wonky yukon energy strategy champions outside oil interests

The draft Yukon energy strategy is currently out for public review. This review period is hopefully not the only chance the Yukon public has to…

The draft Yukon energy strategy is currently out for public review.

This review period is hopefully not the only chance the Yukon public has to comment on Yukon energy issues as this version of the energy strategy has some very disturbing sections.

As quoted on page 22, the strategy states that the “Yukon’s oil and gas sector is posed to be a significant contributor to the Yukon’s economy in terms of jobs, business opportunities and revenues to government.”

Let us dissect the above sentence.

Given the labour shortage within the Yukon, the creation of yet more jobs is perhaps not the most desirable thing from a work-force stability model.

In addition, the shortage of fossil-fuel workers across North America is such that the odds of attracting any to the Yukon will be problematic.

The fossil-fuel section of the energy strategy seems bent on creating job opportunities in the one economic sector that everyone knows there is a labour shortage in.

Business opportunities will certainly abound, especially for all those Yukon oil and gas companies that specialize in drilling oil and gas wells.

Ah, the alert reader will have caught the error in the above sentence.

There aren’t any Yukon oil and gas well-drilling companies.

The few fossil-fuel companies that operate in this field within the Yukon are all from Outside.

It must be recognized that should the Yukon choose to develop its oil and gas sector, Outside companies will be the main beneficiaries, not Yukon companies.

As for revenues to government, let no Yukoner dream of oil and gas riches comparable to what  Alberta and Saskatchewan have squandered.

A quick revue of the Yukon Oil and Gas Royalty Regulations shows that the first 30,000 cubic metres of oil from any single well will only have a royalty rate of 2.5 per cent.

For those into conversions, 30,000 cubic metres of oil is in the neighbourhood of 188,760 barrels of oil.

After that, the royalty rate fluctuates from anywhere between 10 to 25 per cent. This is when the well is considered established.

For established wells, Alberta has an upper end to its royalty rate of thirty per cent, and Saskatchewan of forty per cent.

Based just on percentages, it looks like the Yukon is winning in the race to get the least fiscal benefit should oil and gas fields be developed.

Note that calculation of royalties in any jurisdiction is dependent on a variety of factors.

In the Yukon, one of the factors is the what the Yukon government deems the crude oil price.

Let us all hope it is not like the Yukon placer royalty rates. For that, the price of gold is set at $15 an ounce.

Returning to the energy strategy, the Yukon government anticipates that there are “attractive conditions to support a sustainable oil and gas industry in the Yukon.”

Yes, nothing like the sledgehammer blows from climate change to create attractive conditions.

Melting permafrost and shorter winters will make access to the Yukons northern oil and gas fields difficult if the industry anticipates using winter ice roads and operating on frozen ground.

Instead, permanent year-round resource roads will have to be constructed all over the winter grounds of the Porcupine caribou herd to enable extraction and exportation of fossil fuels.

Of course, the mere fact that fossil fuels are causing climate change is glossed over in the energy strategy.

It even has the gall to state that the strategy will minimize “greenhouse gas emissions and environmental impacts from oil and gas activities.”

Given the seriousness of climate change impacts on the North, one would think that the whole point of a Yukon energy strategy would be to steer very sharply away from creating any more greenhouse gases.

It does not seem to acknowledge that even if the fossil fuels can be extracted and exported without any emissions, the combustion of those fuels in vehicles or furnaces create greenhouse gases.

This in turn causes climate change.

A true energy strategy for the Yukon would aim to shift the territory off fossil fuels, not have it as a centrepiece of future economic development.

Finally, to add insult to injury, it is hoped that there will be a “sustainable oil and gas industry in the Yukon”.

Oil and gas are not sustainable.

Humans take them out of the ground, burn them once and then it is over.

Once they are gone, they are gone forever.

It is the very antithesis of sustainable.

Deadline for comments on the Yukon draft energy strategy are on Monday, June 30th. For more information visit www.gov.yk.ca.

Lewis Rifkind is a Whitehorse based part-time environmentalist.