Yukon fails to attract oil and gas explorers

Yukon fails to attract oil and gas explorers
Yukon drilling pipe.Photo: Mary Walden.

For the second time running, the Yukon government’s call for interest from the oil and gas exploration industry has gone unheeded.

Twice a year companies can ask for areas to be opened to exploration. But the latest Jan. 8 deadline came and went and not a single “request for postings” was submitted.

That’s not “out of the norm,” said oil and gas branch director Ron Sumanik.

There have been other dry spells since the territory took control of its onshore resources, he said. It’s not an easy place to do business and, compared to its neighbours like the NWT, the Yukon has less to offer in terms of estimated oil and gas potential.

“So you’re farther away from the market, costs to explore are higher in the North and the size of the prize, for lack of a better term, is less than some other global or Canadian jurisdictions,” Sumanik said.

And then there’s the question of land – there aren’t many places to look in the Yukon right now.

Only two of the territory’s eight sedimentary basins were open for requests during this latest round – portions of Eagle Plains not already taken or protected and the nearby Kandik basin.

The much-sought-after Liard basin, tucked away in the southeast corner, is still off limits, he said.

Even though it’s been more than a year since the government stripped the region’s Kaska First Nations of their oil and gas veto power, the two sides remain at odds over how to deal with new development.

The Kaska have never signed a land claim. In the wake of the government’s controversial move, they threatened court action and declared a resource moratorium.

“In our view there is not a moratorium,” Sumanik said. “We have the ability to make oil and gas resources available in the portion of the Kaska traditional territory that lies within Yukon. At this point – since we removed, repealed the section 13 consent provision – we have chosen not to exercise that.”

Both the Peel Plateau and Bonnet Plume basins are also currently out of play. They’ve been closed to industry since 2010 to allow the government and First Nations to complete a land use plan for the watershed. There’s still no final plan and the ban was due to expire Jan. 21.

As for the Whitehorse Trough – an area stretching from Carcross to Carmacks which is home to the majority of the Yukon’s population – the government “temporarily suspended” new dispositions in 2012 in response to public outrage over potential development.

The Yukon’s temporary ban on fracking also contributes to the lack of industry interest, Sumanik said.

“There is no question we have feedback from industry that the hydraulic fracturing issue is part of the concern about investing in the Yukon,” he said.

Until a committee of MLAs, who were appointed last year to study the risks and benefits of fracking, decides whether the contentious practice should be allowed or not, companies wouldn’t be able to assess both conventional and unconventional possibilities.

“But then at least there will be certainty one way or the other, and they will know, with certainty, what the Yukon has to offer,” he said.

The six-member committee includes three Yukon Party government reps – Economic Development and Environment Minister Currie Dixon, Watson Lake MLA Patti McLeod and Vuntut Gwitchin MLA Darius Elias.

NDP MLAs Jim Tredger and Lois Moorcroft, along with Klondike MLA and interim Liberal leader Sandy Silver, round out the roster.

The committee recently toured an Alberta fracking site. It’s expected to soon hold public hearings in Whitehorse, Old Crow and Watson Lake.

It’s supposed to report its findings back to the legislature this spring.

Right now the Yukon’s only oil and gas activity is being done by Calgary-based Northern Cross, a company controlled by China’s state-owned CNOOC. It’s doing an intensive 3-D seismic program on its Eagle Plains permits, near the Dempster Highway.

There’s been no production at the territory’s only gas field, Kotaneelee, located in the southeast corner near the NWT border, since 2012.

The Yukon’s next request for oil and gas postings closes on July 9.

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