Thank you, Mr. Blake. Mr. Menicoche.

Thank you, Mr. Speaker. While many aspects of hydraulic fracturing are specific to a well’s location, some technical features of this process are universal. Hydrocarbon-bearing shale is found at least one and a half kilometres below surface. A resounding message that the committee heard from all presenters on the study tour is that sufficient well casing, cementing and depth are critical to protecting groundwater and human and environmental health during any horizontal drilling operation. Inadequacies in these areas are among the leading causes of groundwater contamination in shale plays in the United States. Wellbore integrity is also crucial during the drilling and fracturing process and the management of flowback and produced fluids.

In addition to sound wellbore construction, Members also highlight the importance of micro-seismic monitoring to ensure that fractures remain in their target zone, and to monitor, mitigate and avoid any negative impacts of induced seismicity.

Hydraulic fracturing is, by its very nature, water intensive. Proponents may use propane or other hydrocarbon-based fluids to fracture a well; however, the majority of wells are fractured with large volumes of water, sand and chemical additives. A typical well in the central Mackenzie Valley may require 10,000 to 25,000 cubic metres of water; that is 10 to 25 times the amount in the large water tanks in many of our communities, or 10 times the volume of an Olympic swimming pool. Committee members recognize our northern waters as a treasure and a resource that must be preserved through carefully considered management tools. Any policy on hydraulic fracturing in the Northwest Territories must speak to water management. The committee encourages the Government of the Northwest Territories to support industry initiatives to protect water quality, use non-toxic additives to fracturing fluid, and reduce fresh and surface water consumption. The committee agrees full chemical disclosure is vital to environmental protection and public accountability.

The province of British Columbia presented a clear example of how it regulates, monitors, allocates and reports industrial water use. Industry and provincial regulators felt strongly that provinces and territories should lead regional water monitoring. More baseline information is required for the Northwest Territories to develop effective water management tools.

During the exploration phase, industry will ship fluids and other drilling waste to Alberta for disposal. Transporting waste out of the Northwest Territories on the winter road system appears to be an adequate temporary solution; however, industry emphasized that in order to advance to production, a made-in-the-north water treatment or disposal system must be found.

Deep well injection, pumping wastewater back underground, is the preferred disposal method. Certain jurisdictions regulate disposal wells to ensure environmental protection. The committee learned that these wells must be located in areas where natural and technical barriers can create a secure disposal site. The layers of rock above disposal zones must be tested and monitored to ensure that contaminants do not migrate. Proponents highlighted that if a water treatment plant is established, it must be designed specifically for the oil and gas industry.

The Canadian Association of Petroleum Producers has introduced principles and guidelines for industry that include detailed requirements for fracturing fluid additive disclosure and

management, baseline groundwater testing, wellbore construction, water sourcing and reuse, and fluid handling transport and disposal. Alberta and British Columbia also have well-established regulations for all phases of the drilling process.

Recommendation 3

The Standing Committee on Economic Development and Infrastructure recommends that the Government of the Northwest Territories adopt standards for all phases of the drilling process and include these in its policy framework, and strongly recommends these standards be incorporated into regulation at the appropriate time.

I will now turn the floor over to my colleague Mr. Bromley.

Thank you, Mr. Menicoche. Mr. Bromley.

Thank you, Mr. Speaker. Meetings with industry helped the committee establish confidence that proponents will apply their best expertise to development in the central Mackenzie Valley throughout the drilling process. However, the committee insists that environmental and technical challenges require made-in-the-north solutions, as presenters in Calgary also emphasized.

The central Mackenzie Valley is home to many species of wildlife. Land consumption and disturbance, habitat fragmentation, and noise pollution are areas of serious concern for Members as well as for the people of the Northwest Territories. Strategies to monitor the impacts of industry on wildlife and habitat should include the development of independent and project-specific environmental monitoring. The committee highlights the need for comprehensive land-use planning in any area where oil and gas development is contemplated. In the absence of finalized land use plans, area management plans may facilitate both the protection of the natural environment and efficiency in the development of key infrastructure.

Recommendation 4

The Standing Committee on Economic Development and Infrastructure recommends that the Government of the Northwest Territories include in its policy on hydraulic fracturing the implementation of environmental monitoring and area management plans.

Absent from presentations during the Calgary study tour was discussion of a comprehensive approach to greenhouse gas emissions related to oil and gas production. These emissions are significant and need to be managed. Best practices are available to limit air pollutants. The Government of the Northwest Territories has the authority to uphold provisions in its Greenhouse Gas Strategy, and

should take into account greenhouse gas emissions related to oil and gas development in its emissions targets and management objectives. Both Alberta and British Columbia report and publish volumes of flared and vented gases, and the Northwest Territories could adopt a similar requirement and require mitigation.

Recommendation 5

The Standing Committee on Economic Development and Infrastructure recommends that the Government of the Northwest Territories include greenhouse gas monitoring and mitigation measures in its policy on hydraulic fracturing.

Mr. Speaker, I will now turn the floor over to my colleague, with your permission, Mr. Nadli.

Thank you, Mr. Bromley. Mr. Nadli.

Public Engagement

Thank you, Mr. Speaker. Northerners are concerned about the use of hydraulic fracturing, as evidenced by participation in public information sessions and frequent northern media coverage on this issue. Due to anti-fracturing activism and political controversy that surrounds shale resource development, the public has varying views and concerns about the unconventional drilling process. Regulators agreed that public concern and criticism provide opportunities to improve the regulatory system and promote good public policy. Along with proponents, they stressed the need for significant public engagement. British Columbia, with the support of the Canadian Association of Petroleum Producers, is moving toward requirements for full public disclosure of industry activities, including well sites and the chemical composition of fracturing fluids. The committee highlights the province’s fracfocus.ca initiative, a website designed to provide objective information on hydraulic fracturing, and related oil and gas activities and regulations across Canada. The committee agrees the Government of the Northwest Territories should support and consider future contribution to this valuable public resource.

