Thank you for the opportunity to speak to Bill 11, the Petroleum Resources Act. The passage of this legislation will be another step towards implementing the Northwest Territories Lands and Resources Devolution Agreement.
The Department of Industry, Tourism and Investment will administer the Government of the Northwest Territories’ new authorities under the Petroleum Resources Act.
Under the Devolution Agreement, the GNWT is obligated to substantially mirror Canada’s statues and regulations that are being repealed or made inapplicable to lands transferring to the GNWT through devolution.
The mirroring exercise means that the new GNWT laws will address the same matters, in substantially the same way, as federal laws do now. Mirroring principles limited changes to addressing issues such as outdated language and applying GNWT drafting standards.
Mirrored legislation is a practical first step to ensure a continued delivery of services on April 1, 2014. Mirrored legislation also ensures that there are no
legislative gaps or overlaps between GNWT and federal legislation.
The parties to the Devolution Agreement entered into a Protocol for Review of Devolution Legislation. Under this protocol, all parties had the opportunity to review and comment on this legislation before it was introduced in the Legislative Assembly. We have considered these comments carefully in the preparation of the bill before you.
The Petroleum Resources Act will govern the leasing of GNWT-owned oil and gas rights to companies that wish to find and produce the oil and gas. This includes all GNWT-owned oil and gas rights in the onshore of the NWT, right up to the onshore/offshore boundary negotiated by Canada and the GNWT. It does not include lands that will be retained by the federal government such as waste sites and the Norman Wells Proven Area.
Rights leased to a company under the Petroleum Resources Act will give the company the right to explore and, if successful, to produce oil and gas owned by the GNWT on behalf of the residents of the NWT.
Under the Petroleum Resources Act, oil and gas rights in unexplored areas will be issued after a public call for bids. The Minister may attach conditions to the transfer of rights including conditions for protecting the environment.
The Petroleum Resources Act will also establish an Environmental Studies Research Fund to pay for environmental and social studies necessary to inform decisions on whether oil and gas exploration or development should be carried out in a particular area. Oil and gas companies exploring in the NWT must make payments into this fund.
The proposed Petroleum Resources Act and Oil and Gas Operations Act each state that no work or activity on petroleum lands shall be authorized until the Minister has approved or waived the requirement of approval of a benefits plan.
Finally, the Petroleum Resources Act will allow the GNWT to prescribe the royalties that companies must pay to the GNWT once commercial production is achieved.
I would be pleased to answer any questions Members may have. Thank you.