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It’s no secret that oil and natural gas are hot commodities in North America. As production from conventional sources in Alberta and northern British Columbia starts to mature, it’s also no surprise that the Canadian petroleum industry is eager to tap the North’s potential. A significant amount of this potential, especially for natural gas, can be found right here in the Yukon.
“We estimate there could be a potential of approximately 20 trillion cubic feet of gas in the territory,” says John Masterson, director of the Yukon government’s Oil and Gas Management Branch.
To put this number into perspective, Canada annually produces about six trillion cubic feet (Tcf), exports 3.6 Tcf to the United States, and consumes more than two trillion cubic feet. So, a potential resource of 20 Tcf of natural gas could mean serious business.
“That’s an amount of gas on which the Yukon can build a meaningful oil and gas sector,” Masterson observes. Certainly, the case is strengthened by the geographical fact that the estimated potentials of 6 TCF and 3 TCF in the Eagle Plain and Peel Plateau, respectively, would be located very close to the proposed Mackenzie Valley pipeline.
Estimates of oil and gas potential are not mere speculation. Rather, they come from important tools called petroleum resource assessments, which are the responsibility of the Oil and Gas Management Branch. These assessments rely heavily on baseline data that the Yukon Geological Survey (YGS) collects about areas where oil and gas were likely formed, millions of years ago, in sedimentary rock.
“The rock types of the Western Canada Sedimentary Basin, which is Canada’s big oil and gas producer right now, track across much of the Yukon,” YGS project geologist Lee Pigage observes. “So, there’s no reason to think there wouldn’t be the potential for oil and gas in the Yukon as well.”
Proven reserves in two of the Yukon’s eight identified sedimentary basins—natural gas in the Liard Basin and oil in the Eagle Plain Basin—strongly support the existence of this potential. But with limited seismic exploration and fewer than 75 wells drilled in the Yukon, resource assessments have to focus primarily on “conceptual exploration plays” analyzed by the Geological Survey of Canada in Calgary.
“If you don’t know it’s there, what you’re trying to do in terms of a resource assessment is use a statistical probability estimate of the amount of oil and gas that may be in this area,” Pigage explains. |
Given that geological structures and rock types are similar to those in Alberta and Alaska where advanced exploration has established huge reserves, experts use data from those areas to calculate probable values for pool numbers, sizes and total resource amounts in Yukon’s eight oil and gas basins.
“With more exploration, we find out more information and we can better narrow down the range of values,” Pigage says.
Until this happens, a resource assessment—unlike the actual resources—isn’t written in stone.
“It’s an educated guess,” Pigage says. However, he adds that an educated guess usually comes with an upside. “All I can say is that, in many cases, it’s a conservative estimate.”
In other words, discovered resources tend to exceed the amounts suggested by early assessments. A good example is Alberta. There, increased exploration and development activity prompted a recent 12 per cent hike in the Alberta Energy and Utilities Board’s estimate of the amount of natural gas in the province.
For obvious reasons, the Oil and Gas Management Branch is encouraged by this trend whereby original estimates are generally revised upwards over time.
“If that’s any indication, I think that what the geologists are doing here in Yukon is setting some base-markers and, I expect, over the long run, is that our oil and gas potential will only increase,” Masterson says.
Although he recognizes that future activity might reveal even greater amounts of oil and gas than currently estimated, Masterson still speaks conservatively about the end result for the Yukon industry.
“We’re not going to be an Alberta,” he says. “But we’ll be a small oil and gas jurisdiction. There’s certainly a significant quantity of oil and gas potential in the territory that makes it worthwhile to develop an oil and gas regime—and it will help our economy in a real way.”
In the meantime, the ongoing work of resource assessment remains a key to eventually unlocking this potential and the related benefits.
“It’s a way of enticing companies to look at the territory, to undertake investment in the territory, to do further work in the territory,” Masterson says. “In a frontier region, it’s absolutely critical that we do that work and do it well.” |
Last Updated 30-01-2006
