How would you describe the state of oil and gas development in the Northwest Territories?Â
RAMSAY: We have an existing pipeline. It is running at about 25% capacity, running from Norman Wells to Alberta. We are at our infancy when it comes to oil and gas development. As I mentioned during my presentation, there was oil taken by tanker in Amalagak in 1984. We really believe that, going forward, we will be a key contributor to Canadaâ€™s GDP. We have great opportunities in front of us. It is important to work with industry and to realize our resource potential. OTC is important to us to get our message out there and talk to companies that are interested in investing in the Northwest Territories. We will continue to do that.
How will continued development of the oil and gas sector affect local economies in the Northwest Territories?
RAMSAY: We have seen some of this already. This was the second year of involvement for companies in the Mackenzie Valley. They have been employing local people, and employing local businesses to carry out this work. We have a 40km all-weather road that is built on the other side of the Mackenzie River, between Tulita and Norman Wells. That road project cost Husky Energy about $40m and employed many local people. One of the things we struggle with in the Northwest Territories is a high unemployment rate in our small aboriginal communities. Outside of Norman Wells and the other 4 communities, the unemployment rate is about 30-40%. Any opportunity for people to be working and employed through the development of shale oil is great. We hope to continue to see this happen. We have worked very closely with industry. We had a readiness session for the region last fall that was funded by the government of the Northwest Territories. It showed people what the opportunities would be during the coming drilling season. We will have another session this fall with community leaders and anyone that is interested in getting involved. This is something that we believe will continue. We will see further investment, and more seismic activity taking place in the area this season. With the advancement of Husky Energyâ€™s access road on the other side of the Mackenzie, along with Conocoâ€™s newly planned road, we will see the opening up of the entire area during other periods of the year. Currently, access is only available during the winter months when the ice road is in. With a 3-month window to move equipment, it becomes very complicated and problematic. We will be able to move equipment by barge on Great Slave Lake down the Mackenzie River, and taken in on the all weather roads. Husky Energy will be ready this fall. Conoco will be ready for construction of their road this winter. This will be a big change in the way business will be conducted there.
How do you see technological advancement directly impacting the Northwest Territoriesâ€™ economy?
RAMSAY: When it comes to hydraulic fracturing, governments have to make sure they are comfortable with the practice. I think technology will play a key role in the publicâ€™s comfort in how wells are horizontally drilled and fractured. We see the advancements as a good thing. Canada leads the way in advancements in fracturing. We had a lab tour with Husky Energy in Calgary where they were mixing cement. It is quite a technical process to horizontally drill and fracture a well. We do not have many people in the Northwest Territories, but when you are going to do something, you must make sure you do it right. The communities in the Central Mackenzie Valley have a large appetite for information. We have worked with the National Energy Board to get that information out. There is a myriad of information about fracking. Our best effort is to put the information on the table and let people decide for themselves if they support it. We believe they do. We have gone a long time without this type of opportunity. The Aboriginal leaders in the area want to see development move forward in a sustainable way. We believe we can see it done in a sustainable way. Jobs and opportunities will be there for the people. We are very hopeful that it will all work out.
What amount of resources do you estimate you have in these regions?
RAMSAY: The most compelling statistic is that there are a believed 90bn barrels of oil above the Arctic Circle. That should put things into perspective. That is why there is so much interest in the Arctic. We believe there are resources in the Arctic, in the Beaufort Sea, which can rival the Gulf of Mexico. That is in our backyard. We are anxious to see this develop in a safe sustainable manner. The National Energy Board has come up with requirements that will allow that to happen. We have not had an application put in by a company yet. While I am here in Houston, I am meeting with companies that have leases in the Beaufort Sea. There is $1.8bn in commitments in the Beaufort area. There will be an application to drill. It is only a matter of time. I believe companies can come up with an equivalency to a same season relief well. We have to remain optimistic that things will move forward. It does cost a tremendous amount of money to operate in that environment. We try to work closely with industry. I maintain close contact with the industry on what is going to happen out there. OTC is a perfect opportunity to touch base with companies that are involved in the Canadian Arctic, and also to sway others that aren't.
The most compelling statistic is that there are a believed 90bn barrels of oil above the Arctic Circle. That should put things into perspective. That is why there is so much interest in the Arctic. We believe there are resources in the Arctic, in the Beaufort Sea, which can rival the Gulf of Mexico.
How have you gone about incentivizing investors?
RAMSAY: We have just taken over responsibility to incentivize. It will not be fully implemented until April of 2014. At some point in time, we can look at various incentives and things like that. Today, we do not have that ability, but it is coming very soon. It will allow us to operate and maneuver, and make decisions on land, water, and resource management in the Northwest Territories. Those decisions currently rest with the federal government in Ottawa. Itâ€™s a really big change in how we do business, and we are looking forward to that added responsibility.