Imperial should ‘step up,’ minister says as MLAs debate Sahtu fuel crisis

Imperial Oil must do more to help Norman Wells – a community it has drawn profit from for decades – get through the town’s current fuel crisis, the NWT’s finance minister said on Thursday.

Caroline Wawzonek said this is a time for Imperial “to step up” as residents report heating fuel bills that now cost more than their entire monthly salaries.

Gasoline and heating fuel prices approached $5 a litre at the start of this month and have since been on a rollercoaster ride. The town has asked Imperial – which runs an oil field in Norman Wells and also supplies the community’s fuel – to explain what is going on.

So far, Imperial’s only comment has been to blame price increases on the need to fly in fuel after low water forced the cancellation of the summer barge resupply season, which is a cheaper means of transport. Imperial has declined interview requests.

Norman Wells has been home to an oil field for more than a century. That field has been Imperial’s responsibility for 40 years, Wawzonek pointed out as the legislature agreed to an emergency debate on the cost pressures hitting Norman Wells and the Sahtu region.

Wawzonek took care not to pin everything on Imperial. This is not about blame, she insisted, and she gave Imperial “credit” for productive recent meetings.

“But there is some responsibility here,” she said.

Wawzonek said the territorial government had spent months preparing for what had long looked like a problematic summer resupply season, finding extra cash and reaching other agreements to avoid spiking fuel costs in other Sahtu communities – where fuel supply is the GNWT’s responsibility.

In Norman Wells, Imperial is in charge of fuel supply rather than the GNWT.

In setting out everything the territory had done to help other communities, Wawzonek’s suggestion by implication was that Imperial had perhaps not taken the same steps in Norman Wells – an accusation residents have more expressly levelled at the company in recent days.

In an email seen by Cabin Radio, the town’s senior administrator this week asked Imperial: “It appears that Imperial didn’t sufficiently plan for this shortage. Why is Imperial now in a reactive mode when they should have been in a proactive mode?”

“I certainly don’t want to be seen to be blaming Imperial Oil overtly,” Wawzonek said. “I do want to question responsibility.”

The minister added: “We did have a good call with them today. We put it to them that this is a time to step up as someone who’s been in that community for 40 years, drawing oil out, and now we need that oil to go back in.”

More meetings are expected in the coming days.

NWT facing ‘dire situation’

Norman Wells’ town council declared a local emergency on humanitarian grounds this week as some of its 700 residents said they were facing monthly fuel bills that now come to more than $5,000 or, in some cases, more than even $10,000.

Sahtu MLA Danny McNeely called the situation in Norman Wells “so dire.”

“We must move swiftly and decisively to address this crisis,” he said on Thursday.

McNeely wants the GNWT to find the money to cover what is estimated to be at least $6 million in extra air freight costs being borne by residents and businesses, beyond a $1.8-million support package for businesses that the territory has already announced.

Wawzonek said it wasn’t clear who she should “cut the cheque to” in the circumstances. Imperial, to subsidize its costs? The contractors taking that fuel and selling it to residents in Norman Wells? Or residents themselves?

“Do I provide cheques to companies that are going to continue to earn a profit on the sale of fuels,” she said, “or do I find some other pathway forward by which we can ensure that people are heating their heating their homes?

“I don’t have that solution here today.”

More broadly, Wawzonek warned that the crisis in the Sahtu could easily get worse in the weeks and months ahead.

Noting that the summer barge failure has already led the territory to incur huge losses, she said the NWT as a whole was “in a dire situation.”

“We are feeling it financially,” she said, pointing to government-owned power company NTPC as an example.

“NTPC is feeling it deeply right now in terms of what’s happening with low water and the costs that are being incurred by the government, just to try to keep power rates at the rate that they’re at, which is the highest rate of anywhere in Canada,” she said.

“I know this isn’t necessarily about power rates, but if Imperial Oil pulls out of Norman Wells” – Imperial is also the town power supplier, and has warned it may shut down its facility over regulatory delays – “I tell you it’s going to be about power rates real fast, because NTPC is going to be asked to supply.”

Forward thinking

Some MLAs say the NWT government needs to find a way to see this kind of issue coming further out and act accordingly.

“In the long term, we’ve got to be forward-thinking and not be getting caught off-guard by these things,” said Frame Lake MLA Julian Morse.

“Low water levels was unpredictable, but the fact that the cost of living was going to come to a head is predictable.

“Right now, we’re not in the position of being 10 steps ahead. What we’re talking about is a moment of having to catch up. But what I want us to get to is a spot where we are saying, ‘We saw this problem coming.'”

Yellowknife North MLA Shauna Morgan asked if the GNWT was looking at other practical solutions beyond cutting a cheque, like bringing wood stoves and pellet stoves into the community to relieve dependence on heating fuel.

“The crisis in Norman Wells has drawn our attention to how climate change makes our fuel resupply vulnerable with the low water levels,” Morgan said, “but it should also draw our attention to how vulnerable a community is when it has no competitive market for petroleum products.”

In the longer term, she wants the territory to do much more to ensure communities have energy backups and can move to cheaper, renewable fuels, lessening the risk of relying on one company.

“If we signal to a private company that’s in a monopoly position that this government has bottomless pockets to subsidize whatever is necessary in terms of fuel costs, we are putting everyone in a very dangerous situation,” she said.

“Whatever we do, we need to set clear limits on the subsidies we can provide to Norman Wells.”

Other MLAs stressed that regardless of the longer-term solutions, some sort of action has to be immediate to relieve the pressure on residents.

“People are saying they will leave and they will not look back, because they can’t. It’s not that they want to leave. They can’t stay,” said Range Lake MLA Kieron Testart.

“We have no choice,” said Inuvik Boot Lake MLA Denny Rodgers.

“Would it be great to be able to get that funding from the federal government? Of course it would,” he said. (The federal government has been approached for comment.) “But again, we can’t wait.”

“We don’t want to see it to become a ghost town,” Monfwi MLA Jane Weyallon Armstrong said of Norman Wells.

“And if it happens, how many other communities are going to follow?”