LNG needs to stay local to best service Beaufort

by Eric Bowling
June 25, 2020

Originally published on NNSL Media

This week we cover a plan by the Inuvialuit Regional Corporation to activate the long-dormant TUK-18 natural gas well and use it to produce Liquefied Natural Gas as a replacement for diesel, which could significantly reduce the greenhouse gas emissions for the area.

In partnership with Ferus NGF, a company with offices in both Houston, Texas and Calgary, Alta., the project is presented as a means to bring more and better paying jobs to the region through training opportunities to both operate the well and the plant, as well as by trucking the LNG to customers —Inuvik and Tuktoyaktuk to start.

In the jobs-versus-environment debate, jobs obviously won this battle. While I imagine permafrost presents some technical challenges for engineers, the fact Inuvik’s utilidor system seems to be able to operate in a mostly okay state — in-spite of standing on pilings 30-years past their expiry date — tells me a pipeline would also be a feasible way to move LNG around the region at a further reduction of emissions. Especially for places lacking year-round road access like Aklavik. But less trucks means less truckers.

Whenever a project like this comes to head, there are questions that need to be asked and answered — How big of a market is the long-term plan? Certainly, if they can get as far as making LNG and shipping it to Inuvik and Tuk, Fort McPherson and Tsiigehtchic aren’t that far off.

But what’s the limit of how far this will eventually reach? Running gas throughout the Delta would be ideal, but why stop at the border? Dawson City, Old Crow, possibly even Whitehorse could be within range. But the further trucks travel, the more fossil fuels they burn. Eventually the net benefit would get cancelled out.

If LNG use in the region takes off, would there be more wells dug? Will the environmental assessment be available for public viewing? Are there dangers of contamination of ground water or permafrost from leaks?

From the Beaufort Sea all the way inland to Norman Wells there are countless tough lessons that have been learned by not asking these questions. In my birth province and I suspect many places on Earth, those who ask these questions are often looked upon with disdain for “burying progress in red tape.”

I’m only now starting to learn about the past environmental problems that have resulted from overenthusiastic mining up here, but I can tell you in Alberta there are farms where water can literally be lit on fire because of natural gas wells that weren’t dug properly, so it pays to do things right the first time.

Given that this project is intended to benefit the people who live here and will continue to live here for generations, I’m confident the IRC is taking the potential pitfalls of developing natural gas in the region seriously.

Case in point, during the presentation to Town Council June 15, it was mentioned the access road would have to cross one of two streams, both of which assessments found the risk is negligible.

One thing is certain — this should remain an energy security focused project and not a “give me another boom” scheme. The global gas market is so over-saturated right now it’s debatable how much profit could be made selling it to foreign markets for the amount of effort it takes to gain access.

Let resources serve those who live above them.

Inuvialuit Regional Corporation planning to re-start old TUK M-18 well to kickstart liquefied natural gas production

by Eric Bowling
June 22, 2020

Originally published on NNSL Media

Inuvialuit Regional Corporation (IRC) is hoping to re-establish an old natural gas well to replace its ageing Ikhil gas well and is exploring the possibility of establishing a small Liquefied Natural Gas (LNG) plant at the site to provide a cleaner alternative to diesel.

While still a greenhouse gas, natural gas is considered “cleaner” than diesel in the sense that it produces less sulphur oxide and nitrogen oxide, produces 40 per cent less carbon dioxide and does not produce soot or heavy metals. LNG in particular dissipates when spilled on water or soil and leaves no residue, but is kept at -162 C in storage. It is not flammable while in liquid form.

Work is currently in the preliminary stages, with IRC’s partner Ferus Natural Gas Fuels Inc. (Ferus NGF) speaking with stakeholders in the area, including the Town of Inuvik.

Representatives from Ferus NGF and Inuvialuit Petroleum Corporation, an IRC subsidiary, made a presentation to Town Council June 15.

