Resource companies say projects iced by northern regulators

Two resource development companies are blaming the northern regulatory systems in the N.W.T. and Nunavut for their decisions to terminate their exploration projects.

Uravan, MGM walk away from projects in Nunavut, N.W.T.

Two exploration projects, one in the Northwest Territories and one in Nunavut, have been abandoned, and the companies behind them are blaming regulators.

Environmental assessments were ordered for Uravan Minerals’ Garry Lake uranium drilling program in Nunavut and MGM Energy’s fracking project in the Sahtu region of the Northwest Territories..

MGM announced this week it has withdrawn its regulatory applications to do the horizontal fracking. Uravan recently let its mineral claims expire.

Uravan president Larry Lahusen scoffed at the Nunavut Impact Review Board’s contention that an assessment of the Garry Lake project is required because it is in sensitive caribou habitat.

"This is all a fallacy, this fear of impacting caribou on the sub-arctic barrenlands with exploration activity," said Lahusen. "You realize our footprint is so small, and our activity is so short, any kind of impact just nonsense talk"

Uravan’s project in the Kivalliq region of Nunavut consisted of drilling between 10 and 20 holes, each two kilometres apart.

Lahusen said an environmental impact assessment on the Garry Lake project would cost millions and take years. He says Uravan has spent about 4-million dollars on the project so far.

MGM’s decision to withdraw applications for its fracking project in the central Mackenzie Valley came after the company’s partner, Shell Canada, decided it didn't want to pay to go through an assessment.

MGM’s vice president of exploration, John Hogg, said the cost of a environmental assessment is too high for the relatively unproven Canol shale formation, especially because the company doesn't know how much an assessment would cost or how long it would take.

But a Calgary-based oil and gas analyst says MGM is being less that forethright in blaming regulators.

"Fracking is a very controversial means of extracting oil and gas," said Doug Matthews. "Why anybody would think there wouldnt' be an open-ended and fairly extensive regulatory review is beyond me." 

MGM still plans to drill a conventional well this winter, as well as water wells, in an attempt to gather more data.  The company is also building a winter road to its site 25 kilometers southwest of Tulita.  However, Hogg said work planned for 2014 can not go ahead.