Recommendation 6

The Standing Committee on Economic Development and Infrastructure recommends that the Government of the Northwest Territories undertake meaningful public consultation in the development of a policy on hydraulic fracturing.

The committee is of the view that the general public and residents in the area where hydraulic fracturing is planned need to be kept informed of industry’s activities and afforded the opportunity to benefit from resource development taking place on our lands.

Recommendation 7

The Standing Committee on Economic Development and Infrastructure recommends the Government of the Northwest Territories include in its policy on hydraulic fracturing requirements for fair and transparent communication and opportunities for public engagement throughout all phases of the development of shale oil and gas projects.

I will now turn the floor back to the chair of the committee, Mr. Hawkins.

Thank you, Mr. Nadli. Mr. Hawkins.

Conclusion

Thank you, Mr. Speaker. In areas where legislated authority does not exist, it is the committee’s view that the Government of the Northwest Territories must exercise its moral authority to represent and act in the best interest of the people of the Northwest Territories, and promote sound management of our land and resources. The Government of the Northwest Territories has long experience in ensuring that residents’ voices are heard in resource development initiatives, but the time has come for it to assume responsibility for more active policy development as well.

The Calgary study tour and preceding information-gathering helped Members better understand the challenges and opportunities for the further development of the central Mackenzie Valley shale resource play, and the high priority of addressing these issues. In its exploratory phase alone, oil and gas development is generating significant activity in Sahtu communities. The sustainability and success of this industry relies on how the Northwest Territories responds to the risks and opportunities at hand and the steps we take to ensure adequate environmental and geological information, public involvement and regulatory processes before production. To facilitate production in the most socially, environmentally and economically responsible way, the Northwest Territories must establish its own policy to guide the practice of horizontal drilling and hydraulic fracturing within its jurisdiction.

Recommendation 8

The Standing Committee on Economic Development and Infrastructure recommends the Government of the Northwest Territories provide a comprehensive response to this report within 120 days that includes a plan to develop a policy on hydraulic fracturing.

Mr. Speaker, that concludes the report of the Standing Committee on Economic Development and Infrastructure on the August 2012 Hydraulic Fracturing Study Tour.

I move, seconded by the honourable Member for Deh Cho, that Committee Report 6-17(3) be received by the Assembly and moved into Committee of the Whole for further consideration.

---Carried

Thank you, Mr. Hawkins. Mr. Hawkins.

I seek unanimous consent to waive Rule 93(4) and move Committee Report 6-17(3) into Committee of the Whole for today. Thank you, Mr. Speaker.

---Unanimous consent granted

Committee Report 6-17(3) will be moved into Committee of the Whole today. Thank you.

Item 13, reports of committees on the review of bills. Item 14, tabling of documents. Mr. Abernethy.

Thank you, Mr. Speaker. I wish to table the following two documents, entitled Department of Justice Strategic Plan, Five-Year Implementation Strategy, 2012-2017, and the 2011 Public Service Annual Report. Thank you.

Thank you, Mr. Abernethy. Mr. Lafferty.

Mahsi, Mr. Speaker. I wish to table the following document, entitled Annual Report on Official Languages, 2011-2012. Mahsi.

Thank you, Mr. Lafferty. Minister Ramsay.

Thank you, Mr. Speaker. I wish to table the following three documents, entitled NWT Business Development and Investment Corporation Annual Report, 2011-2012; BDIC NWT 2012-2013 Corporate Plan; and GNWT Support to the NWT Film and Media Arts Industry Progress Report. Thank you.

Thank you, Mr. Ramsay. Mr. Beaulieu.

Mahsi cho, Mr. Speaker. I wish to table the following document, entitled Measuring Success and Focusing on the Results, NWT Health and Social Services System, 2011-12 Annual Report.

Thank you, Mr. Beaulieu. Mr. Dolynny.

Thank you, Mr. Speaker. I wish to table various documents pertaining to my analysis of the E3 School. Thank you.

Thank you, Mr. Dolynny. Item 15, notices of motion. Item 16, notices of motion for first reading of bills. Item 16, motions. Mr. Bouchard.

Thank you, Mr. Speaker. WHEREAS Section 48(1) of the Human Rights Act provides for the establishment of an adjudication panel composed of at least three persons, appointed by the Commissioner on the recommendation of the Legislative Assembly;

AND WHEREAS Section 48(5) of the Human Rights Act provides that the members of the panel hold office, during good behaviour, for a term of four years, with the exception of the first members appointed;

AND WHEREAS the appointments of two of the adjudication panel members expired on October 31, 2012;

AND WHEREAS the Board of Management has considered a number of qualified individuals for appointment as adjudication panel members;

AND WHEREAS the Board of Management is tasked with recommending individuals to the Legislative Assembly, and the Legislative Assembly is prepared to make a recommendation to the Commissioner;

NOW THEREFORE I MOVE, seconded by the honourable Member for Mackenzie Delta, that the following persons be recommended to the Commissioner of the Northwest Territories for appointment as members of the Human Rights Adjudication Panel, effective November 5, 2012, for a term of four years:

Mr. Louis Sebert of Fort Smith; and

Mr. Sheldon Toner of Yellowknife.

Thank you.

Thank you, Mr. Bouchard. Motion is in order. To the motion.