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Good afternoon, Ladies and Gentlemen. It is a pleasure for me to be here with you today and to have an opportunity to talk to you about our continental energy security and the North’s role in it.

I’d like to begin by thanking the Institute for this forum and to recognize my fellow presenter Drue Pearce. Also joining me this afternoon is my colleague Mr. Jackie Jacobson, Member of the Legislative Assembly in the Northwest Territories who represents the constituency of Nunakput.

Ladies and Gentlemen, North America is faced with a number of serious energy challenges including - ensuring a secure, affordable supply of oil and natural gas, - managing the impacts of global climate change - and protecting our Arctic regions from the territorial claims of other countries.

I would like to talk about three different aspects of energy security today and show how, while we may think we are using the same words – “energy security” – the term often means quite different things to our two countries.

For you here in the Lower 48, energy security really means security of supply, ensuring you have enough coal, natural gas and oil to meet your seemingly ever-increasing energy needs.

While you certainly have sufficient coal reserves to meet your needs which is primarily for electricity generation. The public acceptance of the environmental impacts of this fuel source is changing rapidly and while you may have the reserves, you likely will not get to use all of them, and certainly not at the relatively low price of today.

In terms of natural gas, while your conventional reserves are in decline. So are the reserves in southern Canada. We are seeing increasing volumes of shale gas and LNG in the market but it is expected that these will not be enough to deal with demand.

But, it is when it comes to oil that the concerns about supply really hit home. The United States currently imports nearly 60 % of its oil needs, and projections from the EIA show this continuing for years to come making you more and more dependent on foreign, oftentimes unfriendly regimes.

How America has handled this last concern has tended to vary with the nature of the Administration, with Republicans generally favouring efforts to increase supply and Democrats looking to lowering demand.

Sadly, neither effort has been successful and it is a regrettable fact of your situation that imports continue to rise and viable alternatives to liquid petroleum products for transportation continue to elude you.

From a Canadian perspective, the problem of energy security is almost exactly the opposite of yours. Our long time concern, particularly in regards to the American market, our biggest foreign market, is ensuring security of demand.

We are as a country blessed with abundant petroleum resources, well in excess of our domestic needs, and the only way to fully monetize these reserves was to sell them to others. But, what others? Given the location of our most plentiful oil and natural gas reserves, Alberta and Saskatchewan, both located far from tidewater, the obvious market was to the U.S. by truck, rail and pipeline.

Over the years we have fought to secure open access to your markets and, with time, and the North American Free Trade Agreement, we were able to do so. Of your current petroleum demand of over 20 million barrels a day, Canada supplies some 12%, making us your number one supplier. In the case of your natural gas needs, once again we are your largest supplier, contributing some 16% of your daily demand.

This access to the U.S. market allowed Canada to develop its resources in a manner that simply would not have been possible were we restricted to filling only our domestic needs.

This access enabled us to grow the economies of our western provinces by producing their oil and natural gas and the economies of our central Canadian provinces as equipment suppliers to these producers.

But, the demand may not be so secure tomorrow. And this is primarily because there is yet another energy security issue, this time one where we have the same perspective.

Climate change is now broadly recognized as a serious environmental threat and the role played by greenhouse gas emissions in this threat has been forcefully set out by government agencies like the EPA, by environmental groups and, indeed, by the U.S. Supreme Court.

While both our countries have in the past often approached this issue prepared to accept trade-offs between access to low cost fuels and the possibility of environmental damage, we can no longer afford to do so. In fact, proposed legislation in your country and, eventually, in ours, will ensure that we no longer can make this trade-off.

The House energy bill commonly known by its sponsors’ names as Waxman-Markey, more formally “The American Energy & Security Act of 2009” will, among other things, impose a low carbon fuel standard that will require increasingly stringent reductions of the life cycle greenhouse gas emissions of all transportation fuels that are “produced, refined, blended or imported “ in the United States.

Although these initiatives are aimed at the reduction of greenhouse gasses, they could likely drive an increase in demand for cleaner burning natural gas. The current US Administration is actively pursuing a move to a low carbon economy, which will place even greater demands to find, develop, produce, and transport Natural Gas Resources globally

This new-found focus on the environment, with implications for Canadian energy sales to the United States, is already spreading beyond oil and natural gas to include electricity.

So the issue for you has been security of supply; for Canada, it has been security of demand. These are broad public policy issues and, when coupled with environmental concerns, will require some hard decisions by the leaders of both our countries.

Your energy security is, and will remain, dependent on access to the resources of other countries under terms and conditions that do not impose too great a burden on your balance of payments and your economy.

We, on the other hand, know that much of our energy security is dependent on continued access to your market, again under terms and conditions that do not impose too great a burden on the selling price of our commodities.

It is clearly in both our interests to continue to work together on these energy issues in order to ensure that we continue to grow our economies while protecting our environment.

