Imperial drops price in Norman Wells
Northern News Services
Norman Wells (Jan 29/01) - The price of natural gas in this Mackenzie River community dropped from really really high to really high last week.
Responding to a town request, Imperial Oil agreed to increase prices 69 per cent over last year instead of a planned 97 per cent.
At the urging of the chamber of commerce, officials of the town, which acts as the community's gas distributor, first approached Imperial in mid-December. Officials argued Imperial should not be charging the same price it charges in southern Canada.
The planned 97 per cent increase for 2001 was based on the Alberta Price Reporter, an index used to calculate prices in southern Canada.
"We're totally different than any other community, so why would you base it on southern prices?" said mayor Kevin Diebold, also president of the Norman Wells and District Chamber of Commerce.
At a council meeting last Tuesday, council officially accepted offer by Imperial to drop the price by what the company calculated would be the cost of transporting the gas to southern markets. Instead of charging the town the $5.93 per gigajoule it charges everyone else, it will charge $4.93.
In the units the town uses on the bills it issues, the price will be $9.05 per thousand cubic feet.
There are 340 oil wells within four kilometres of the municipality, some on the mainland, some on six man-made islands in the Mackenzie River and some on two natural islands in the Mackenzie.
"I'm pleased we were able to work together with the town to come up with a solution we both think is fair," said Imperial's area manager Don Anderson.
About 40 per cent of the homes and businesses in town use natural gas.
Anderson said the company is not concerned that the reduction will prompt other communities close to gas and oil sources to also insist on reduced prices.
He said the reduced price is still market-based, that the company simply agreed to factor in the lack of transportation costs.Natural gas is a bi-product of oil production at Norman Wells. The pipeline used to ship oil south is not capable of shipping gas.