Oil and Gas

On this page:

• Production
• Trade and Transportation

Production

Crude Oil

• In 2023, Northwest Territories (NWT) produced 4.0 thousand barrels per day (Mb/d) of light crude oil (Figure 3). All production is from the Norman Wells Proven Area near the town of Norman Wells in the central Mackenzie Valley.
• NWT accounts for less than 0.1% of total Canadian crude oil production.
• NWT’s crude oil resources are estimated at 1.2 billion barrels.^Footnote 8
• Several exploratory wells were drilled for shale gas and shale oil exploration in the Central Mackenzie Valley from 2012 to 2015. There has been no activity since 2015. In addition, no wells are currently planned or operating in other parts of NWT, including the federal waters of the Beaufort Sea.
• In December 2016, the federal government announced that Canadian Arctic offshore, including the federal waters offshore of Nunavut, is indefinitely off limits to new offshore oil and gas licensing, to be reviewed every five years through a climate and marine science-based life-cycle assessment.
• In 2019, the federal government issued an order, expiring at the end of 2021, prohibiting all oil and gas activities in the Canadian Arctic offshore, including activities associated with existing licenses.^Footnote 9 This order was most recently amended on 8 December 2023 to extend the expiry date to 31 December 2028.^Footnote 10
• In 2023, the “Report of the Western Arctic Review Committee” was issued. This report was a science-based assessment of the risks and benefits of Arctic offshore oil and gas exploration and development.
• In 2023, the Government of Northwest Territories signed the Western Arctic – Tariuq (Offshore) Accord along with the Inuvialuit Regional Corporation, Government of Yukon, and Government of Canada. This accord ensures that northerners will share in the co-management of offshore oil and gas activity.

Refined Petroleum Products (RPPs)

• There are no refineries in NWT.

Natural Gas/Natural Gas Liquids (NGLs)

• In 2023, natural gas production in NWT was 4.9 million cubic feet per day (MMcf/d) (Figure 3). This represented less than 0.1% of total Canadian natural gas production.
• Natural gas is produced in two fields in NWT: Norman Wells and Ikhil, with Norman Wells accounting for most of the production.^Footnote 11 Natural gas has historically been produced at Cameron Hills in southern NWT, but production was suspended in 2015 for economic reasons.
• Natural gas production from Imperial’s Norman Wells is a byproduct of oil production, and the gas is used to generate electricity for the town of Norman Wells. Norman Wells began producing in the 1920s.
• Natural gas production from Ikhil began in 1999 to supply the town of Inuvik for space heating and power generation. Currently, the Ikhil field is in decline and is now a secondary source of natural gas supply for Inuvik who now rely on propane and LNG delivered from the southern provinces.^Footnote 12 In 2023, Ikhil produced 0.6 MMcf/d of natural gas. Prior to delivered LNG in 2013, Ikhil produced an average 1.5 MMcf/d.^Footnote 13
• The decline in gas production at Ikhil was a major driver behind the Inuvialuit Energy Security Project (IESP). The IESP is proposed to provide a secure source of energy for the town of Inuvik and the hamlet of Tuktoyaktuk from natural gas extraction from the TUK M-18 well in the Inuvialuit Settlement Region. The project also includes the construction of a plant to convert the natural gas into compressed natural gas and synthetic diesel for power and heating. The project would reduce the need for LNG and diesel delivered from southern provinces. The CER’s Commission approved the IESP in March 2024.^Footnote 14
• Southern NWT is estimated to have 48 trillion cubic feet of recoverable, sales-quality natural gas resources, mostly shale gas in the Liard Basin.
• There is currently no NGL production in NWT.

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Trade and Transportation

Crude Oil and Liquids

• The Norman Wells Pipeline transports crude oil production from NWT and northwest Alberta to Zama, Alberta, where it connects with the Alberta oil pipeline network (Figure 4). This CER-regulated pipeline has a current capacity of about 16 Mb/d but only transported an average of 5.0 Mb/d in 2023.
• There are no crude-by-rail facilities in NWT. However, a rail terminal at Hay River receives RPPs, such as gasoline and diesel, from Alberta. These RPPs are delivered to communities in NWT and Nunavut via barges that travel along Great Slave Lake, the Mackenzie River, and the Beaufort Sea.