“The whole project is for the purpose of addressing the energy security issue that many northerners face, but particularly northerners that are at the end of a very long road,” said IPC special advisor Kate Darling. “The commodity price is nothing near the landing cost of natural gas, propane and diesel that are transported from thousands of kilometres away. The issue is not just the distance, but also the disruptions that can occur along the transportation routes.”

Darling told council currently Inuvik gets propane from Taylor, B.C., LNG from Grande Prairie, Alta. and diesel from Edmonton, covering distances of 2,500 to 3,000 kilometres.

The project includes a plan for remediation of the current Ikhil J-35 gas well, which has served as a backup unit for the IRC but is near the end of its lifespan — Darling said it had about two years left in service. Instead, TUK M-18, a 3,000 metre deep well that was dug almost two decades ago but never put into use, will be remediated and put into production alongside the proposed gas plant. Currently, Canadian Natural Resources Limited owns the sump but the Inuvialuit Land Administration has the final say on how it will be remediated.

A four kilometre all-weather access road, which would cross one creek, would also be constructed to truck the LNG to customers. Current estimates on traffic is between five to eight trucks every 24-hours to-and-from the facility. Ferus NGF Canadian-business president Travis Balaski said the plant would be in operation for at least 50 years and the TUK M-18 site has an estimated 278 billion cubic feet of usable gas.

“The first phase of this project is really just contemplating getting natural gas to Northwest Territories Power Corporation (NTPC) in Inuvik,” said Balaski. “TUK M-18 is really the only well that’s easily accessed without having to drill a new one. Most of what exists in the Beaufort Delta has been remediated or capped and would be very difficult to put back into production.”

He added the other initial customers would be Inuvik Gas Ltd and Tuktoyaktuk NTPC.

Darling pointed out during the presentation that 89 per cent of Inuvik houses and businesses use natural gas heating and a 2017 LNG power feasibility study calling for converting diesel generators to LNG in Tuktoyaktuk could also be implemented. She said the project could reduce greenhouse gas emissions in the Beaufort Delta by thousands of tonnes per year.

According to the GNWT, in 2017-2018 Inuvik drew approximately 39 per cent of its electricity from natural gas, 60 per cent from diesel generation and the remaining one per cent from solar collection.

A timeline for the “Inuvialuit Energy Security Project” was also presented, anticipating a design for the LNG plant and regulatory approvals to be in place by the end of the year, with worker training and construction to begin in 2021. Trucks carrying LNG to customers are hoped to be rolling out of the TUK M-18 well site by spring of 2022. Construction will be worked around migratory bird seasons to minimize impact on wildlife.

MLAs likely to begrudgingly pass carbon tax

by Nick Pearce
August 16, 2019

Originally published on NNSL Media

Two things were clear in the legislative assembly Thursday: the territory’s made-in-the North carbox tax was set to pass, and no one was happy about it.

Thursday marked the final house discussion before the carbon tax’s slated Sept. 1 roll out. MLAs – including Finance Minister Robert C. McLeod, who shepherded the plan – either derided the tax as a lesser of two evils against a possibly more punishing federal carbon tax if they didn’t approve their own, or in the case of MLAs Kevin O’Reilly, Kieron Testart, and Cory Vanthuyne, suggesting it should be scrapped entirely.

If a new federal government came to power and repealed the tax, McLeod told the assembly he assumed a future government “would make an amendment to their legislation so quickly it would probably be one of the fastest pieces of legislation ever to go through this assembly, and rightfully so.”

The territory’s made-in-the-North plan, an alternative to a proposed federal tax, would price greenhouse gasses at $20 per tonne. That would rise annually until reaching $50 per tonne in 2022. The territory would rebate the carbon tax on heating fuel, which residents would file for at tax time, and aviation fuel would also be exempt.

A cost of living benefit would aim to ease the strain on residents’ paying more at the pump.

However, the mode of transportation for transporting that fuel would still be taxed. Suggesting it may be cheaper to fly-in fuel than shipping it by sea to communities, Nunakput MLA Herbert Nakimayak noted the already high cost of living in his constituency would be adversely affected.

