Thank you.
I think our name has changed recently in the last few months. It's Aboriginal Affairs and Northern Development Canada now. Thank you.
I am pleased to have this opportunity to share my department's perspective on oil and gas developments and future plans in Canada's north, where there is large oil and gas potential.
The federal approach to economic development promotes responsible oil and gas exploration and development, producing jobs for today and generating long-term social, cultural, and economic dividends for aboriginals and northerners well into the future. It also supports development that employs effective environmental stewardship practices. This ensures that development occurs in a way that respects the traditions of aboriginal communities and safeguards the Arctic's environment for the benefit of future generations.
The Department of Aboriginal Affairs and Northern Development is responsible for issuing rights in the Northwest Territories, Nunavut, and in offshore areas north of the 60th parallel. The northern oil and gas program operates under the Canada Petroleum Resources Act and the Canadian Oil and Gas Operations Act. The Minister of Aboriginal Affairs and Northern Development shares responsibility for both these acts with the Minister of Natural Resources. The National Energy Board is responsible for most of the application of the Gas Operations Act in Canada. Therefore, responsibilities are separated as follows: the economic decisions lie with the department and the minister, and the safety and environmental decisions lie with the regulator, the National Energy Board.
Officials in our offices work to create the conditions and positive investment climate that enable the private sector to successfully compete in the north. There's a well-established, market-driven oil and gas rights issuance process precisely to advance this objective.
The department relies on foundational relationships established in land claim agreements with aboriginal groups to support our management of hydrocarbon resources in the north. Prior to initiating each rights issue and cycle, our department undertakes consultations with aboriginal land claimants to seek their input on environmental and cultural sensitivities. We recognize that support by affected communities and aboriginal organizations is very important for those companies embarking on exploration programs on their newly acquired leases. For the past 25 years there has been an annual opportunity to obtain exploration rights through a competitive rights issuance process.
Community input and support is important in making these recommendations to our minister and obtaining ministerial consent. This process is equally advantageous for the business community. Industry tells us that the certainty of regular calls for rights issuance increases investment confidence in Canada's frontier lands.
Moreover, our government is working toward implementing devolution in the Northwest Territories. For the Yukon, the transfer of land and resource management responsibilities occurred in 2003. In Nunavut, we are continuing discussions towards devolution. Devolution will give northerners more local control of land management and resource development decisions. This will effectively bring natural resource decision-making closer to where natural resource development is being planned. It will also bring economic benefits.
If I may take another few minutes, I would like to turn to some of the more noteworthy oil and gas developments that are promising to reshape the north.
The year 2011 was the year that industry's rapidly growing interest in Canada's shale resources jumped 500 kilometres north of 60 to the central Mackenzie Valley. This was reflected in the issuance of new exploration licences in the Sahtu settlement region of the central Mackenzie Valley.
In June of last year, 11 new exploration licences were issued, based on bids of work expenditure commitments totaling $534 million over the next five years. By last fall, it was clear that petroleum companies acquiring these exploration licences were focusing on exploring shale formations, although there is also great potential for conventional oil and gas resources in the region.
New hydraulic fracturing technologies have the potential to make this vast reserve accessible, but this potential has to be proven by exploration before economics of shale development in this region can be evaluated. The department has organized information sessions so that northern communities are fully informed about shale gas exploration, the technology deployed, the regulatory processes, and regulations applicable for key issues such as water quality and use. The pace of development will be monitored and northerners will be provided with opportunities to raise and share their concerns. These activities currently represent the only oil and gas activities in the region outside of ongoing production operations at Norman Wells.
Renewed interest by industry in the area opens up new economic opportunities for employment, training and business.
Moving up to the Beaufort Sea and Mackenzie Delta, this region has proven to be particularly rich in petroleum resources, with more than 60 discoveries to date. Since 2007 several companies have been awarded deep-water exploration licences in the Beaufort Sea, with cumulative work commitments of almost $2 billion.
The events in the Gulf of Mexico two years ago resulted in a renewed public focus on safety and preparedness around the world. In Canada, the National Energy Board expanded an existing study to conduct a public review of offshore drilling requirements. You are probably aware of the NEB's December report. That report confirmed that the National Energy Board's regulatory regime can address matters related to safety of northerners, workers, and the environment. We're seeing renewed interest again this year. The industry has nominated six parcels, and the call for bids has just opened up and closes in September.
Only about one-fifth of the Arctic Ocean margin has been explored. Conventional oil and gas resources from the North account for approximately 33% of Canada's remaining conventionally recoverable resources of natural gas and 35% of the remaining recoverable light crude oil. Every year, the Northern Oil and Gas Branch submits an annual report on the administration of lands to Parliament. The latest report was submitted on May 2, 2012, and is available on the department website.
A key consideration in our consultations on oil and gas in the North is environmental stewardship. We need to provide public and departmental assurance that rights are issued responsibly, with due consideration for conservation issues and the north's environmental heritage. Science is important for supporting good decision-making.
We are always looking for innovative programs to advance responsible development and increase Canada's knowledge of the north. One example is the Beaufort regional environmental assessment, with funding of $21.8 million over four years. Its objective is to ensure that governments, the Inuvialuit, regulators, and industry are prepared for renewed oil and gas activity in the Beaufort Sea. These parties have all been at the origins of the assessment, right from its concept. Now in implementation, BREA is a unique partnership. It brings together Inuvialuit communities, industry, governments, academia, and regulators who work together to identify priorities and fund research in support of regulatory decisions. These are multiple benefits to this place-based partnership approach.
In conclusion, given the world-class oil and gas potential throughout the Arctic, it is important that this exploration continue responsibly and that northerners actively participate in and benefit from development.
Most of all, I want to reinforce the importance our department places on working in partnership. As the numerous examples I cited earlier demonstrate, it's the way we do business, because we know this is the key to long-term success. Through productive partnerships, we can unleash the extraordinary economic and social benefits of responsible oil and gas development for northerners and for all Canadians.
Thank you.