Montreal, 14 September 2010

In the session on Hydrocarbons from Arctic Sources at the 21st World Energy Congress, the various participants reached a consensus in their presentations on issues relating to an unconventional new source of recoverable natural gas, methane gas hydrates.

Yannick Beaudoin, director of the UNEP/GRID Arendal Shelf Programme, an international research initiative, reported major discoveries in marine continental shelf regions in the Arctic, including Canada and Russia, where deposits are particularly abundant. According to studies conducted under this program, methane gas hydrates from the Arctic represent a potential source of 53% of recoverable natural gas worldwide. However, these massive reserves pose a number of technological, environmental and regulatory challenges, not to mention the geopolitical aspects of operations in the context of current Arctic territorial claims.

Donna Kirkwood, of the Geological Survey of Canada, confirmed the recent discovery of significant quantities of methane gas hydrates in various parts of the Canadian Arctic, and addressed the vital role played by the geosciences in making informed decisions for responsible development of energy sources. She pointed to the need for accurate mapping of areas identified in order to establish a framework for relevant scientific research and provide updated assessments of energy resources. She stressed the importance of making Arctic populations more aware of, and securing their commitment to various development options, strict monitoring for environmental protection and promotion of social and economic development. "The Canadian Arctic has a huge energy potential, and in its development, economic imperatives must be combined environmental leadership and corporate social responsibility," she noted.

Bob McLeod, Minister of Tourism, Industry and Investment with the Northwest Territories Government, talked about energy reserves discovered in this territory, particularly in the Beaufort Sea, and discussed the McKenzie Gas Pipeline Project, which is now completing the regulatory planning process. Mr. McLeod identified the fiscal framework surrounding the project as the most difficult challenge and most important issue to resolve with the federal government. He pointed out the very significant impact energy resource development will have on Arctic populations, and stressed the need for the federal government to implement strict environmental measures, contribute to infrastructure improvement in northern communities and establish adequate manpower training programs in the territory.

Lesil McGuire, Senator from the State of Alaska, gave a brief history of energy resource exploitation in the state and mentioned significant exploitable resources, especially in the continental shelf. In addition, the Senator deplored long delays in issuing operating licenses, as well as the U.S. federal moratorium on drilling concessions in the State, which is a point of contention between the two levels of government. The Alaskan government has instituted incentive programs for exploration and development which, in the Senator's opinion, are being hampered by federal government decisions. The delays this creates and resulting decline in production could jeopardize the use of the Trans-Alaska Pipeline, which requires a sufficient volume to remain technologically viable.

The discussion that followed the presentations, chaired by Mr. Alan W. Page, Global Energy leader at PriceWaterhouseCoopers, focused on the vast potential the Arctic possesses for the exploitation of methane gas hydrates. Participants discussed the importance of future exploitation of this new resource being guided by caution, good environmental management and sensitivity to the interests of the local population, which could benefit from this new source of energy as a replacement for the diesel now used extensively in these communities. In response to a question from the audience, Mr. Beaudoin indicated that research on methane hydrates is currently being carried out at sea at depths of 600-800 metres, and not in the permafrost, where greenhouse gases emissions would be much greater.

Ends --

The 21st World Energy Congress is organized by the World Energy Council (WEC). www.wecmontreal2010.ca