The decision by one company to withdraw plans to drill in the N.W.T. is heating up the debate around the environmental review process.
Some say the territory’s review process has too many uncertainties and it is pushing money away.
Others argue the review process needs to be tough to make sure development is done in a responsible way.
MGM Energy just backed out of its fracking project in the Sahtu region of the Northwest Territories. The company said there were too many unknowns — they didn’t know how long an environmental assessment would take, or how much it would cost.
The company also wanted to use the controversial method of fracking, but didn’t know how much water was available to use. On top of all that, the company didn’t know if they would find enough oil in the region to make it worthwhile.
The NWT Chamber of Commerce said MGM has every right to question the process.
“I think that it shows that our regulatory process in the territories is broken and it needs to be fixed,” said Hughie Graham, the president of the chamber of commerce.
Graham said other territories such as Yukon have deadlines for environmental assessments. There is no such deadline in the N.W.T., and Graham says that’s holding the territory back.
But not everyone agrees.
“MGM and Shell are being a bit disingenuous here. Fracking is a very controversial means of extracting oil and natural gas. Why anyone thought there wouldn't be an open-ended and fairly expensive regulatory review is beyond me,” said Doug Matthews, an oil and gas analyst in Calgary.
Ecology North, an environmental group in Yellowknife, said the territory isn’t losing anything when companies abandon projects.
"Nothing has gotten up and walked away - all of those resources are still in the ground," said Christine Wenman, who works with Ecology North.
Wenman said MGM was impatient and “jumped the gun”.
The NWT Chamber of Commerce disagrees, saying time is money.
“We've gone 10 years without any major projects being permitted; that's very telling. We are certainly pushing investment and business into other parts of Canada and other parts of the world,” said Graham.
But Wenman says the process doesn't need reform. She says the application to do fracking in the Sahtu region is controversial and so caution should be a priority.
“And that's what we want from the review process: we want to make sure that when we move ahead with development in the N.W.T. we are doing so as responsibly as we can.”
Also this week, an Alberta-based company blamed the regulatory review process in Nunavut for killing a project in the Kivalliq region of that territory.