Devolution bill paves the way for a revived Mackenzie Valley pipeline
By James Munson | Dec 4, 2013 7:41 am |
The Northwest Territories will win the power to regulate onshore oil and gas pipelines in a bill presented to Parliament on Tuesday, giving new life to the defunct dream of a Mackenzie Valley pipeline.
Bill C-15, the Northwest Territories Devolution Act, will allow the territorial government to begin collecting royalties on mining, forestry and onshore oil and gas projects if turned into law.
The bill will rewrite the territory’s foundational act, known as the Northwest Territories Act, and include a new section that transfers the power to regulate oil and gas pipelines from the federal to the territorial government as long as they remain onshore.
While a natural gas pipeline from the Beaufort Sea to Alberta received approval in 2011 from the National Energy Board after decades of uncertainty, a shale oil exploration boom in the territory’s southern Sahtu region — as well as Alberta oil products currently locked in by opposition to pipelines through B.C. — could become a source for an oil pipeline heading north to the Arctic coast.
Premier Bob McLeod, who was visiting Ottawa Tuesday to see the bill’s launch, included the Mackenzie Valley pipeline as one of the major economic projects that would be enabled by C-15.
“By 2020, our GDP will double,” said McLeod, sitting in the offices of the Earsncliffe Strategy Group. “There will be nine mines in construction or operating. We expect that the Sahtu oil and gas play will be in operation and we still expect the Mackenzie Valley pipeline to go ahead.”
The bill is expected to bring the territory $65 million in royalties annually starting five years from the day the bill comes into force, said McLeod.
It won’t change the territorial financial transfer — the $1.1-billion economic lifeline Ottawa sends to Yellowknife each year to keep public services humming, he said.While the act would make Northwest Territories more like a province because it would begin to receive royalties, it would be significantly different for two reasons. The territory will only collect 50 per cent of the resource royalties and will be capped once the total amount reaches five per cent of the territorial government’s gross expenditures, said McLeod.
Superboard
Aside from the devolution of these powers to the territory, the bill’s features a second historic pillar — the creation of a pan-territorial regulator for industrial projects. It’s a significant reform given the current patchwork of land and water boards set up by the various First Nations and Inuvialuit governments in the territory.
But the so-called ‘superboard’ — as it’s been nicknamed — won’t completely resolve the multi-jurisditional nature of resource regulation in the Northest Territories and the hindrance it creates to investment.
Some of the regional land and water boards will continue to exist. To bring First Nations onside, the superboard will feature regional panels that will take input during a project’s review.
The Northwest Territories also faces a unique problem in that it has First Nations that signed numbered treaties with Ottawa during the early part of the 20th century and others who have modern land claims. The issue is that the territorial devolution process — of which the superboard is indirectly a part — requires finalized land claims for it to work properly.
As long as those First Nations are not clear on their legal situation, they are reticent to sign onto devolution and the superboard, said McLeod.
“When we meet with them to ask them why won’t they sign on, they say we can’t sign onto devolution because the whole premise of devolution is based on land claims and modern treaties,” he said. “They don’t agree with the written premise of the (numbered) treaties. They say their elders told them they didn’t give up any land.”
The federal government performed the consultation for the creation of the superboard, but McLeod expressed optimism that all First Nations and the Inuvialuit could be singing the same tune in five years when the provisions of C-15 come into play.