“It might be a good idea to look into buying an airplane, now that we have barges,” he said to laughter.

The plan also aims to hand large emitters like mines a 72 per cent rebate on their taxes,with 12 per cent going into individual trusts. Those large emitters can use the trusts to invest in further greenhouse gas emissions.

Cabinet would manage remaining funds – the limited public reporting of which O’Reilly has repeatedly panned.

“Unfortunately, the bill really does not contain any provisions for any kind of public reporting, and all of the rebates or grants are going to be determined by regulations set afterwards,” he told the assembly, calling it “a made-by-cabinet approach” that lacked consultation.

He, along with Testart and Vanthuyne opposed the plan outright. Testart reiterated criticism that the MLA committee assigned to the plan lacked teeth, and was frustrated at its inability to influence the legislation.

He and O’Reilly also noted there hasn’t been a costed NWT-oriented federal plan that can be compared to the GNWT’s plan. Yellowknife Centre MLA Julie Green added the Yukon worked with the federal government to create its carbon tax plan, which she said had “distinct advantages.”

Despite their objections, the vote is set to pass. That’s largely because MLAs Nakimayak, Frederick Blake, Shane Thompson and Danny McNeely all arrived at McLeod’s conclusion: between the feds and the GNWT, the territory’s tax, imperfections aside, would make the best of a bad situation.

Blake told the assembly the tax would be difficult for his region, where a road trip to Inuvik from Aklavik or Tsiigehtchic, could easily cost $150 or $200. The federal elections could be a change of circumstances, he said.

“I believe this is the best plan we have moving forward. Who knows what will happen in the next federal election,” he told the assembly.

As debate continues on the plan, the current assembly must pass it before next Friday, or risk Ottawa imposing a plan after the Sept. 1 deadline.

IRC, GNWT to develop gas resources

by Samantha McKay
October 5, 2018

Originally published on NNSL Media

The Inuvialuit Regional Corporation (IRC) is set to start developing the trillions of cubic feet of natural gas in the Inuvialuit Settlement region with the support of the Government of the Northwest Territories (GNWT).

IRC chair Duane Smith said a feasibility study was undertaken to assess the opportunity for resource development along the Inuvik-Tuktoyaktuk Highway.

“The study examined a number of sites, and depending on the different scenarios, we think that there’s potential for development of one or more of these potential wells,” said Smith. “We’re looking at a couple of the wells that have more potential than others, and these ones have 100 year, if not longer lifespan forecasted in them.”

Smith said it is important to get started on development as soon as possible because Inuvik’s current source of natural gas, the Ikhil well, is running on borrowed time – five years past its projected lifespan.

“We’re sitting on nine trillion cubic feet of gas, so it doesn’t make sense for the community to truck in its energy sources from 2,000 km away when it should be developed here,” said Smith. “We would rather start this sooner than later, because we see the benefits that will come to each of the communities that we would provide service for.”

Smith said the development will potentially provide fuel and employment opportunities for all communities in the Beaufort Delta region.

Before IRC can move forward, they need to gain support for the project from the federal government as well as other partners such as the Northwest Territories Power Corporation.

Premier Bob McLeod said the GNWT is supportive of the development of gas resources in the region.

“We have to use our own resources in our own territory,” said McLeod.

Wally Schumann, minister of Industry, Tourism and Investment, and minister of Infrastructure, echoed the premier’s sentiment.

“Nobody is coming to fix the problem, so if we’re going to fix the problem, we have to fix it ourselves,” said Schumann. “This is the start of the answer to a lot of our problems.”

EDITORIAL: Time to talk oil and gas

by Editorial Board
October 1, 2018

Originally published on NNSL Media

A serious discussion needs to be had sooner than later on the future of resources in the territory.

