Talks to manage offshore Arctic drilling may signal end of ban: NWT premier

The federal government is opening talks with northerners on managing offshore energy exploration in the Canadian Arctic, a move some hope signals a coming relaxation of the current ban on potential development.

Northern affairs minister says 'partners were very clear' they want to help manage Arctic resources

Northwest Territories Premier Bob McLeod says he wants to see the current moratorium on offshore exploration in Arctic waters will be lifted after five years. (Bill Braden/CP)

The federal government is opening talks with northerners on managing offshore energy exploration in the Canadian Arctic, a move some hope signals a coming relaxation of the current ban on potential development.

"I would hope that's the case," said Northwest Territories Premier Bob McLeod

"We'll see as we negotiate. I certainly am feeling very optimistic."

Northern Affairs Minister Dominic LeBlanc and Natural Resources Minister Amarjeet Sohi announced Thursday that Ottawa will negotiate a Beaufort Sea oil and gas co-management and revenue-sharing agreement with the governments of the Northwest Territories and Yukon, as well as the Inuvialuit Regional Corporation (IRC).

In 2016, Prime Minister Justin Trudeau announced an indefinite moratorium on all offshore energy exploration in Canada's Arctic, subject to a review every five years. He made the announcement in conjunction with then-U.S. president Barack Obama, who brought in similar measures.

Since then, President Donald Trump has announced plans to open the American Arctic to drilling.

Duane Smith is chair and CEO of the Inuvialuit Regional Corporation, which welcomed Thursday's federal announcement. (Senate of Canada/Jade Thériault)

In a statement issued Thursday, the IRC welcomed the federal government's announcement, after the 2016 ban "caused frustration and uncertainty" for northerners, the statement said.

"The Beaufort Sea comprises a significant portion of the Inuvialuit Settlement Region under the Inuvialuit Final Agreement," IRC chair and CEO Duane Smith said in the statement.

"Clarifying the rights, the appropriate distribution of benefits and management of resources in our offshore area will be the essential first step to fulfilling Minister LeBlanc and Sohi's commitment."

'Our partners were very clear'

Leblanc, who recently toured the northern capitals, emphasized the importance of resources to the territorial economies.

"Our partners were very clear," he said in a release. 

Northern Affairs Minister Dominic LeBlanc visited Canada's three northern territories earlier this year. He says he understands northerners want to be involved in resource management. (Matt Smith/The Canadian Press)

"They want to be involved in the management of Arctic offshore oil and gas resources, and they want to see economic prosperity and jobs that will benefit Indigenous peoples and all northerners in the future without affecting the health of their environment."

Sohi said in a release that the government has been working with both the territories and the energy industry.

"We heard loud and clear that the protection of the Arctic environment and the sustainable, inclusive development of the region for the benefit of northern residents and all Canadians are critical to growing Canada's economy."

McLeod said much will depend on the five-year review, due in 2021.

"Unless we deal with the five-year review things don't change that much. We're hoping that after five years, they'll get rid of (the moratorium)."

He said his government will work toward an agreement similar to one reached by the Maritime provinces for their offshore.

"The GNWT has been waiting for today's announcement for some time and I appreciate that Minister LeBlanc has been able to make tangible progress," he said in a release.

63 existing exploration and discovery licenses

LeBlanc and Sohi also promised to involve northerners in a research program that takes into account marine and climate change science.

After a flurry of interest in the early 2010s, interest in the Beaufort offshore died down. Imperial Oil, which still holds large exploration leases in those waters, cancelled its drilling program in 2015.

As part of Thursday's announcement, the government also said it would preserve existing offshore exploration rights for energy companies and refund remaining deposits related to those licences.

There are 63 exploration and discovery licences in the Beaufort Sea. The financial consequences of that promise weren't immediately clear.

With files from CBC News