Report to the Minister

Transcription

1 Report to the Minister Spring 2013 Request for Postings Review Eagle Plain Basin Prepared by the Division Head Department of Energy, Mines and Resources Government of Yukon June 6, 2013

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3 EXECUTIVE SUMMARY Twice annually, the Government of Yukon (YG) may conduct an oil and gas rights disposition if an expression of interest is received through a Request for Posting (RFP). The Spring 2013 RFP closed on January 16, Two locations in the Eagle Plain oil and gas basin were included in the disposition. The map that was included in the RFP Review can be seen on page 4. As a result of the review, this map has been revised for a potential CFB. The map for the proposed CFB is on page 5. The locations are located entirely within the boundaries of the 2009 North Yukon Regional Land Use Plan (NYRLUP). The three Land Management Units (LMU) overlapped by the RFP are all designated as either Zone I or Zone II Integrated Management Areas (IMA) which, under the NYRLUP are considered to be a part of the working landscape and are areas where oil and gas, mining, and other land uses are allowable. The purpose of this report is three-fold: to summarize the responses received in the Public Input and Review process (RFP Review) which calls for input on socio-economic, environmental, and surface access concerns; to encapsulate the responses from Energy, Mines and Resources (EMR), which includes suggestions on how concerns may be addressed; and to make a recommendation to the Minister about a potential Call For Bids (CFB). The RFP Review began with a Ministerial news release on January 25, 2013 and concluded on March 28, Submissions were received from YG departments, the Yukon Conservation Society (YCS), the Canadian Parks and Wilderness Society (CPAWS), the Porcupine Caribou Management Board (PCMB), and members of the public. The Vuntut Gwitchin Government (VGG), on a government to government basis, provided comments on the postings as well. Key concerns raised were: The importance of the Eagle Plain region as fall and winter range for the Porcupine Caribou Herd. The need for consideration of cumulative effects of oil and gas activities in Eagle Plain, particularly in respect to the Porcupine Caribou Herd. The importance of wetlands, riparian zones and the integrity of wildlife corridors in the area. The effect the northern portion of the postings may have on determining the final boundary of the Summit Lake Bell River Protected Area final boundary. The significance of the Dempster Highway to tourist travel, the wilderness tourism industry, and the oil and gas industry. The requirement for careful placement and management of surface access from the Dempster Highway to the locations. Also, requests were made to extend the RFP Review deadline and also to postpone oil and gas disposition processes in Yukon until a public dialogue on oil and gas activity and hydraulic fracturing is completed as per Motion 309. The Division Head concluded that the concerns raised can be addressed through the use of mitigative measures, best management practices, and the existing regulatory regime; and also a modification to the NW portion of location #2013S002. It is the recommendation of the Division Head that a Call for Bids proceed for the locations included in the Spring 2013 Request for Postings in the Eagle Plain basin as shown on page 5. June 6, 2013 Executive Summary

4 MAP OF RFP REVIEW LOCATIONS This is the map that was included in the RFP Review. EMR has listened to concerns about the proposed boundary for the Summit Lake Bell River Park boundary and modified location 2013S002 accordingly. A map of the locations for a proposed Call for Bids is on the next page. See next page for revisions to location 2013S002 for the proposed Call For Bids. June 6, 2013 page 4 of 18

5 Report to the Minister: Spring 2013 Request for Postings MAP OF PROPOSED CALL FOR BIDS Both locations are situated within the Vuntut Gwitchin First Nation s Traditional Territory; the Tetlit Gwich in Council s Secondary Use Area; and the Integrated Management Area land use designation of the NYRLUP. June 6, 2013 page 5 of 18

