People are moving out of Norman Wells, N.W.T., over the soaring price of the natural gas that heats their homes, according to the town's mayor.

Dudley Johnson said the price of natural gas in Norman Wells has more than doubled over the past four years, and at least three families have left the community of 761 because the cost of living there is too high.

It's expected to cost about $2,500 this year for an average home in Norman Wells to be heated with natural gas, which is provided to the town by Imperial Oil as a byproduct of its oil extraction operation in the area.

"We're living on top of the resource, basically, and yet we're paying such high rates for it," Johnson told CBC News.

By comparison, town officials said the average annual heating cost in 2008 was around $1,100.

Johnson said he wants to renegotiate natural gas rates with Imperial Oil before more families move out.

"I am very worried about the situation, but I am hopeful that the Mackenzie gas pipeline, if it goes ahead, will solve our problem because that could turn around everything here in the blink of an eye," he said.

Imperial Oil spokesman Pius Rolheiser said gas reserves are dwindling, noting that natural gas is just a byproduct that was never meant to sustain a town for a long time.

"We're making our best efforts to continue supplying gas at the current rate for as long as we can, and there are costs associated with that," Rolheiser said.

Imperial Oil has just retrofitted its oil extraction facility in Norman Wells — considered to be Canada's most northerly oil field — with the goal of prolonging its project and, in turn, continuing to sell natural gas for a longer period of time.

However, Johnson said he's unhappy that Imperial is not able to reduce its natural gas prices in Norman Wells.

Johnson said the town is subsidizing the cost of heat for residents this month, since January is one of the coldest months of the year and many residents are cash-strapped after the holidays.

The town is also looking at exploring alternative energy sources to reduce its dependence on natural gas, he said.