And now, Ladies and Gentlemen, let me take you to where I live, to the Arctic where the impacts of the changing climate are immediate and the need for development is most pressing.

The Northwest Territories of Canada, like Alaska, has the oil and natural gas reserves needed to help ensure a secure, environmentally sustainable energy future for North America.

The Mackenzie Gas Project, one based on the known reserves of the Mackenzie River Delta, and the Alaska Highway Pipeline could, when completed, deliver a combined 6 billion cubic feet or more of clean burning natural gas each and every day, for years to come.

This natural gas could help to maintain the continent’s self-sufficiency in conventional natural gas relieving us of the need to depend on either environmentally challenging shale gas or foreign sources from across the oceans. Sources like Gazprom, that deliver in ships that can be diverted away from our shores to satisfy the changing economic interests of the seller.

Environmentally, this Arctic natural gas, when used to generate electricity, would produce far fewer emissions than the coal currently used in far too many of our plants in both Canada and the United States.

Unlike coal, this Arctic natural gas is already clean. And, it is more efficient, producing nearly twice the energy per unit of coal.

From the perspective of northern people, a switch from coal to natural gas is more than an economic gain, it is an environmental necessity.

We are the ones who are most immediately impacted by climate change, the ones whose lands are feeling the brunt of the warming climate, whose wildlife face an uncertain future and whose world is changing faster than any of our elders ever imagined possible.

We northern people do not need the Environmental Protection Agency to make an endangerment finding, we can see the danger all around us and we need to actively respond by getting our gas to market to help replace the coal now being used to generate electricity.

The Government of the Northwest Territories has been working for the past ten years to support the Mackenzie Gas Project.

I must now confess to some frustration at the slow pace with which the project is proceeding through the regulatory phase, a pace that could very well seal the fate of the pipeline.

While we have always maintained that the North American market can absorb both our projected supply of some 1.2 billion cubic feet per day and the much larger 4 billion daily cubic feet of the Alaska Project, we have also maintained that our natural gas would need to get to market first in order to avoid being shut in by the larger one.

For us, this is a true security of demand issue. If the demand for more continental gas is filled by the Alaska Project, we lose our markets and with them, a significant opportunity to develop our economy.

I am aware of the recent progress in the Alaskan Project with Exxon apparently choosing to join with TransCanada Pipelines over the competing Denali Project. This can only be good news for Alaska and for the project proponents.

American governments, both the federal administration and the State of Alaska, have long supported the construction of the Alaska pipeline with regulatory certainty, loan guarantees and financial incentives. For this, I congratulate them – this help is rightly an appropriate role for government in the development of new, untested infrastructure.

I can only encourage, as strongly as possible, Canada’s federal government to follow their lead.

On a more positive note, let me now turn to our northern oil resources.

Arctic Canada’s oil potential is vast and we expect that as we work to prove up our reserve base we will become more and more a secure source of supply for the continent.

Our Beaufort Sea geology, like that off the coast of Alaska, is promising and companies are actively pursuing two exploration plays in our northern waters that we believe could result in a new era of Arctic development.

The two companies, Exxon and BP, have committed over 2 billion dollars to this exploration effort. These are sums that speak loudly about the potential of our offshore.

I believe that we will get to develop these deep water offshore resources and become a valuable supplier to world oil markets.

We have had experience in the Canadian Beaufort Sea in the past in exploring, producing and shipping by tanker and this experience will serve us well as we re-visit this area and open up yet another basin.

Unlike the waters off the coasts of Alaska, we have been able to explore in our waters with little threat of legal challenges and, given the regulatory regimes we have in place to manage the Canadian Beaufort, I expect industry will be able to continue to work as freely as it has in the past.

And while all this development takes place, while our natural gas reserves are developed, our pipelines built, our offshore explored, our governments work to build the required roads, airstrips and other supports, our people put gainfully to work, we send a clear message that while these resources are owned by the people of the NWT and Canada, and our rules will apply, we welcome the work of others in helping us to develop them for our continental benefit.

The continent’s northern reaches can help to ensure the energy security needed by the south and can help to provide the border security needed in uncertain times.

We can also play a significant role in helping to ensure the continued recovery of our economy from the challenges it is currently facing.

Development of the north’s resources will generate hundreds of millions of dollars in wages, billions in capital expenditures that will be felt throughout Canada, untold royalties and taxes for government, and a stronger economic future for our young people.

I began by saying that our two countries have had a somewhat different perspective on energy issues, with supply long being your main concern and demand, ours.

But, I would argue that more than ever we are linked by a common concern for the environment, for continental energy security and for economic recovery.

Our joint goal should be -a secure supply of energy rather than the threat of continued disruptions; - a clean planet for our children’s children; - a new beginning for our economies; - and a continued control over our northern reaches rather than the claims of others.

These are the challenges the continent faces and we northerners, the ones most exposed to them, are also the ones in the best position of helping to solve them. We believe we are up to the task.

Thank you again for the opportunity to speak with you this afternoon.