6 INTRODUCTION Report to the Minister: Spring 2013 Request for Postings Pursuant to Yukon's Oil and Gas Act and the Oil and Gas Disposition Regulations, rights to oil and gas are granted by the Minister through a competitive disposition process. A complete disposition process includes a Request for Postings (RFP), a RFP Review, a Call for Bids (CFB) and finally the issuance of an Oil and Gas Permit. The RFP provides an opportunity for industry to express interest in locations where they wish to obtain oil and gas rights. Based on submissions received in a RFP, YG may proceed with the disposition process by calling for a RFP Review. Pursuant to section 6 of the Oil and Gas Disposition Regulations, the RFP Review is an opportunity for First Nations, government agencies, and the public to identify environmental, socio-economic, and surface access concerns related to the requested locations. The Division Head is required, as per section 8 of the Oil and Gas Disposition Regulations, to report these concerns and make a recommendation to the Minister on whether or not to proceed with a CFB, including the shape and size of locations to be offered in a Call for Bids. The Minister may either accept or reject the recommendation. If a CFB goes ahead, interested persons are invited to submit work bids for locations included in that CFB. A successful bidder is issued an Oil and Gas Permit granting oil and gas rights for the location. A successful bid is determined based on the sole criterion of the highest work bid for a location. Oil and gas activity has been carried out in Yukon since the mid-1950 s, however the industry remains relatively small largely due to the fact that Yukon s northern oil and gas basins are stranded. Seven disposition processes have been held in northern Yukon since the new disposition process was implemented in In those seven dispositions, RFPs were received requesting 43 locations in the Eagle Plain and Peel Plateau-Plain sedimentary basins. Following the RFP Reviews, a total of twenty-eight locations were made available in the subsequent CFBs. From these, sixteen Oil and Gas Permits were issued with fifteen of them being situated in Eagle Plain. The value of work bids for these Permits exceeded 23.3 million dollars. The Spring 2013 RFP closed on January 16, 2013 and a Ministerial News Release on January 25 th announced that the RFP Review would occur. Two locations were requested in the Eagle Plain oil and gas basin. The NW corner of 2013S002 was modified to remove an overlap with the Summit Lake Bell River Protected Area as mapped in the NYRLUP. The map that was included in the RFP Review can be seen on page 4. As a result of the review, this map has been revised for a potential CFB. The map for the proposed CFB is on page 5. June 6, 2013 page 6 of 18

7 The launching of the RFP Review was communicated to the Vuntut Gwitchin Government, Tetlit Gwich in Council and community meetings were offered. Communication of the RFP Review was also made to environmental groups, Yukon government departments and the public. Advertisements were placed in English and French language newspapers, and the Oil and Gas Resources Branch (OGR) web page was updated with information and maps about the requested locations. This information was distributed during February and March 2013 giving respondents more than 60 days to submit comments. The RFP Review concluded on March 28, The RFP Review package, including detailed maps of the requested locations, was posted with the news release on the OGR web page ( in late January In an effort to facilitate dialogue, OGR staff made follow-up telephone calls, and provided additional information to First Nation government staff, and encouraged comment on socio-economic, environmental and surface access concerns. SUMMARY OF CONCERNS RAISED AND THE EMR RESPONSE 1.0 ENVIRONMENTAL CONCERNS 1.1 Land Use Planning The two requested locations are within the North Yukon Regional Land Use Plan (NYRLUP) area. An electronic copy of the NYRLUP can be viewed at the following web link: What We Heard The Department of Environment (DOE) recommended that any CFBs that would impact discussions on finalizing the Summit Lake Bell River Park boundary should be avoided. They recommended delaying a CFB for the northern one-third of both postings until after the Park boundary is established. Should activity go ahead, the DOE stated that because the locations are in NYRLUP Zones 1 and 2, having high ecological and heritage/cultural values, Land uses are acceptable provided they do not result in creation of significant functional disturbance. All-season industrial infrastructure is discouraged. The Yukon Conservation Society (YCS) stated that if, when finalized, the boundary for Summit-Lake Bell River Protected Area connects with the Whitefish Wetland Protected Area, posting 2013S002 could be within a designated Protected Area. They feel that it is inappropriate for industrial development to determine boundaries of protected areas, which would be the case if this area were put out for bids at this time. June 6, 2013 page 7 of 18

