Fueling Inuvik's economy

Posted: Tuesday, August 15, 2000

INUVIK, NORTHWEST TERRITORIES - Inuvik, the Arctic town that government built, could come to be known for its industry.

Town leaders are poised for a massive project that could alter Invuik's population and economic profile radically. The project is a natural gas pipeline running from Alaska's North Slope, through Arctic waters and then back on shore through the Mackenzie Delta and south along the Mackenzie River toward the Lower 48.

Going the other direction, Inuvik construction company owner Guy Pemberton is making inroads with housing projects in Alaska, part of a broader effort by Northwest Territories business and government leaders to forge ties with the state and develop economic opportunities here.

And like many Alaska towns, Inuvik has come to rely on tourism to even out the ups and downs of natural resource development and government programs. For vacationers who don't find even Alaska extreme enough, Inuvik offers Arctic Ocean tours departing from the end of the Dempster Highway, a 450-mile gravel road that cuts through otherwise untouched wilderness.

An Arctic experiment

Inuvik was developed by the Canadian government in the late 1950s as an administrative center for the western Arctic, serving as a hub for education, medical care, military operations and various government programs. It was dedicated by Canadian Prime Minister John Diefenbaker on July 21, 1961, although it did not get official town powers until nine years later.

"Right from the word go, it was a new, novel Arctic town," said Dick Hill, a former 32-year resident of Inuvik who was its first mayor and co-founder of its chamber of commerce, and who has become regarded as its historian.

There was a genuine frontier spirit in the early days, Hill said.

 

Neighborly network: Guy Pemberton, CEO of Dowland Contracting in Inuvik, is looking to Alaska for new projects.

BILL McALLISTER / THE JUNEAU EMPIRE

"If you didn't like it, you could go back home," he said. "Then people started being born there, so we lost that edge.''

Hill said the population was about 600 in 1963, when he relocated from Toronto to head a federal research laboratory in Inuvik. It peaked at about 4,000 in the mid-1970s during the height of petroleum exploration.

Now, the official count is 3,296, of which about 60 percent are Native. The town logo includes a teepee and an igloo to represent Natives, most of whom are Inuit, and a house to represent non-Natives. Gold bands from the midnight sun symbolically unify the ethnic groups.

 

Profitable pipling: Nellie Couroyea, chair and CEO of Inuviaut Regional Corp., expects Native groups in the Northwest Territories to profit from development of a natural gas pipline.

BILL McALLISTER / THE JUNEAU EMPIRE

As Inuvik looks to the future, it's no surprise that attention turns to Alaska, Hill said.

"Our stage of evolution is roughly 10 years behind Alaska. ... Anything Alaska has been interested in, we've been interested in," he said.

"I think there is a natural liaison between Alaska and NWT," said current Mayor George Roach.

Just within the timberline, 60 miles south of the Arctic Ocean, Inuvik - an Inuvialuit word meaning "The Place of Man" - originally was serviced only by air and by barges on the Mackenzie River.

Despite Inuvik's isolation, active oil and gas exploration in the Beaufort Sea and Mackenzie Valley pumped a lot of money into the local economy and offered the promise of a thriving industrial base in years to come. But after oil was struck at Prudhoe Bay in Alaska, the pipeline route went to Valdez, a big disappointment in the NWT. Later, there were attempts to tap suspected natural gas reserves near Inuvik. In the late 1970s, the Dempster was completed in anticipation of a gas pipeline. But that pipeline also fizzled, due to low demand and low prices.

The wheel spins

Now local leaders think it finally might be their time.

As a result of the BP Amoco and Atlantic Richfield merger, new contractual relationships among players on the North Slope have increased the incentive for commercializing natural gas reserves there, even as the market for natural gas brightens. With additional reserves near Inuvik, many NWT leaders are getting behind a plan - being pushed by Arctic Resources Co. of Calgary and Houston - to take a pipeline offshore from the North Slope and bring it back through the Mackenzie Delta and then through the valley to British Columbia, tying into the existing North American grid.

There are competing pipeline routes being proposed, although some say there's enough gas for two pipelines. Gas reserves are estimated at 9 trillion to 11 trillion cubic feet near Inuvik, or about a third of what generally is assumed to be available on the North Slope. Canadians consume about 2.9 trillion cubic feet a year.

