Yukon Oil & Gas Licensing Process

Yukon Oil and Gas Licensing Process  19 KB

Under the Yukon’s Oil and Gas Act, a licence is required to carry out all oil and gas activity in the territory. Oil and gas activity includes:

1. exploration, such as seismic or geological mapping;
2. drilling of oil and gas wells;
3. construction and operation of

• a pipeline wholly contained in Yukon;
• a gas processing plant; or
• an oil and gas facility.

A Geoscience Exploration Licence is required for any oil and gas exploration activity. This includes investigations of the subsurface of the earth using direct or indirect methods. A direct method would be to conduct geological mapping over an area of interest. An indirect method would be to complete a seismic survey. A Geoscience Exploration Licence may be obtained in Yukon without an oil and gas disposition.

A Well Licence is required to drill an oil or gas well. A company must hold a disposition which grants subsurface oil and gas rights before it can obtain this licence.

A Pipeline Licence is required for the construction and operation of a pipeline that is wholly contained in Yukon Territory. (A transboundary pipeline falls under the jurisdiction of the federal government.)

A Gas Processing Plant Licence is required for any activity related to the construction and operation of a plant that extracts hydrogen sulphide, helium, natural gas liquids and other substances from natural gas.

A Field Facility Licence is required for activity related to the construction and operation of an oil and gas facility such as a battery, an oil treater, a pumping station, a waste disposal facility or a compressor station.

Prior to issuance of a licence, a three-step process is undertaken that consists of:

Step 1. Operations review
Step 2. Environmental assessment
Step 3. Consent from First Nations (when required)

Step 1: Operations Review

The operations review ensures the proposed project will be conducted safely and to accepted industry standards. The application is examined by the Oil and Gas Management Branch to ensure that the proposed operations comply with the Oil and Gas Act and the appropriate regulations. Adherence to other territorial legislation and standards from the Department of Environment, the Department of Community Services, the Yukon Worker's Compensation Health and Safety Board and the Heritage Branch of the Department of Tourism is also verified.

The operations review is complete when all the required information has been received and examined and the program operations deemed as acceptable or unacceptable. Conditions to the licence regarding operations may be stipulated or the licence may be denied.

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Step 2: Environmental Assessment

All jurisdictions review proposed oil and gas activities to determine the risk of an activity before it starts. The proposed activity is then accepted, rejected, or permitted - subject to conditions - to minimize the environmental impact. The following illustrates the reviews and processes in the Yukon.

• When an oil and gas company wants a licence, their proposed activity or project must be assessed under the Yukon Environmental and Socio-economic Assessment Act (YESAA), a new legislated process which considers environmental, social, and economic impact, and provides an opportunity for public input before approval can be given. This is the point where conflict in land use (such as eco-tourism versus development) would be identified. The new legislation provides for a single assessment process for projects under federal, territorial or First Nation jurisdiction. Environmental assessments will no longer be undertaken by the Yukon government. Assessments will now be conducted by the Yukon Environmental & Socio-economic Assessment  Board (YESAB) or one of its six Designated Offices. Applications for low-impact exploration activities will not trigger a full review by YESAA.

• It is up to the company to meet the requirements of both the assessment and regulatory processes in order to obtain a licence in order to operate. The government must respond to the recommendation of the YESAA assessor by either accepting, varying or rejecting the recommendation in a decision document. More information about the environmental assessment process can be found in EMR Assessment Regulatory Guide ( 601 KB).

• A Land Use Permit, issued by the Department of Energy, Mines and Resources Lands Branch is required for any project involving one or more of the following: explosives; use of vehicles; drilling; campsites; fuel caches; earth moving and clearing; hydraulic prospecting; preparation of lines and trails or rights of way.

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Step 3: Consent from First Nations

In areas where land claims have not been settled, the Oil and Gas Act stipulates that a licence authorizing any oil and gas activity in the traditional territory of the Yukon First Nation cannot be issued without the consent of that First Nation.

Issuing a licence

Once the operations review and environmental assessment are completed to the satisfaction of the Oil and Gas Management Branch and consent from appropriate First Nations is received, a licence is issued to the applicant. The licence may have conditions or terms attached which could specify the timing and duration of operations, environmental protection measures, equipment, procedures, tests, analyses, and notification requirements to trappers, outfitters and other resource users in the area before commencement of activity.

Once the licence is issued, First Nations and territorial and federal government departments with an interest in the oil and gas activity are notified.

The issuance of an oil and gas licence does not necessarily mean that activity can immediately begin. Oil and gas activities require a Land Use Permit. In addition, proposed activities may fall under the jurisdiction of other territorial government departments and be subject to their regulations. Finally, if the estimated expenditures for the proposed project are greater than $1 million, a benefits agreement must be in place before any activity can commence.

Issuance of a Land Use Permit where required

Under the Territorial Lands Act (Canada) and the associated regulations, most oil and gas exploration activities require a Land Use Permit and an assessment under YESAA. The Land Use Permit application review also includes an operations review.

Development of a benefits agreement where required

A benefits agreement is required for all projects with estimated expenditures of over one million dollars in the Yukon. A benefits agreement identifies employment and training opportunities for Yukon residents including Yukon First Nations and residents of communities affected by oil and gas activity. It also identifies opportunities for Yukon businesses to supply goods and services to the licensee and the licensee's contractors. The agreement is negotiated by the licensee, the Minister on behalf of the Yukon government and the Yukon First Nation(s) on whose settlement land or traditional territory the oil and gas activity will be conducted.

Inspection of oil and gas activity

Once the company has been issued a licence and obtains the necessary agreements and permits, work can begin on the project. Any incidents that result in injury to workers or damage to the environment or equipment must be reported immediately to the Government of Yukon. In addition, the territorial and federal governments can at any time inspect the operation to ensure compliance with the regulations.

 

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