8 EMR Response The RFP overlaps Land Management Units in the NYRLUP which are designated as either Zone I or Zone II Integrated Management Areas (IMA) based on their respective values and the sensitivity of the landscape there. Under the NYRLUP, IMAs are considered to be a part of the working landscape; areas where oil and gas, mining, and other land uses are allowed, subject to the NYRLUP recommendations, and regulatory processes. There is no overlap with posting 2013S002 or posting 2013S001 as provided in the Spring 2013 RFP Review and the Summit Lake Bell River Protected Area as mapped in the NYRLUP. Since 2009, YG has been working to delineate a boundary for a future Summit Lake Bell River Territorial Park through an interdepartmental working group that includes the Department of Environment (DOE) and Energy, Mines and Resources (EMR). The NYRLUP, which was agreed to and signed off by both VGG and YG, provides for conservation of Yukon s wild and natural places and a sustainable development framework for land management in the North Yukon Planning Region. The NYRLUP also addresses key issues such as oil and gas development within a portion of the annual range of the Porcupine Caribou herd. Based on Table 3.1 of the NYRLUP, IMA zones I and II are described as follows: IMA Zone Zone I Zone II Management Intent Lowest Development Low Development Description Very high ecological and heritage/cultural values within a sensitive biophysical setting. Maintaining ecological integrity and protecting heritage and cultural resources is the priority. Land uses are acceptable provided they do not result in creation of significant functional disturbance. All-season industrial infrastructure is discouraged. High ecological and heritage/cultural values within a moderately sensitive biophysical setting. Maintaining ecological integrity, protecting heritage and cultural resources, and minimizing land use impacts is the priority. Proponents of oil and gas activity will have to take into account the disturbance levels, and consider the specific management considerations and general management directions of the NYRLUP in their project proposals. Mitigative measures to minimize and address potential impacts and associated issues exist. As an example of cumulative effects indicator levels applicable to development in the area under review, more than 60% of the two RFPs is LMU 4B which is designated as June 6, 2013 page 8 of 18

9 IMA Zone II. The corresponding cautionary level for cumulative effects indicators for this LMU is set as 0.15% of the total LMU area (1,331 km2) which is equivalent to 200 hectares of surface disturbance or 200 kilometres of linear disturbance. While the NYRLUP states that, impacts (from oil and gas exploration and development) could affect valued ecological resources, including the Porcupine Caribou Herd, 1 the plan states that standard oil and gas industry practices have a much smaller footprint and impact on ecological values than practices used in the 1960s. Current operating practices significantly reduce the potential for major long term impacts. Given the current low levels of activity, existing site-specific best management practices, used in combination with the direction provided by this plan, are considered adequate to mitigate potential impacts of oil and gas activities Porcupine Caribou Herd (PCH) What We Heard The importance of caribou to First Nation citizens and other Yukoners and the need to protect caribou habitat in northern Yukon was raised by some respondents. The VGG identified the reliance of Gwich in communities on the PCH. Fortunately the current caribou population is considered healthy, at the same time, caribou are essential to the health of the entire eco-system, and the Gwitchin people have experienced impacts when the herd was in decline, and wish to maintain the health of the herd. There is a concern for impacts on caribou migration routes, and stresses on the herd from industrial activities. The Porcupine Caribou Management Board (PCMB) identified a concern for the cumulative impacts of oil and gas activity on the herd. The impact on the herd has a corresponding impact on First Nations and their ability to participate in Porcupine Caribou traditions that have bonded community members together and to the earth for millennia. The PCMB worked with the caribou herd s user groups to develop a harvest management strategy, and advocates that just as traditional caribou users are being asked to alter harvesting activities, then other human activities that (may) impact the PCH ought to be considered as well. The PCMB put forward the following recommendations: Consider cumulative impacts when considering which, if any, RFPs to accept. 1 Vuntut Gwitchin Government. Yukon Government. (June 2009). North Yukon Regional Land Use Plan NICHIH GWANAŁ IN LOOKING FORWARD. Pages Vuntut Gwitchin Government. Yukon Government. (June 2009). North Yukon Regional Land Use Plan. NICHIH GWANAŁ IN LOOKING FORWARD. Pages June 6, 2013 page 9 of 18

