This week we have a story about the GNWT’s negotiations with other governments, including the Inuvialuit Regional Corporation, to end the five-year-old moratorium on oil and gas and put the Beaufort Sea under local control.
It hits all the right notes on paper. Return resources to the people who live above them and allow people to be the stewards of their own destiny.
It also seems kind of pointless in the changing global market.
During the presentation that prompted the story, I asked GNWT oil and gas planner Mike Harlow what the minimum price of oil would be for a company to justify the costs of exploring, drilling and extracting oil from the Arctic coast. He didn’t have an exact number, but said the last time plans were in operation the price was over $100 a barrel. When I put the question to Industry, Tourism and Investment Minister Caroline Wawzonek, she anticipated oil companies had their own minimums, but noted she had not heard much expressions of interest in resuming drilling in the North since taking office.
The last times oil was in those ranges was during the Obama years when the United States stepped up military operations in Afghanistan in the hunt for Osama bin Laden. More recently, the price has stumbled around $50 to $70 over much of the last decade before collapsing into negative territory during the pandemic. The Organization of Petroleum Exporting Countries has since managed to push it back to the $50 to $70 average where it will likely remain for the next decade, barring the onset of another war.
Couple this with plans by governments of the world’s major economies to finally start taking the climate crisis seriously enough to set somewhat aggressive emissions targets and the chances of a Beaufort Delta oil boom returning are on even thinner ice. And we haven’t even gotten to how receding ice caps could limit exploration.
Even without Ottawa saying no, there isn’t likely going to be much, if any, drilling happening off the coast. There’s simply no money in it.
And as blasphemous as this may sound to some, the North should be thankful of that.
In my birth-province of Alberta, there’s classic bumper sticker in the form of a prayer. It goes “Lord, please grant me one more oil boom. I promise I won’t piss it away this time.”
For decades governments in petro-states like Alberta and around the world have long depended on oil revenue to cover vital services and keep taxes unsustainably low. The results of this are enormous, with an entire generation of people so addicted to oil-wealth they’ll lash out at any sort of critic of development, be they environmentalist, water quality scientist or even market analysts. Oil has seeped so deep into people’s psyches for some a world without it is impossible. It remains to be seen if they can adapt to the post-carbon world.
The north has largely avoided this. Instead, we seem to have a realistic approach to fossil fuels — use locally sourced natural gas to replace diesel and push renewable and clean energy in lock-step.
We don’t need to repeat other people’s mistakes. Let’s focus on the things that have a real chance of improving life in the Arctic.