With the Diavik diamond mine facing closure in 2025 and the Gahcho Kue diamond mine having only a little more than a decade of mine life remaining, that’s thousands of jobs wiped out.Beyond mining, the territorial government has created a plan to capitalize on the NWT’s enormous volumes of oil and gas. While the GNWT’s Petroleum Resources Strategy wisely makes repeated references to working in partnership with Indigenous governments, it must amount to more than words on paper. Contained within the document, tabled in May, is this understatement:

“But while the NWT’s petroleum resources sector has long been an industry on the verge of becoming a powerful economic driver, it has, to date, never realized its potential.”

Norman Wells has flowed crude for several decades. The Beaufort Delta and Fort Liard saw temporary booms from natural gas. But this represents only a fraction of the NWT’s promise.

Beyond mining, the territorial government has created a plan to capitalize on the NWT’s enormous volumes of oil and gas. While the GNWT’s Petroleum Resources Strategy wisely makes repeated references to working in partnership with Indigenous governments, it must amount to more than words on paper. Contained within the document, tabled in May, is this understatement:

“But while the NWT’s petroleum resources sector has long been an industry on the verge of becoming a powerful economic driver, it has, to date, never realized its potential.”

Norman Wells has flowed crude for several decades. The Beaufort Delta and Fort Liard saw temporary booms from natural gas. But this represents only a fraction of the NWT’s promise.

In a territory where 23 of the 33 communities rely on diesel fuel, which belches relatively high volumes of environmentally-damaging carbon, a pipeline in the territory could be one of the few ways we might effectively reduce carbon emissions. However, that comes with an acknowledgment that pipelines involve an element of risk. In April, 290,000 litres of oil and salt water leaked from a pipeline in Zama, Alta. Technology has made pipelines safer, but not foolproof.

The Inuvik-Tuktoyaktuk Highway has renewed interest in Beaufort Delta natural gas fields that could feed surrounding communities. That should jump start a renewed effort to tap into our abundant reserves, provide local energy for our communities and devise a pipeline plan that will bring handsome profits from shipments to the south.

We need to make sure we have our collective drill heads together to avoid suffering the same fate as communities in northern British Columbia, which suffered as a result of the Northern Gateway pipeline debacle.

This doesn’t mean renewable energy should go ignored. Hydro has proved to be extremely valuable to the NWT. It should be further developed in tandem with fossil fuels because neither can serve the territory’s needs alone.

The GNWT didn’t support the Northern Gateway or the Energy East pipelines, but threw its support behind the Trans Mountain line, which the courts rejected in August due to a lack of consultation with First Nations. However, it was announced last week that the National Energy Board is kicking off a new round of public hearings to be completed by Feb. 22, 2019, so Trans Mountain isn’t buried yet.

Premier Bob McLeod said in his keynote speech at the Arctic Oil and Gas Symposium that “we are faced with odds that a Vegas gambler might cringe at.”

We don’t need a crystal ball to see the potential that lies right beneath our feet.

With the Mackenzie Valley Pipeline consortium collapse and an unrealized potential after decades of planning, heated debate and regulatory proceedings, the government needs to work hard to create new resource development schemes. Part of that means completing final agreements in order to give ownership back to the Indigenous people of the North, so the territory is prepared when the right economic and regulatory conditions do come back around.

Feds fund gas feasibility study

by Kirsten Fenn
September 6, 2017

Originally published on NNSL media

The federal government is investing $467,200 in a feasibility study that will determine the possibility of natural gas development along the soon-to-open Inuvik-Tuk highway, according to a news release from the Canadian Northern Economic Development Agency (CanNor).

Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for CanNor, made the announcement Aug. 31.

The Inuvialuit Regional Corporation (IRC) is in charge of the study and has started receiving proposals for the project.

Inuvik currently gets gas from southern sources and from the Ikhil well, which is expected to be empty in five years.

“Should natural gas extraction be viable, the development of this resource could provide clean energy security, employment opportunities, and support a sustainable economic future in the Inuvialuit region,” the news release stated.