In what some here see as a good omen, local energy bills are dropping with the completion of a local natural gas project by the Inuvialuit Regional Corp. The Native corporation's 50-kilometer pipeline means an end to complete reliance on oil shipped in from the south.

"So suddenly, Inuvik is - from an energy perspective, anyway - a self-sufficient community in the north, which is very rare," said Patti Black, outgoing general manager of Western Arctic Business Development Services, a non-profit organization that provides counseling, training and financing for small businesses. "So that was kind of a beginning. I think we saw a lot of construction from that. ... The pieces were starting to fall into place."

Since then, various oil and gas interests are moving in for seismic studies and other technical work this winter.

"So suddenly, there's all this activity in town," Black said. "Houses are snapped up. There is no office space in town left anymore. People's optimism is there. We're seeing lots of activity on the loan front for small businesses. And support services for all this activity, everything from food to heavy equipment to all of that stuff."

"There's millions of dollars being spent now," said Roger Israel, manager of trade and investment for the Inuvik office of NWT's Department of Resources, Wildlife and Economic Development. "There's talk of 100-man camps this winter."

"This talk of a major pipeline has boosted everyone's spirit," Roach said. "I think everybody's pro-development, that I've talked to."

Natives play key role

The settling of Native land claims since the last period of pipeline speculation in the western Arctic has improved the odds for such a project significantly, observers say.

Nellie Cournoyea, CEO and chairwoman of the Inuvialuit Regional Corp., which oversees a 1984 settlement, said that aboriginal groups throughout the Mackenzie Valley are working on issues associated with their potential joint ownership of a pipeline and their equity shares in the project. Natives own much of the land that has proved or suspected gas reserves, and that lies along the proposed pipeline route.

"We're not tied to any oil company or any pipeline group at the moment," Cournoyea said. "They're beating down our doors. But I've been fairly adamant we have to get our own house in order."

Recently, the Native corporation approved the lease of four tracts for exploration to three oil and gas companies.

Company courts Alaska

Meanwhile, Pemberton, CEO of Dowland Contracting, is turning his attention west. The firm, which has 50 employees, has been contracted to build a senior citizens complex in Stebbins in western Alaska, and has an opened an office in Anchorage from which to pursue additional opportunities in the state. Dowland's approach to construction projects in extreme climates includes drawing upon the local labor force in the remote communities it serves.

Part of an NWT delegation that visited Juneau and three other Alaska cities in the spring, Pemberton said he was encouraged by the reception from Alaska legislators and chamber of commerce officials. "It was very useful. ... I see a very bright future for us over there. We're serving a market that doesn't seem to be of much interest to contractors in Alaska. Bush work doesn't appeal to many people."

Pemberton also hopes to supply support services for a gas pipeline in the NWT.

Visitor industry on rise

Government employment in Inuvik remains high - about 30-40 percent, by some estimates. But the closure of the 385-person military base in the mid-1980s was the beginning of the downturn of the public sector. Additional budget cuts in the 1990s have continued the trend.

To a large extent, tourism has picked up the slack. Initially, the Dempster was a road for commercial traffic. But bus tours and then independent travel have brought in an increasingly diverse group of visitors.

There are about 6,000 tourists annually, said Israel, the government trade official. The local infrastructure could accommodate 20,000, and the challenge is to expand the season, he said. One limitation: Due to two ferry crossings along the NWT portion of the Dempster, the road cannot be traveled during the fall freeze and spring breakup.

At City Hall, tourism coordinator Brian desJardins is trying to increase off-season convention traffic and make better use of the Midnight Sun Recreation Complex, completed in 1997. A conference of non-profit organizations in March brought 300 delegates, a record. There will be a session of the NWT Legislative Assembly in September.

"I don't think they've ever had a caucus meeting anywhere else other than Yellowknife, where their chambers are," desJardins said. He also has lined up the 2003 annual meeting of the NWT Association of Municipalities.

The challenge for Inuvik with the hoped-for natural gas boom is to maintain the visitor industry that has been built up, desJardins said.

"Inuvik has experienced a couple of boom-busts already, with oil and gas," he said. "I think this time, if it happens, all levels of government should be planning for the boom-bust, so that when Inuvik booms again that we should be prepared for the bust. ... If these guys are going to come in and siphon out all the natural resources, then they should be prepared to invest money in the community, too."

Black, the small business official, said: "My fear is that all of the other work we've been doing in the last few years will be lost in this gas swell. I think our challenge will be keeping that stuff alive and moving along."



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