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Oil and Gas Act amendments passed

Amendments to Yukon's Oil and Gas Act were unanimously passed by the legislative assembly this week, but not before the government introduced changes to address concerns raised by Yukon First Nations.

Amendments to Yukon’s Oil and Gas Act were unanimously passed by the legislative assembly this week, but not before the government introduced changes to address concerns raised by Yukon First Nations.

The amendments allow the government to cancel a well licence if an operator is out of compliance, and to ensure that licence owners are still liable for a well even after it’s abandoned. That means if environmental standards change over time, the licence owner will still be on the hook for bringing the well back into compliance.

But another amendment, which allows the minister of energy, mines and resources to extend a licence past the 10-year maximum set out in the previous legislation, was a source of contention with three Yukon First Nations.

After the legislation was tabled on Oct. 28, the chiefs of Tr’ondek Hwech’in, Vuntut Gwitchin First Nation and the First Nation of Nacho Nyak Dun sent a letter to the government in protest. They said they hadn’t been adequately consulted about the changes, which would have allowed indefinite permit extensions.

“We are writing to inform you that we object strongly to Yukon government’s approach,” they wrote. “The Yukon government is expediting amendments to (the Oil and Gas Act) at the expense of its relationship with Yukon First Nations.”

The government has said it met twice with First Nations during the 60-day consultation period before the new legislation was tabled.

But it has met with them another three times since it received the letter.

And this week, Energy, Mines and Resources Minister Scott Kent introduced two changes to the legislation in response to those meetings.

“I’m happy to report that all matters have been brought to a satisfactory conclusion,” he said in the legislature on Monday. “I very much appreciate this work in partnership with our First Nations.”

The first change places some restrictions on licence extensions.

For instance, permit holders can only apply for extensions beyond 10 years if their work has been affected by circumstances that are out of their control and that are not “reasonably foreseeable.” They cannot apply for an extension because of a shortage of funds or unfavourable market conditions.

Jennifer Lee, senior advisor for the oil and gas resources branch of the Department of Energy, Mines and Resources, said bad weather could be one reason for requesting an extension.

“It’s got to be something severe,” she said. “Weather that they were not able to overcome.”

The minister will decide whether or not to grant extensions.

If an extension is granted, it cannot be longer than five years. However, permit holders can apply for multiple extensions.

The second change requires that Yukon First Nations be consulted about any permit extension requests on their traditional territories.

“The minister can’t issue an extension beyond 10 years without further consultation,” Lee explained.

Lee said the government has received written confirmation from Tr’ondek Hwech’in and Vuntut Gwitchin First Nation that they approve the changes. She said the department has not received a direct response from the First Nation of Nacho Nyak Dun, but it has received approval from the Council of Yukon First Nations.

In the legislative assembly on Tuesday, Kent read from a letter sent by a Tr’ondek Hwech’in representative, which said that “TH is content for Bill No. 93 to move ahead.”

Tr’ondek Hwech’in Chief Roberta Joseph was unavailable for comment.

NDP MLA Jim Tredger, who initially raised concerns about the legislation, supported the changes this week.

“I extend my thanks to the Energy, Mines and Resources officials and Yukon First Nations that came together to repair controversial amendments that were originally brought forward with too much haste,” he said in the assembly on Wednesday, before the bill was passed.

But earlier in the week, Tredger did question whether a lengthy environmental assessment process could be used as reasonable grounds to request an extension.

“I have heard from several people concerned that it might - but probably shouldn’t - be used as a valid reason to ask for extensions,” he said.

In his response, Kent seemed to suggest that permit holders could ask for extensions if they were required to provide additional information as part of the Yukon Environmental and Socio-economic Assessment Act’s process.

“They don’t determine the number of information requests that are made of them and they don’t determine the type of information requests,” he said. “That’s not always within their power to respond to an information request right away.”

Northern Cross Yukon, the only oil and gas company doing significant exploration work in the Yukon, has permits that are set to expire in 2017.

Kent acknowledged that this was one of the “key timing considerations” around the decision to amend the Oil and Gas Act now.

Contact Maura Forrest at maura.