10 Priority should be given to projects that minimize potential for damage to the landscape. Examples include: o Areas that can be accessed using existing roadways or shared roadways; o If access roads must be constructed, the shorter the road the better; o Areas that have been identified as having a more resilient landscapes are preferable; and o Areas that can be accessed by using water bodies to create winter-only roads. The DOE advised that the PCH is the primary wildlife value overlapping the RFP locations. The herd uses the area as rutting grounds and winter range over an estimated time period from October 1 st to May 15 th, therefore it is anticipated that oil and gas activity would have impact on the herd in the autumn and winter. Disturbance to the caribou in the eastern portion of their winter range, has the potential to displace (the PCH) from the area during exploration activities and recommends that, proponents will need to take this into account and determine ways to mitigate the potential for increased stresses on the herd. The Yukon Conservation Society also submitted concerns for the PCH in this area, saying it is one of the most significant caribou concentrated use areas in the region, quoting the NYRLUP; and saying the PCH may be present in four seasons. EMR Response YG has a finalized PCH Management Plan in place and is also in the process of developing a set of best management practices (BMPs) for caribou. The BMPs will, along with mitigation measures, address the impacts from potential interactions of caribou with oil and gas activities. EMR will continue to support the initiatives of the DOE and PCMB to ensure the integrity and protection of the PCH and other northern caribou populations. EMR is confident that the conservation measures implemented by the DOE, the PCH Management Plan, and the use of BMPs and mitigation measures will ensure the protection of the PCH and other northern caribou populations. Examples of mitigative measures for caribou and other wildlife species can be found in the Significant Values and Mitigative Measures Options: a Document for Discussion 3 which was created by EMR, First Nations, government agencies, and stakeholder groups. EMR will continue to collaborate with government agencies, First Nations, and stakeholders to ensure the most up-to-date information is used in planning and assessing oil and gas activities. 3 June 6, 2013 page 10 of 18

11 1.3 Riparian Areas, Water Quality, Fisheries and Wildlife Habitat What We Heard The importance of maintaining high water quality standards and protecting fish habitat and riparian areas was identified by respondents. The VGG submission notes that both locations in the RFP are adjacent to, and cross tributaries, that flow past the community of Old Crow and there is concern in the community about potential impacts given the proximity. During Land Claims negotiations the Vuntut Gwitchin people placed emphasis on protection of the entire watershed that flows past Old Crow. The Whitefish Wetland region was identified as containing significant moose populations and supports the majority of harvest activity from Old Crow during the fall hunting season. Industrial development could create an obstacle for moose in annual travel corridors. Moose population surveys are required. Beaver and muskrat are susceptible to changes in water depth in winter. Winter operations that derive their water source from Eagle or Rock River should note that both rivers experience very low winter flows and dramatic variations in summer. There is a concern that disruptions or alterations in a headwaters area can have effects downstream. The summer season is crucial to waterfowl, swans, and raptors the time for reproduction and molting is short, and a period when waterfowl are most vulnerable. Also, the RFP area contains high potential for grizzly and black bear denning sites Grizzly bears require large intact home ranges and display high avoidance to disturbances. There is a concern about the potential for hydraulic fracturing, when our elders directed leadership to allow certain areas for industrial development, they could not have anticipated unconventional shale gas drilling methods such as hydraulic fracking [sic]. VGG calls for baseline water-quality studies. The DOE identified the need for baseline water quality and quantity data as oil and gas development proceeds. Riparian areas are important to wildlife. The DOE stated that riparian areas can be extremely important to local moose populations. They represent the only suitable habitat for moose and serve as seasonal movement corridors migrating through the area. Riparian movement corridors should be avoided whenever possible and any exploration or access road development be minimized. The Yukon Conservation Society cited the NYRLUP in reference to the Eagle-Bell River and LaChute River as being important wildlife corridors and habitat areas for caribou, moose, grizzly bear, sheep, and fish. Small portions of both locations overlap Rock River-Mount Joyal which are also indicated as important habitat. The Whitefish Wetlands was included in comments as an ecological and culturally significant wetland complex. June 6, 2013 page 11 of 18

