2. Legislative and Regulatory FrameworkA. Common Oil and Gas Legislative Regime
A. Common Oil and Gas Legislative Regime Since 1997 the Yukon government and Yukon First Nations have worked together through a working group to coordinate the development of an oil and gas regime in the Yukon. The objective of the common oil and gas regime is to provide a consistent regulatory process throughout the Yukon. This cooperative effort has many advantages:
The following outlines the key features of the Yukon oil and gas legislative framework.
The Legislation The Yukon Oil and Gas Act (YOGA), which consists of five parts, is the nucleus of the regime and addresses:
YOGA Applies to Oil and Gas Operations
YOGA was structured and written to apply to all oil and gas operations in the territory. For example, Part 3 of the Act, dealing with oil and gas operations, applies throughout Yukon. It is a law of general application under which approved operations can relate to both Yukon First Nation and Yukon oil and gas lands. If the operations relate to Yukon First Nation lands, an agreement may be concluded with the relevant Yukon First Nation respecting the coordinated management and regulation of oil and gas activities, and the recovery of oil or gas from a field or pool.
Adoption of Laws by Reference
To ensure that the same rules apply throughout Yukon, Yukon First Nations have the option of incorporating by reference the Yukon Oil and Gas Act or parts of it relating to the disposition and management of oil and gas rights. At this time, Yukon First Nations have not passed any legislation relating to oil and gas.
Integrated Management
The Act allows for the possibility that Yukon First Nation oil and gas interests form part of an overall, integrated management approach. Three examples of such provisions are:
B. Regulations
To date the Government of Yukon has enacted five regulations under YOGA. In addition, Royalty Regulations are under development. Other regulations being planned deal with pipelines and gas processing.
Copies of the regulations can be found on line at Yukon Oil and Gas. The following is a synopsis of what the regulations contain.
Oil and Gas Transfer Regulations
The Oil and Gas Transfer Regulations establish the rules regarding the administration and management of oil and gas rights that were issued by the federal government prior to devolution ("former federal disposition"). They outline:
Oil and Gas Disposition Regulations
The Oil and Gas Disposition Regulations establish the rules regarding the issuance and management of oil and gas rights in the Yukon. They outline:
Oil and Gas Licence Administration Regulations
The Oil and Gas License Administration Regulations establish the rules for obtaining licences to conduct oil and gas operations in the Yukon. They outline:
Oil and Gas Geoscience Exploration Regulations
The Oil and Gas Geoscience Exploration Regulations regulate petroleum exploration activities throughout the territory. Geoscience involves all aspects of preliminary surface and near-surface exploration such as geological field studies, aerial magnetic and gravity surveys, seismic activity and shallow test-hole drilling. The regulations describe licensing and reporting requirements, penalties, geophysical and geological operations, safety and health as well as environmental safeguards.
Oil and Gas Drilling and Production Regulations
The Oil and Gas Drilling and Production Regulations regulate drilling operations, well operations, field facility construction and operations, and production and conservation activities in the Yukon. They cover well licensing and well operations approval processes, information requirements, safety, environmental protection, inspection and investigations, required tests, samples and surveys, and well evaluation and abandonment requirements.
Draft Oil and Gas Royalty Regulations
The draft Oil and Gas Royalty Regulations regulate the payment of royalties. Royalty revenues are the principal fiscal means by which the resource owner is compensated for the extraction of its oil and gas resources.
The royalty rate structures will have a significant and a direct impact on the economics driving oil and gas exploration and development in the territory. These regulations will play a pivotal role in creating a competitive fiscal environment necessary to attract new investment and activity. It is important that the royalty regime reflects the high costs and risks associated with exploring and developing oil and gas in a frontier region.
An ad valorem royalty is proposed with a base rate of 10 per cent. The royalty regime is intended to be both competitive and administratively simple.
Contact Information
For more information, or to submit comments and suggestions on this section, contact:
John Masterson – Director
(867) 393-7107 E-mail: anne-marie.mccolman@gov.yk.ca Back to Table of Contents, back to previous section (Roles and Responsibilities) or on to next section (Oil and Gas Rights).
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