Leaders from the Northwest Territories are touring the booming Bakken region of Saskatchewan and North Dakota to get a taste of what might be in store if the territory's own shale oil play takes off.
David Ramsay, the minister in charge of resource development in the territory, said Thursday that the economic impact has been apparent, from the brand new trucks driving around Estevan, Sask., to the homes, roads, hotels and offices under construction south of the border.
The potential jobs created by developing the Canol shale formation in the Central Mackenzie Valley would be welcome in a region plagued by high unemployment. But there are challenges well, such as a higher cost of living and increased pressure on government services.
Government officials in North Dakota and Saskatchewan had some advice for the Northwest Territories.
"The main thing they've said to us over and over again is just prepare yourself, get ready. The more upfront work you can do, the better off you'll be," Ramsay said in an interview from Williston, N.D.
"They're saying if they could do it all over again, they'd plan better and that's what we're trying to do."
Joining Ramsay on the tour were representatives from the towns of Normal Wells, Tulita and Fort Good Hope, as well as the MLA for the Sahtu region, where the Canol is located 2.5 kilometres underground.
The delegation viewed a hydraulic fracturing operation in action. That method — which would be used in the Canol — involves drilling long horizontal wells deep underground and cracking the rock with a mixture of high-pressure water, sand and chemicals.
Ramsay, whose portfolios include industry, tourism investment and transportation, said he's confident that hydraulic fracturing, or fracking, can be done safely in the Central Mackenzie Valley, although drilling into permafrost would pose a challenge that operators in the Bakken don't have to deal with.
"A big part of this is to let people back in the Northwest Territories know that we're talking to other jurisdictions that have experience with hydraulic fracturing and it's not an issue and it shouldn't be an issue for us," he said.
"It can be done in a safe manner. That's the message that we really need to deliver."
Development of the Canol is in its very early stages, with the first horizontal wells set to be drilled this winter.
Companies such as Imperial Oil (TSX:IMO), Royal Dutch Shell Shell, ConocoPhillips, MGM Energy (TSX:MGM) and Husky (TSX:HSE) have already committed to spend a combined $630 million on drilling.