Energy costs threaten Nunavut

Thanks to the URRC we now seem to have accepted an electricity rate increase – at least an increase with which most people can live – until such time as the “fuel riders” are applied.

The problem with which I am sure most people will agree is that there is a limit that power rates, including “fuel riders,” can increase. There is a point beyond which Nunavut will “self-destruct;” meaning that there is a point when the combined fuel and power rates will literally kill all economic stimulus, a point beyond which they will stifle any worldwide competition we can hope for and a point that will discourage people with the needed skills from moving here to work. It takes little imagination to visualize what repercussions this would have on our already hard-pressed jobless society, and in turn upon our government.

Nunavut has little or no way of mitigating the impact of fuel price increases. Let us take a look at power costs. We are not connected to an electrical grid system. Currently we have no viable alternate power such as that generated by hydro, nuclear power, piped gas, wind or solar energy that may be less expensive. We must rely totally on fossil fuel energy resources.

Rising fuel costs will likewise affect transportation costs, which in turn affects the cost of all our commodities. Similar with power alternatives and unlike our fellow Canadians to the south, we are very restricted in our means of transportation.

For the present our fate is inextricably linked with the price of fossil fuel. Some predict that the world supply of conventional oil will soon peak within the next five to 10 years, if in fact it has not peaked already. The more optimistic estimate it will peak in about 30 to 50 years time. It is reasonably safe to forecast that although fuel costs will continue to fluctuate both up and down, that in the long run these fluctuations will be on an increasing scale.

It appears obvious the government will need to adjust their subsidies in relation to rising oil prices. Also, it would appear logical that one of their major tasks, at this point in time, is to thoroughly examine and calculate how much of an energy cost increase our economy can tolerate before these costs become defeating and destructive. We may have already reached or are close to that threshold and do not know it. Even if we accept a more optimistic view, in preparation, it is still wise to create a forecast model now. All levels of government will need this information if they are to plan for our future.

Frank Pearce
Iqaluit