- The Washington Times - Tuesday, May 28, 2002

INUVIK, Northwest Territories Brian Desjardins headed up to Canada's western Arctic in 1999 to escape the pressure and hassle of urban life down south. It hasn't quite worked out that way.

Instead of hunting caribou across the frozen tundra, the tourism and fund-raising coordinator for the town of Inuvik finds himself planning conferences and dealing with newcomers lured by the region's latest energy boom.

Almost daily, people throughout North America send Mr. Desjardins e-mail asking about work and lodging in this town of 3,500 and growing at one of the northernmost points of mainland Canada, where the MacKenzie River approaches the Beaufort Sea.

The frontier environment he first encountered has become a minimetropolis, with diesel trucks cramming MacKenzie Road and a months-long wait for housing. Mr. Desjardins, 30, laughs at the irony.

"One of the reasons I came up here was to kind of slow down, get out of the rat race," he said. "If anything, the pace has gotten faster."

The excitement comes from renewed talk about building a pipeline to transport natural gas from the MacKenzie Delta to points south.

Increasing U.S. demand, now backed by the Bush administration's desire for North American energy sources to reduce dependency on overseas supplies, is the main catalyst for Inuvik's growth spurt.

The debate in the United States over a proposal to drill for oil in the Alaska National Wildlife Refuge recently rejected by the Senate while supported by the House also has reinvigorated the idea of pipelines to carry gas from Alaska and Canada to the lower 48 states.

Pipeline talk began three decades ago with the discovery of Arctic gas deposits, setting off an exploration boom in the Inuvik area. But unsettled land and economic rights of the region's indigenous peoples derailed the idea.

With that issue resolved in recent years, confidence about rising U.S. demand for energy has brought back the explorers and speculators.

"One of the primary motivating factors is the anticipated increased growth and the anticipated increased demand from the lower 48," said Hart Searle, spokesman for a consortium of energy producers studying a possible pipeline along the Northwest Territories' MacKenzie River Valley.

"The market makes it all go round. You've got to have confidence in the market."

A pipeline is seen by some as the railroad of Canada's north, opening the Arctic to increasing development and changing forever how its people live particularly the Inuit and Indians of the endless tundra. Some see that as a negative, bringing pollution and other environmental stress. Others see it as a boon for a region facing the shift from a traditional economy of hunting and trapping to the job-based economy of the south.

A 1977 government report by Thomas Berger that opposed building the pipeline warned of roads, airstrips, river wharves and other permanent transportation links that would bring thousands of tractors, earth movers, trucks and barges to a region accessible only by air, water and winter ice roads.

While Mr. Searle says a decision on whether to build a pipeline remains years away, change in the MacKenzie Delta is already evident. More than 1,000 workers fill exploration camps dotting the frozen Beaufort Sea and the MacKenzie Delta; the myriad ice roads dotted with signposts pointing the way to various projects even have stop signs at some intersections.

"The whole character of the place has changed quite significantly: A lot of people. A lot of activity. Everybody's busy. Prices have gone up," said John Nagy, an environmental researcher for the Northwest Territories government who first came north in the previous boom.

Throughout the region, the main question is whether the development and accompanying dollars will stay this time or disappear again, as when the first boom fizzled in the late '70s.

"We all talk about the things we really care about, but when you really come down to the harsh reality, the economics of the pipeline is what's going to drive it," said Nellie Cournoyea, an Inuit leader who heads the Inuvialuit Regional Corp., which controls her people's traditional lands.

Various pipeline plans exist, with two getting the most serious consideration. One plan entails piping gas from Alaska across Canada's Yukon Territory to hook up with a broader distribution network in Alberta.

The other, at an estimated cost of more than U.S. $1.3 billion, would build a pipeline following the MacKenzie River from near the Beaufort Sea to Alberta, running for more than 780 miles through the Northwest Territories.

An alternative would include a connecting arm beneath the Beaufort Sea to Alaska, but the extra construction and bureaucratic demands of dealing with U.S. and Canadian politics and regulators make the Canadian-only plan the front-runner for now.

Mr. Searle's MacKenzie Delta Producers Group comprises four companies Imperial Oil, Conoco Canada Resources, Shell Canada and ExxonMobil Canada with Mrs. Cournoyea's MacKenzie Valley Aboriginal Pipeline company as a partner.

That partnership is the kind of deal envisaged by Mr. Berger in his 1977 report, considered a milestone in government-aboriginal relations. He said then that the Inuit and Indian communities needed the protection of land-claims treaties and partnership agreements to deal with the irrevocable change of Arctic development.

Now, Mr. Berger said in a telephone interview, aboriginal communities "have the opportunity to have an ownership interest in the pipeline and to participate in whatever spinoffs there are."

While the Inuvialuit treaty gives Mrs. Cournoyea's people control over their traditional lands, she said, they also needed the partnership deal with the producer group to guarantee a role in building the pipeline.

"Before they didn't have to deal with us," she said of the energy companies. "But even though there's a [land] claim, we really have to work hard to be dealt with in a meaningful way, you know?"

Inuvik Mayor Peter Clarkson, overseeing growth that is expected to increase the town's population by more than 50 percent, said the indigenous land rights "mean a lot more money is staying in the North now. I think that's a big step."

He sees the impact in Inuvik, where building permits were issued for construction worth $17.5 million last year, compared with $1.3 million in 2000.

Mr. Clarkson anticipates a similar figure for 2002, due in part to construction of territorial projects including a new hospital and female youth-offenders facility, along with badly needed housing.

The natural gas is there. Joanne Nutter of Imperial Oil says 6 trillion cubic feet of it awaits in three known fields, while Canada's National Energy Board estimates the potential reserves in the MacKenzie Valley-Beaufort Sea region could exceed 60 trillion cubic feet.

Miss Nutter said the pipeline would be open to other producers. That has energy producers increasing exploration, knowing any gas they find would have a way south to satisfy American consumption. The U.S. Energy Information Administration predicts consumption will increase 40 percent by 2020.

The MacKenzie Delta Producers Group is preparing to seek regulatory approval for a pipeline while consulting Inuit and Indian leaders to work out benefit plans and access agreements.

Consultations include public meetings in communities along the MacKenzie, like a recent gathering where Miss Nutter fielded questions from 17 persons at the Town Hall in Fort Good Hope, a 197-year-old trading post accessible only by air or water 180 miles upriver from Inuvik.

Lucy Jackson, an interpreter for tribal elders during the Berger commission hearings three decades ago, said she worries the aboriginal people lack sufficient understanding of what the pipeline will mean. In any case, she thinks "the spinoff isn't going to be that great."


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