Yukon could see more oil and gas exploration

Oil companies are eyeing the Yukon's energy reserves.

Oil companies are eyeing the Yukon’s energy reserves.

There were some expressions of interest submitted Wednesday just before the close of the spring 2013 oil and gas disposition, but the Department of Energy Mines and Resources isn’t releasing any details just yet.

“Right now, I can’t tell you how much or where because we’re just examining all the information we received,” said department spokesperson Jesse Devost.

The department will announce the number and location of the requests next week, once it’s made a thorough examination of the submissions, he said.

Of the eight oil and gas basins in the territory, only two were open in this latest disposition. Both – the Kandik and the Eagle Plain Basin – are located in the north Yukon.

While there is nothing that prevents a company from vying for an area outside of the basins – provided it doesn’t conflict with something like a park or First Nation land claim – it would be surprising if a company did, said Ron Sumanik, the director of oil and gas resources for the Yukon government.

Even within the basins – which are the most promising area from an oil and gas perspective – there is very little known about the geology, he said.

Outside of the basins, geologic data is even more scant.

But geology isn’t the only thing that’s poorly understood, said Sumanik. The same holds for the disposition process itself.

That came to the fore last year when there were several expressions of interest made for oil and gas development in the Whitehorse Trough.

That area, which stretches from Carcross to Carmacks, also happens to be where the vast majority of the Yukon’s population lives.

The public outcry caused the government to issue a five-year ban on oil and gas development in the Whitehorse Trough.

It also committed to engaging with the public on the issue, but it has yet to set a date for that to take place.

But the government has been busy on the oil and gas front.

In November, it revised the Yukon Oil and Gas Act to open up the Liard Basin to oil and gas development.

The territory also removed the power of unsigned First Nations to veto development on their traditional territories.

The Liard Basin, which lies in the southeast, overlaps with the traditional territory of the Kaska – which includes the unsigned Liard First Nation.

The Liard First Nation has vowed to fight these legislative changes in court.

However, the Liard Basin wasn’t included in this latest disposition.

Late last year, the Kaska won a lawsuit against the Yukon government which affirmed the requirement for the territory to consult with unsigned First Nation governments before mineral claims are staked on its traditional territories.

While that decision means the government has to rework how it approves mineral claims, Sumanik doesn’t see that case having any effect on the oil and gas disposition process.

“It’s not a free-entry system,” he said.

Affected First Nations are consulted early, as soon as an expression of interest is submitted. It’s then followed by a 60-day public consultation period.

In addition, before any exploration work can begin, the project has to clear the Yukon Environmental and Socio-economic Assessment Board, which means another round of public consultation.

Twice a year, the Yukon government puts out a call for expressions of interest to the oil and gas industry.

It’s not unusual to receive no submissions.

But when there are some, there are two months of public consultation, after which a report is then submitted to the minister. If the minister approves the submissions there is a call for bids, which lasts for 45 days.

The identities of the companies that make the expressions of interest and the bids are kept secret.

It’s a policy that rubs a lot of people the wrong way, but there is a very good reason for it, said Sumanik.

“It’s in the interest of maximizing benefits or revenues for Yukoners,” he said.

The company that makes the initial expression of interest may not be the one to win the bid when the call goes out.

To have that company under the glare of public scrutiny during two months of consultation could force them to reveal their plans and compromise its position when the bidding starts, said Sumanik.

And if that bidding process was open it would put smaller companies at a disadvantage.

“(A large company) looks at that guy and says, ‘They’re not well capitalized. We can throw in a stink bid, We think they’ll throw in this much so we’ll slightly out-bid them,’ Instead of really sharpening their pencils and adding another half-million dollars to their bids,” said Sumanik.

Conversely, if a large company is known to be going after a lease it will discourage smaller companies from putting in a bid, he added.

While the names of the companies that put in submissions will be kept under wraps, sometime next week the department will reveal which areas are being considered.

Once that happens, the public consultation period will officially begin.

Contact Josh Kerr at joshk@yukon-news.com