Inuvik Gas and Town Sign New 10-Year Franchise Agreement

Customers Assured Ongoing Access to Safe, Reliable Distribution System

INUVIK, NWT – Inuvik Gas Ltd. (IGL) and the Town of Inuvik have agreed to a new 10-year Franchise Agreement that ensures the community will continue to have access to a safe, reliable gas distribution system for their energy needs.

“I want to thank the Mayor and Town Council for their co-operation and desire to find the best solution for the community”, said Brad Driscoll, General Manager, Inuvik Gas. “We have been part of this community for 15 years and we look forward to strengthening our relationship with customers and delivering on our energy commitment.”

The Town and Inuvik Gas explored several options over the last year before determining the best solution was a new Franchise Agreement to provide the community with access to natural gas and Synthetic Natural Gas at competitive rates.

“We look forward to working with Inuvik Gas and exploring other fuel options that can be used in the existing distribution system, such as Liquefied Natural Gas (LNG),” said Mayor Floyd Roland. “This franchise renewal assures residents of continued high-quality service from a company that has served them for a decade and a half.”

As the LNG supply chain continues to develop and mature, it is anticipated this will provide additional fuel options for the community.

Brad Driscoll
General Manager
Inuvik Gas
(867) 777-3422

Grant Hood
Senior Administrative Officer
Town of Inuvik
(867) 777-8600

Heat Trace System - Important Reminder for Customers

October 28, 2014

INUVIK, NT -- Inuvik Gas Ltd. would like to remind customers that the heat trace for each gas meter and above-ground gas riser must remain on. The heat trace and insulation is required to ensure the Synthetic Natural Gas system works safely during extreme cold weather. Please do not switch the heat trace off at any time.

In late 2012, Inuvik Gas equipped each customer’s meter and above-ground gas riser with electric heat trace and insulation to ensure the safe, reliable distribution of Synthetic Natural Gas during extreme cold weather. This is similar to wrapping the exposed areas in an electric blanket, or like the electric heat trace in your utilidette.

The supply of electricity to the heat trace must remain on to ensure system safety and reliability. The heat trace is controlled by a thermostat (GFI device) located in your home or business.

Inuvik Gas will be checking the heat trace at the gas meter periodically over the heating season to ensure the safe operation of the system. If you have any questions about the location of your heat trace or GFI device, please do not hesitate to contact Inuvik Gas:

Brad Driscoll
General Manager

Inuvik Gas Limited
(867) 777-3422

Inuvik Gas and Town to Negotiate New Franchise Agreement

May 14, 2014

Customers continue to benefit from safe reliable distribution system after August

INUVIK, NWT – Inuvik Gas Ltd. (IGL) and the Town of Inuvik have agreed to negotiate terms of a new Franchise Agreement to ensure the community continues to have access to a safe, reliable gas distribution system. The current agreement is set to expire in August 2014.

“Over the past year we have worked with the Town to explore options and we’ve determined the best solution is for Inuvik Gas to continue to own and operate the system,” said Brad Driscoll, General Manager, Inuvik Gas. “We would like to express our appreciation to the Mayor and Town Council for their cooperation in finding the best solution going forward. We know a renewed Franchise Agreement with the Town of Inuvik will strengthen our relationship and demonstrate our commitment to the people of the community and the North.”

Throughout the discussions, IGL has maintained that there is long-term value in the distribution system, which can be adapted to accommodate other fuel options in the future. “There was a real spirit of co-operation throughout the process as we explored many alternatives for the people who live in this community,” said Mayor Floyd Roland. “We look forward to working with Inuvik Gas while we explore fuel options such as Liquefied Natural Gas (LNG).”

As the LNG supply chain continues to develop and mature, it is anticipated this will provide additional fuel options for the community resulting in increased security of supply. For more information, please contact:

Brad Driscoll
General Manager
Inuvik Gas
(867) 777-3422

Grant Hood
Senior Administrative Officer
Town of Inuvik
(867) 777-8600

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