Yukon government looks to change oil and gas regulations

The Yukon government is looking to make changes to the territory’s Oil and Gas Act, to encourage more exploration while giving itself more control over “bad apples.”

The Yukon government is looking to make changes to the territory’s Oil and Gas Act, to encourage more exploration while giving itself more control over “bad apples.”

One of the changes would allow the government to cancel a well licence if an operator is out of compliance. Under the current legislation, the government can impose fines and other penalties, but cannot cancel a licence.

“We are of the view that that is an essential part of the toolbox,” said Ron Sumanik, director of oil and gas resources with the Department of Energy, Mines and Resources. “If there are bad apples consistently operating outside the laws, maybe they shouldn’t be doing business here in the Yukon.”

Sumanik said he was surprised that licence cancellations and a number of other proposed changes were not part of the original 1998 legislation.

For instance, one of the amendments would allow names of the owners of oil and gas leases to be released to the public, which is standard practice in all other Canadian jurisdictions. Under the current Yukon legislation, that is not allowed.

“I can’t explain that,” Sumanik said. “We don’t understand how that ever entered into our legislation. It’s Yukoners’ resource and they deserve to know who the holder of a lease is.”

Another change would ensure that licence owners are still liable for a well even after the licence is cancelled. Currently, an operator can drill a well, seal it off and abandon it, as long as it meets the environmental and safety standards of the day. But if those standards change and the well needs more work to bring it back into compliance, the operator is no longer on the hook for that work.

These amendments would change that. Sumanik said the idea is to make sure oil and gas exploration functions on a “polluter pays” principle.

But other proposed amendments are designed to make oil and gas exploration easier and more affordable. According to a government discussion document, there have been only 76 oil and gas wells drilled in the Yukon, compared to tens of thousands in Alberta and British Columbia.

To encourage exploration in the Yukon, the government is suggesting that exploration permits be extended to 12 years, up from the standard 10-year permits currently in place.

Because the Yukon is so isolated, Sumanik said, it makes sense to have longer permits.

“We don’t have an oil and gas service industry in the Yukon,” he said. If an oil rig breaks down, he added, the closest service company might be thousands of kilometres away.

Another amendment proposes a change to the rent collected by the Yukon government during the second half of a permit’s life. That rent is supposed to encourage operators to do exploration work instead of just sitting on a permit.

The change would allow operators to claim expenses against the rent they pay. That would change rent payments into something like a deposit for operators that are actually doing work.

“If a resource is discovered, you want to get it to production,” said Sumanik. “It… puts money back in the pocket of the proponent who we hope will choose to put it back in the very same project.”

The government is also proposing a change to benefit agreement negotiations with First Nations. Currently, if the government and a First Nation cannot agree on a benefit agreement for a project on Yukon land, it falls to the First Nation to initiate a dispute resolution process. If the First Nation chooses not to, the project stays on hold.

The change would allow the government to initiate that process as well as the First Nation. The dispute resolution process ends with the government making a decision about whether and how a project on Yukon land will proceed.

Sumanik said this change was designed to prevent a prolonged “stalemate” between the government and First Nations. But he added that there has never been a situation where a project was delayed because of the law as it exists right now.

The government is looking for feedback from the public on the proposed amendments by 5 p.m. on September 14. A discussion document is available at www.yukonoilandgas.com.

Contact Maura Forrest at

maura.forrest@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A proposed Official Community Plan amendment would designate a 56.3-hectare piece of land in Whistle Bend currently designated as green space, as urban residential use. Whitehorse city council will vote on the second reading of the Official Community Plan amendment on Dec. 7. (Courtesy City of Whitehorse)
Future area of Whistle Bend considered by council

Members set to vote on second reading for OCP change

The City of Whitehorse’s projected deficit could be $100,000 more than originally predicted earlier this year. (Crystal Schick/Yukon News file)
City deficit could be just over $640,000 this year

Third quarter financial reports presented to council

Chief Medical Officer of Health Dr. Brendan Hanley speaks during a COVID-19 press conference in Whitehorse on Oct. 30. Masks became mandatory in the Yukon for anyone five years old and older as of Dec. 1 while in public spaces. (Crystal Schick/Yukon News file)
As mask law comes into effect, premier says $500 fines will be last resort

The territory currently has 17 active cases of COVID-19

Crystal Schick/Yukon News file
Ranj Pillai, minister of economic development, during a press conference on April 1.
Government rejects ATAC mining road proposal north of Keno City

Concerns from the First Nation of Na-Cho Nyäk Dun were cited as the main reason for the decision

asdf
WYATT’S WORLD

Wyatt’s World for Dec. 2, 2020

The new Little Salmon Carmacks First Nation council elected Dec. 1. (Submitted)
Little Salmon Carmacks elects new chief, council

Nicole Tom elected chief of Little Salmon Carcmacks First Nation

Submitted/Yukon News file
Yukon RCMP’s Historical Case Unit is seeking information related to the unsolved homicide of Allan Donald Waugh, 69, who was found deceased in his house on May 30, 2014.
Yukon RCMP investigating unsolved Allan Waugh homicide

Yukon RCMP’s Historical Case Unit is seeking information related to an unsolved… Continue reading

A jogger runs along Millenium Trail as the sun rises over the trees around 11 a.m. in Whitehorse on Dec. 12, 2018. The City of Whitehorse could soon have a new trail plan in place to serve as a guide in managing the more than 233 kilometres of trails the city manages. (Crystal Schick/Yukon News file)
2020 trail plan comes forward

Policies and bylaws would look at e-mobility devices

Snow-making machines are pushed and pulled uphill at Mount Sima in 2015. The ski hill will be converting snow-making to electric power with more than $5 million in funding from the territorial and federal governments. (Joel Krahn/Yukon News file)
Mount Sima funded to cut diesel reliance

Mount Sima ski hill is converting its snowmaking to electric power with… Continue reading

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Mask fundraiser helps make children’s wishes come true

From Black Press Media + BraveFace – adult, youth and kid masks support Make-A-Wish Foundation

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

Most Read