The Wek'eezhii Land and Water Board has decided that Husky Oil's proposal to explore the North Arm area of Great Slave Lake for a type of sand used in fracking must undergo an environmental assessment.
The board says Husky's application to drill approximately 200 holes near a popular recreational area known as Whitebeach Point has generated widespread public concern.
"The Tlicho Government, Yellowknives Dene First Nation, and North Slave Métis Alliance have clearly communicated to the board that the proposed land use area is of significant importance to them," the board wrote in its decision.
The board also cited concern from non-governmental organizations such as Alternatives North and the Council of Canadians.
"I think the board made a wise decision," said Peter Redvers, co-chair of the N.W.T. chapter of the Council of Canadians.
"One of the things we raised was that it's a highly-used recreation area. It's also a harvesting area for non-aboriginal hunters from Yellowknife as well as aboriginal first harvesters."
Husky's next steps uncertain
Husky hopes to establish whether the area is host to an economic supply of silica, used to prop open underground fractures containing tight, unconventional oil. The company is among those with interests in the Sahtu unconventional oil play.
Its application to drill for silica will now be assessed by the Mackenzie Valley Environmental Impact Review Board.
Asked whether Husky is considering pulling its application, Husky spokesperson Kim Guttormson wrote via email, "We will wait to see the process before determining our next steps."
The review board has up to nine months to conduct the environmental assessment, provided no public hearing is held. If there is a hearing, the board has up to 16 months.
Husky's application stated the company hoped to begin drilling next month.