Energy, Mines and Resources

Oil and Gas Resources

Authorizing Activities

Additional Information Regarding the Regulation of Oil and Gas Activity and the Issuance of Oil and Gas Rights in Yukon  26 KB

Under 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.

Liquefied Natural Gas Facility Licence is required for any activity related to the construction and operation of a plant that stores, vaporizes, or liquefies 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. YESAB Assessment
Step 2. Applications
Step 3. Authorization

Step 1: YESAB Assessment

When a proponent requires a licence, their proposed activity or project could be assessed under the Yukon Environmental and Socio-economic Assessment Act (YESAA), a legislated process which considers environmental, social, and economic impact, and provides an opportunity for public input before approval can be given. The legislation provides for a single assessment process for projects under federal, territorial or First Nation jurisdiction, conducted by the Yukon Environmental & Socio-economic Assessment  Board (YESAB) or one of its six Designated Offices. Applications for certain activities will not trigger a full review by YESAB (refer to YESAA for exempted activities).

It is the proponent’s responsibility to meet the requirements of both the assessment and regulatory processes in order to obtain a licence in order to operate. The proponent may require other permits or licenses for the activities being proposed, outside of those administered by the Oil and Gas Resources Branch. The YESAB assessment considers comprehensive project activities in the assessment. More information about the environmental assessment process can be found in EMR Assessment Regulatory Guide  601 KB.

Once the YESAA assessment is complete, YESAB provides a recommendation report to the authorizing government agencies and/or departments. This forms the basis of a Decision Document outlining mitigating conditions of the proponent.

Step 2: Application

A license application is submitted to the regulator for applicable licenses and/or permits. This procedure may occur in concert with the YESAA process but cannot be sanctioned without a Decision Document. Guidelines and checklists are available from Oil and Gas Resources for licenses under the Yukon Oil and Gas Act and Regulations.

An operational review by Oil and Gas Resources occurs to confirm completeness of the application and receipt of fees. The application is then examined to ensure that the proposed operations comply with the Yukon Oil and Gas Act and appropriate regulations. Adherence to other territorial legislation and standards (such as the Department of Environment, Department of Community Services, and Yukon Worker’s Compensation Health and Safety Board) 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 license regarding operations may be stipulated or the license may be denied.

Step 3: Authorization

Issuing a licence

Once the operations review and environmental assessment are completed to the satisfaction of the Oil and Gas Resources Branch 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. YESAB is also notified.

The issuance of an oil and gas licence does not necessarily mean that activity can immediately begin. Oil and gas activities may require a Land Use Permit and/or a Water Licence. 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.

When is a benefits agreement required?

Section 68 of the Yukon Oil & Gas Act  1.1 MB states that no oil and gas activity shall be carried out under the authority of a licence unless there is in effect a benefits agreement. Where work related to the oil and gas activity is anticipated to entail costs less than $1 million, in any 12-month period, a benefits agreement is not required.

Issuance of a Land Use Permit and Water Licence where required

Under the Territorial Lands Act (Yukon) and the associated regulations, most oil and gas exploration and production activities require a Land Use Permit from the Land Management branch and an assessment under YESAA.

Under the Waters Act (Yukon) and associated regulations, water withdrawal or waste disposal over certain thresholds may require a Water Licence from the Yukon Water Board and an assessment under YESAA. This may be required for well completion methods, potable camp needs, construction of an ice road, or otherwise (see Water Inspection Section).