The Yukon government hopes to find an agreement with Northern Cross after the oil exploration company filed a $2.2-billion lawsuit over oil and gas extraction in the Eagle Plains Basin.
“I hope there’s a way to make it work,” said Ranj Pillai, Minister of Energy, Mines and Resources. “I’d rather do that than deal with the legal process.”
Northern Cross claims a 2015 Yukon government moratorium on fracking in the Eagle Plains Basin prevents it from drilling for oil from land it has exploration permits for.
It wants to be compensated for the money it spent on exploration and the “fair market value” of the estimated 8.6 billion barrels oil in place.
Pillai confirmed the then-Yukon Party government put a fracking moratorium in place.
“It was a stance that the (energy, mines and resources) department wouldn’t accept anybody applying to frack,” he said. “As far as we’re aware there hasn’t been any request to frack.”
In April 2015 the Yukon Party government announced it was open to allowing fracking in the territory but only in the Liard Basin.
Pillai said the Liberal government supports conventional oil and gas development in the Yukon.
“We’re supportive of development in the Eagle Plains Basin,” he said. “Of course there’s an obligation to consult and collaborate with the First Nation of Nacho-Nyak Dun, Tr’ondek Hwech’in and VGFN (Vuntut Gwitchin First Nation).”
Pillai wouldn’t say what the government plans to do because the issue has “hit the legal system.”
“It’s a significant amount of money they’ve put on the table,” he said. “We have to review the statement of claim.”
During last fall’s election campaign the Liberals promised they would put in place a moratorium on fracking if elected.
“We heard it over and over from Yukoners, when it came to fracking, that wasn’t something they wanted to see,” Pillai said. “They didn’t feel there is enough preparation to understand the impact.”
But Yukon government officials met with Northern Cross in recent months, Pillai said, before the company decided to sue.
“We’ve met with Northern Cross and with a series of our ministers, we had a very positive meeting,” he said.
Northern Cross claims it can only extract the oil in Eagle Plains through fracking.
However a 2012 presentation available on Yukon Energy’s website seems to contradict that.
“The Geologic Survey of Canada median estimate of conventional natural gas resource potential is 6,000 bcf (billion cubic feet),” the presentation reads.
And Northern Cross’s own filing to the Yukon select committee on hydraulic fracturing wasn’t so categorical about having to use fracking.
“Northern Cross presented information about its Eagle Plains program … that it had no immediate plans for hydraulic fracturing but would prefer if the option was left open,” the committee report reads.
Contact Pierre Chauvin at pierre.chauvin@yukon-news.com