade Agreement wasn’t for our maple syrup, but for our very rich resources," Beauchamp said.

Beauchamp believes Canadians are losing the edge in energy self sufficiency. He said the end of the Cold War and lack of interest in sovereignty has caused Canadian research and development in the North to hit "rock bottom."

That’s why the Geological Survey of Canada and its partners, which include NTI, want to start a "Northern Basins Initiative" to study the Norths’s immense geological potential.

Beauchamp said increased research will directly help the people of Nunavut because rich gas and oil deposits have the potential to meet Nunavut’s energy needs.

Published in cooperation with Nunatsiaq News: http://www.nunatsiaq.com/nunavut/index.html

-- Martin Thompson (mthom1927@aol.com), December 26, 2000