Natural Gas

• Much of Inuvik’s population is reliant on natural gas and Inuvik Gas Ltd. is the operator of Inuvik’s local distribution system. Inuvik Gas Ltd. is regulated by the NWT Public Utilities Board.
• A 50 km pipeline connects Ikhil gas field to the town of Inuvik (Figure 5). The pipeline is jointly regulated by the CER and the Office of the Regulator of Oil and Gas Operations (OROGO) under the Northwest Territories' Oil and Gas Operations Act.
• The Mackenzie Gas Project was cancelled in December 2017 by project participants Imperial Oil, ConocoPhillips Canada, ExxonMobil Canada, and the Aboriginal Pipeline Group.^Footnote 15 The proposed project involved the development of three natural gas fields in the Mackenzie Delta and the construction of a 1,220 km gas pipeline (the Mackenzie Valley Pipeline) that would extend from the Mackenzie Delta to Alberta’s NGTL gas transmission system. The project was considered not economically feasible.^Footnote 16

Liquefied Natural Gas (LNG)

• Inuvik receives LNG via truck from several suppliers in Alberta and British Columbia. This LNG is used by NTPC’s Inuvik LNG facility, which began operation in 2013 and was constructed to store and re-gasify LNG for use in the Inuvik gas-fired power plant, reducing the need for electricity produced by diesel generators.

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Energy Use

Total Energy Consumption

• End-use demand in NWT was 17.5 petajoules (PJ) in 2020. The largest sector for energy demand was industrial at 45% of total demand, followed by transportation at 33%, commercial at 14%, and residential at 7% (Figure 6). NWT’s total end-use energy demand was the third smallest in Canada, and the third largest on a per capita basis.
• RPPs were the largest fuel type consumed in NWT, accounting for 13.2 PJ, or 76% of total end-use demand. Natural gas and electricity accounted for 3.1 PJ (18%) and 1.1 PJ (6%), respectively (Figure 7).

Refined Petroleum Products (RPPs)

• NWT’s motor gasoline demand in 2022 was 1,022 litres per capita, 1% below the national average of 1,035 litres per capita.
• NWT’s diesel demand in 2022 was 4,740 litres per capita, more than six times the national average of 772 litres per capita.
• Virtually all the gasoline consumed in NWT is produced in neighbouring provinces (primarily Alberta) and transported to NWT by truck, rail (to Hay River), and barge.
• A significant portion of NWT’s demand for diesel fuel is for space heating and power generation. Diesel-based power plants accounted for 68% of NWT’s total installed power capacity in 2021.
• NWT’s sparse population and limited transportation infrastructure limits the supply and increases the cost of heating and transportation fuels. The territorial government’s Fuel Services Division oversees the purchase, transport, distribution, and storage of fuels for 16 communities not served by private companies. Fuel Services also manages the purchase, transport, and storage of diesel for NTPC power plants in 20 communities on behalf of the NTPC.

Natural Gas

• In 2023, NWT consumed an average of 4.8 MMcf/d of natural gas, which represented less than 0.1% of total Canadian demand.

Electricity

• In 2020, annual electricity consumption per capita in NWT was 6.6 megawatt-hours (MWh). NWT ranked second last for per capita electricity consumption and consumed 55% less than the national average.
• NWT’s largest consuming sector for electricity in 2020 was commercial at 0.18 TWh. The residential and industrial sectors consumed 0.11 TWh and 0.01 TWh, respectively.
• Because of its low population density and expensive generation costs, NWT has some of the highest electricity prices in the country. Prices in many communities exceed 30 cents per kWh for the first 600 kWh, although prices vary across communities and utility companies.^Footnote 17

GHG Emissions

• NWT’s GHG emissions in 2022 were 1.35 megatonnes of carbon dioxide equivalent (MT CO₂e).^Footnote 18 NWT’s GHG emissions have decreased 12% since 2000, the first full year after part of NWT became Nunavut. Emissions have decreased 22% since 2005.
• NWT’s emissions per capita are the highest in the northern territories at 30.3 tonnes CO₂e, which is 67% above the Canadian average of 18.2 tonnes per capita.
• The largest emitting sectors in NWT are transportation at 46% of emissions, industries and manufacturing (excluding construction) at 28%, and buildings at 10% (Figure 8).
• NWT’s GHG emissions from the oil and gas sector in 2022 were 0.07 MT CO₂e, attributable to crude oil and natural gas production.
• In 2022, NWT’s power sector emitted 58,000 tonnes of CO₂e, which represents about 0.1% of Canadian emissions from power generation.
• The greenhouse gas intensity of NWT’s electricity grid, measured as the GHGs emitted in the generation of the territory’s electric power, was 180 grams of CO₂e per kilowatt-hour (g CO₂e/kWh) in 2022. This is a 36% reduction from the territory’s 2005 level of 280 g CO₂e/kWh. The national average in 2022 was 100 g CO₂e/kWh (Figure 9).