Northern Cross to start from scratch

Northern Cross's Eagle Plain oil-and-gas project has been sent back to the drawing board after Yukon's assessment board was unable to determine how exploratory drilling would affect the Porcupine caribou herd.

Northern Cross’s Eagle Plain oil-and-gas project has been sent back to the drawing board after Yukon’s assessment board was unable to determine how exploratory drilling would affect the Porcupine caribou herd.

The project proposal was first submitted to the Yukon Environmental and Socio-economic Assessment Board in 2014.

In a report released earlier this week, YESAB decided that it was “unable to predict how the Porcupine caribou herd will interact with the project and as such is unable to determine the significance of adverse sociocultural effects related to the access to and use of the Porcupine caribou herd.”

“At this point, the assessment is terminated and … the ball is back in Northern Cross’s court as to what they wish to do,” said Tim Smith, YESAB’s executive director.

This was the outcome of a nearly two-year long assessment process that could have ended with YESAB deciding to approve or reject the project.

Instead, it chose to refer the project for executive committee screening. Basically, that means it’s sent Northern Cross back to the very beginning of the process. The company can now choose to resubmit the same proposal or to modify it.

“We’re stunned,” said David Thompson, CEO of Northern Cross. “I’m absolutely stunned. We participated in an assessment program for an exploration project for almost two years. Our expectation was that we would complete a review process. We’re very disappointed by that.”

Thompson said he doesn’t yet know what the company’s next steps will be, or if it will resubmit at all.

Executive committee screening is essentially a more rigorous review of a proposal. It’s reserved for larger projects with more serious potential impacts, like the proposed Casino mine. First Nations consultation is required, and more government departments are called on to provide feedback.

Once a project proposal is submitted, YESAB has 16 months to complete the assessment, according to new timelines recently set out by Bill S-6.

But it’s unusual to have a project get all the way through an assessment process only to be sent back for re-evaluation, according to Smith.

He could only think of two other occasions when this has happened. One was the Yukon Queen II riverboat service operated by Holland America between Dawson City and Eagle, Alaska. In 2012, the company decided to pull the boat out of operation, partly because it saw no end to the YESAB review process in sight.

Still, Smith said the decision was necessary in this case, because of the possible threat to the Porcupine caribou herd and the First Nations that depend on it.

“The stakes are pretty high when we’re talking about a way of life,” he explained.

Northern Cross had proposed to drill 20 wells for oil-and-gas exploration in the Eagle Plain basin in northern Yukon. The area would have stretched over 700 square kilometres in Nacho Nyak Dun and Vuntut Gwitchin traditional territories.

“We just don’t know enough in that part of the territory about that herd,” Smith said.

But the decision raises an important question: if baseline data about the caribou herd was missing, why was the project assessed in the first place?

Before YESAB accepts a project for environmental assessment, it goes through an adequacy review process. That’s when the assessment board can ask a proponent for information it’s lacking.

In this case, YESAB sent Northern Cross four separate information requests, but the project was then deemed adequate.

“Certainly, we felt we had the detailed information necessary to examine the project and that the proponent was able to provide us with all the information that they possibly could,” Smith said.

Sometimes, he said, the baseline information about possible impacts just doesn’t exist for certain regions.

“Is that entirely the proponent’s responsibility, or is that the resource manager’s responsibility?”

YESAB’s report refers to the North Yukon Regional Land Use Plan, which recommends further investigation of the impacts of disturbances on caribou in the region. “These priorities have not been addressed,” reads the report.

Julie Stinson, acting director of the development assessment branch of the executive council office, said it can be difficult for the government to collect baseline data in remote regions.

“There’s a limited amount of money for research and government needs to determine where that is best spent.”

She suggested that proponents will sometimes partner with governments to do the research that’s needed.

But Sebastian Jones of the Yukon Conservation Society said he thinks YESAB’s decision could sound a death knell for this project. In the time it would take to get the project through another assessment, he said, he thinks Canada will have developed a more coherent climate policy that may render this project obsolete.

“I’ll never be happy to see this project go ahead,” he said. “I think there’s a possibility that the Chinese (company) which owns this company will just decide to cut its losses.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

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