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NWT eyes alternatives to costlier diesel power in small communities

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CALGARY - Several months after the town of Inuvik, N.W.T., began trucking in liquefied natural gas to generate some of its power, the territorial government wants to do the same in smaller communities that continue to rely on dirtier and costlier diesel.

But David Ramsay, whose cabinet responsibilities in the Northwest Territories government include investment and industry, said the long-term ambition is to have the territory's own vast undeveloped natural gas resources be consumed both by its citizens and by those in markets to the south.

"We've got to try and get communities off of diesel," Ramsay said in an interview from Sudbury, Ont., where he brought up the topic with fellow provincial and territorial natural resources ministers.

The Northwest Territories Power Corporation says LNG costs about 10 to 15 per cent less than diesel and reduces greenhouse gas emissions by about 25 per cent.

The corporation says as of last November, one of Inuvik's two power plants has been running on LNG. A natural gas well supplied that plant for more than a decade before it ran dry in 2012. Diesel was used while the corporation looked for an alternative fuel source.

The LNG is being trucked all the way from the Vancouver area, Ramsay said.

"We've been successful in Inuvik on retrofitting a power plant there to LNG and there's other opportunities in that regard," said Ramsay.

"So we're going to continue to look for opportunities to get our communities off of diesel."

The irony is that trillions of cubic feet of natural gas lie in fields near the coast of the Beaufort Sea, not far from Inuvik. A pipeline proposal to bring that gas to southern markets has been put on ice indefinitely, as gas from more easily accessible shale formations elsewhere in North America render Arctic supplies obsolete.

But Ramsay said he hasn't given up hope that oil and gas reserves in the Mackenzie Valley will find their way to market one day.

"That's a dream of ours we've had for 40 years — to have a gas pipeline down the Mackenzie Valley," he said. "Of course, that would certainly address a number of communities' energy needs down the Mackenzie Valley. That's important for us. We haven't given up hope or optimism that, at some point in time, Mackenzie gas will get to market and benefit communities along the way."

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