NWT Energy Facts

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					    NWT Energy Facts

                                                                                                               March 2007
ENERGY AND THE ECONOMY
Energy Consumption                                                        NWT Energy Use
Energy consumption in the Northwest                                  19.8 million gigajoules in 2005
Territories is high on a per capita basis
                                                 Space Heating (diesel, natural
due to factors such as vast distances and            gas, propane, wood)
the cold climate, but low when compared                      21%
to the Gross Domestic Product (GDP)
due to the production of high-value com-
modities such as diamonds.
                                                                                                       Transportation (diesel,
                                                                                                         gasoline, aviation)
  • Per capita energy use in the NWT is                                                                         49%
    460 GJ and is nearly double the
    Canadian average of 240 GJ.
  • Energy consumption per unit of GDP          Electrical Generation (diesel,
    is 16% lower than the Canadian                   natural gas, hydro)
    average.                                                 30%


Fossil fuels provide the majority of energy consumed in the NWT. In 2005/06, 445 million litres of diesel, gaso-
line, and propane were sold in the NWT, with more than half used for transportation (260 million litres). The
adjacent chart shows energy use in the NWT in gigajoules and includes all energy sources.



Energy’s Contribution to the Economy
Energy makes a significant contribution to the economy:

  • The value of oil and natural gas produced in 2005 was $524 million;
  • Oil and gas revenues paid to the Federal Government were $148 million in 2005 ($14 million in royalties
    and $132 million for the federal ownership share in the Norman Wells field);
  • Oil and natural gas engineering construction was worth $80 million; and
  • Between 1994 and 2004, $1.5 billion was spent on oil and gas exploration and development.

The contribution of energy to the economy will rise significantly with the operation of the Mackenzie Valley
Pipeline, which is expected to contribute $724 million annually to the NWT’s GDP. The pipeline would mean
an investment of at least $7 billion.




                                                                                                  (867) 920-3274
                                                                                         www.nwtenergyplanning.ca
    NWT Energy Facts
                                                                                                                                                                                March 2007
ENERGY ECONOMICS
Energy Costs
Energy costs are a major contributor to the high cost of living in the north and can hinder prospects for local
economic development. According to household surveys, average annual household spending on home heat-
ing fuel, electricity, and water in the NWT climbed from $3600 in 2003 to $4700 in 2005. Spending on these
items in 2005 was 93% higher than the Canadian average. The consumer price index shows that home heat-
ing fuel, electricity, and water costs in the NWT are higher and have risen faster than Canadian averages.

Subsidy Costs
High energy costs also consume a significant amount
of government spending through subsidy programs.                                                              Home Heating Costs
In 2005/06, the Territorial Power Support Program
(TPSP) cost the GNWT $8.3 million, while petroleum                                  Natural Gas $8.47/GJ - Norman
                                                                                                Wells
product subsidies cost another $1.1 million. The Hous-
ing Corporation also spent $11.6 million to subsidize                                        Wood Pellets $5.50/40lb

heat and electricity costs for tenants in 2,300 public                                                 Softwood $300/cord
housing units.
                                                                                     Natural Gas $20.51/GJ - Inuvik

Home Heating                                                                                             Fuel Oil $0.85/litre
Heating oil, natural gas, propane, firewood, and wood
pellets are used to heat homes in the NWT. Fuel oil is                                                  Propane $0.58/litre

the most common because of its reliability and until re-                                                 Fuel Oil $1.00/litre
cently, its price. Wood is widely used for home heating
but rarely without another source such as heating oil                                             Electricity $0.16/kWh

or propane. Natural gas is used only in Norman Wells
                                                                                                                                     0             3        6       9        12      15       18
and Inuvik. The adjacent figure shows home heating
                                                                                                                                    Cost in Cents per kWh of Heat
costs per kWh of heat and considers the efficiencies
of typical new furnaces and wood pellet stoves (78%)
and regular wood stoves (63%).

Electricity                                                                                            Monthly Power Bill for 700 kWh of Electricity
Isolated grids, a lack of economies of scale,                          $800
and transportation costs all contribute to high
                                                                       $700
electricity rates in the NWT. In many communi-
ties, diesel is still the most reliable and the least                  $600
                                                        Monthly Cost




expensive source of electricity. Where diesel is                       $500
the main source of power, it is estimated to ac-                       $400
count for 30-35% of electrical costs: between
                                                                       $300
18 and 33 cents per kWh in 2006/07 depending
on the community. The adjacent chart shows                             $200

typical monthly costs for electricity in select                        $100
locations. Communities are subsidized to the                             $0
Yellowknife rate through the Territorial Power
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                                                                                                                                                    (867) 920-3274
                                                                                                                                           www.nwtenergyplanning.ca