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Beaufort Coast Communities Seek to Retrieve Lost NatGas Production Status

It’s a case of natural gas all around and not an MMBtu to burn. Communities on Canada's Beaufort Sea coast, hoping to retrieve their lost status as a breeding ground of production and pipeline designs, have set out to melt their industrial deep freeze by developing local gas.

A new grant from the federal Department of Innovation, Science and Economic Development supports the ambition of eight Mackenzie Delta settlements. Native-owned Inuvialuit Regional Corp. (IRC) received C$467,200 (US$373,760) for a feasibility study of replacing depleted local gas supplies.

Delta utility Inuvik Gas Ltd. has given notice that it will disband as of December 2018. The withdrawal ends a prolonged trial run at spreading mainstream commercial energy activity and benefits to Canada's northern frontier.

Service began nearly 20 years ago, as a joint venture of IRC's Inuvialuit Petroleum Corp. with Calgary firms AltaGas and ATCO. The trio drilled two wells and built a processing plant and pipeline, named the Ikhil Project after their site, to fill the first arctic household and power plant distribution grid.

The local service was seen as a rehearsal for the C$16.2-billion (US$13-billion) Mackenzie Gas Project's 1,200-kilometer (720-mile) pipeline to Alberta that would be filled with up to 1.8 Bcf/d from Delta wells.

The small Ikhil wells started petering out in 2010-11, at the same time as a six-year regulatory ordeal delayed the Mackenzie package until it had to compete unsuccessfully with growing surpluses of far lower-cost southern shale fracking production.

While the big project stays shelved with no end in sight to its current dormant status, the stranded Delta utility and power plant service has switched fuels to imported propane and diesel. Northern residents, pointing to nearby gas deposits measured in trillions of cubic feet, coined a bitter joke that the arctic energy scene is like buying ice from Alberta.

An updated green tinge has been put on the new attempt to revive at least northern regional gas development. Federal Innovation Minister Navdeep Bains, in a statement announcing the feasibility study grant, said: "Natural gas projects lead to energy security, healthier communities, and a cleaner environment. Our government will continue to invest in clean energy projects that foster better jobs and improve living standards for northerners."

IRC chairman Duane Ningaqsiq Smith, parting company with southern environmental and native opponents of fossil fuel development, added: "Inuvialuit are committed to working with our territorial and federal counterparts to unlock the potential of our region. This feasibility study will improve our collective ability to take advantage of the cleaner energy that lies right beneath our feet."

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