Even if you build hundreds of solar panels and wind turbines, you still won’t get the Yukon off fossil fuels.
And if you accept that, then you might as well support a local oil-and-gas industry. After all, it’s the lesser of two evils compared with importing all our fuel from Outside.
That’s the message being delivered to Yukon’s business community at a workshop hosted by the Yukon Chamber of Commerce in Whitehorse on Thursday.
Chamber president Peter Turner said the Yukon should be looking at “having a 100-mile diet for fossil fuels.”
Turner claims the Yukon economy is “leaking” $200 million a year to buy fuel from Outside. He believes that a domestic oil-and-gas industry would be better for Yukon’s economy and better for the environment.
“If the government were flushing $200 million down the toilet every year, the Yukon Chamber of Commerce would be all over them,” he said.
Renewables like solar and wind can be used to produce electricity, Turner said. But more than 95 per cent of Yukon’s electricity already comes from hydro power, meaning that most of the territory’s carbon footprint doesn’t come from electricity at all.
Turner pointed to research presented by economist Benjamin Ryan at the Opportunities North business conference last fall.
“What he found was about four-fifths of the energy we consume in some form comes from fossil fuels,” Turner said.
Ryan found that about 14.5 per cent of Yukon’s fuel use goes to heating. Another 6.5 per cent is diesel used for electricity generation in off-grid communities and during hydro power shortfalls.
The rest – about 79 per cent – is gasoline, diesel and jet fuel used by cars, trucks, airplanes and heavy equipment.
And it’s that portion that Turner believes will be difficult to replace with anything renewable in the near future. At the moment, he said, the Yukon is burning nine million litres of fuel every year to transport all that fuel up to the territory.
Instead, he believes we should try and produce that fuel locally.
George Eynon, president of geos eynon&associates; consulting and the keynote speaker at this week’s workshop, said a domestic oil-and-gas industry would help the Yukon be more resilient to global fluctuations in fuel prices.
“You’re at the whim of world pricing if you’re dealing with importing from Alaska or the Lower 48 (states) … whereas if Yukon decides to do something about it in its own territory, then really the price can be almost irrelevant.”
He and Turner both argued that having a local industry would allow the Yukon to develop its own, stringent environmental regulations around fossil-fuel extraction.
However, Eynon wasn’t able to point to anywhere else in the world with a population as small as the Yukon’s that has successfully developed its own fossil fuel industry.
And he acknowledged that even if the Yukon did develop its oil and gas resources, the fuel it produced would only be for domestic use.
“If you produce a lot in the Yukon, if you then want to get it to a market in the Lower 48, for example, you’re competing with sources of supply that are much, much closer,” he said. “Competing on exports is probably almost certainty not viable in the current supply-demand pricing environment.”
The Yukon government is certainly interested in a local fossil-fuel industry, and is currently moving ahead with an economic assessment of shale gas development in the Liard Basin in southeast Yukon.
But the territory likely won’t see any major development in the near term.
Recent research has found that the Yukon portion of the Liard Basin does hold a large unconventional shale gas deposit, which could be developed using hydraulic fracturing, or fracking. But the economics of drilling deep wells in such a remote area are still unclear.
There is also widespread public opposition to fracking in the territory.
And the Yukon’s only oil-and-gas exploration project currently in the works – Northern Cross’s Eagle Plain project – was recently referred to a higher level of environmental assessment due to possible impacts on the Porcupine caribou herd.
Still, Eynon believes those hurdles can be overcome.
He suggested that the territory could look at a form of state enterprise or a public-private partnership to fund the development of the industry.
And he believes that the Yukon’s small population will make it easier to bring people around to the idea, though he said that consultation would likely take years.
“When you only have 37,000 people, this can be done,” he said. “I don’t think it’s insurmountable.”
He and Turner also suggested that royalties from a territorial oil-and-gas industry could go toward developing more renewable energy in the Yukon.
“You’re not going to get off fossil fuels entirely. It’s unrealistic,” Eynon said. “But there is a way to encourage coexistence of these two and have a positive economic impact on the economy.”
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