12 EMR Response EMR and the DOE are working together to organize a water workshop to better understand how jurisdictions manage and regulate water as it relates to oil and gas activities, and identify any water information that needs to be collected before, during, and after oil and gas activity. EMR has a legislative regime in place that is able to regulate all oil and gas activity including hydraulic fracturing. EMR is amending all five of our oil and gas regulations, including the Oil and Gas Drilling and Production Regulations. Impacts on fish habitat and use of water is carefully controlled and monitored by several government agencies including the Yukon Water Board, the federal Department of Fisheries and Oceans, Environment Canada, and Yukon Department of Environment. Pre-planning by industry, the utilization of best management practices for linear development and mitigative measures similar to those in Significant Values and Mitigative Measures Options: a Document for Discussion, January 2009 will help ensure that riparian areas are minimally disturbed. Another reference publication is Best Management Practices for Works Affecting Water in Yukon 4. YG recognizes the importance of healthy, functioning riparian areas and fisheries habitats as well as the need to maintain high water quality, and is confident that environmental assessments of activities are required under the Yukon Environmental and Socio- Economic Assessment Act (YESAA), the utilization of best industry practices and existing legislation can safe-guard these vital environmental values. The NYRLUP also contains recommendations, strategies, and best management practices for sustaining regional fish habitat. 1.4 Cumulative Effects What We Heard Concerns about the possible cumulative effects of oil and gas activities were highlighted by VGG, DOE, YCS, and PCMB. While the PCMB supports responsible development, the PCMB, along with the DOE noted the increasing interest from the oil and gas industry in northern Yukon and possible cumulative impacts on the winter range of the PCH. DOE also noted that there is very good baseline data for the herd that will assist proponents in addressing cumulative environmental effects of oil and gas activities. The DOE and the PCMB support the use of a long-term monitoring program. The PCMB has initiated a multi-year study to evaluating cumulative effects on the herd. 4 June 6, 2013 page 12 of 18

13 The DOE also mentioned the concern of cumulative effects on the herd from increased human contact: Hunting and traffic along the Dempster Highway currently provide disturbance impacts to caribou adjacent to the postings. The VGG asked that past activities be considered for inclusion into cumulative impacts, and recommended that activity occur in the winter to minimize impact. TheVGG recommended the rejection of development in the locations until there is an Eagle Plains access management plan in place. The DOE stated: Given the incremental nature of oil and gas exploration activities and development, coupled with the environmental sensitivities inherent to the Eagle Plains / Dempster area, a Cumulative Effects Assessment (CEA) would be an integral component of any future proposed activities. EMR Response The amount of development on the two RFP Posting locations, including oil and gas activity must fall within the guidelines set out in the NYRLUP. EMR will monitor the relevance of the indicators proposed in the NYRLUP to determine if they accurately reflect cumulative effects and if the levels recommended by the plan are appropriate or adequate to protect the valued ecological and cultural resources. The YESAA requires that an environmental assessment be conducted for proposed oil and gas activities which includes an analysis of cumulative effects. EMR will continue to work with YESAB to ensure that environmental and cumulative effect assessments include all known and planned activities. Research is also being conducted by EMR on the recovery of seismic lines, roads, and other linear disturbances in the Eagle Plain, Peel Plateau-Plain and Liard oil and gas basins. The draft report Investigation of Seismic Lines and Associated Disturbances (August 2008), is available from OGR. This study will assist YG in determining the current anthropological footprint in the oil and gas basins as well as establishing recovery curves for past and future disturbances. 2.0 SOCIO-ECONOMIC CONCERNS 2.1 Tourism and Economic Potential on the Dempster Highway What We Heard The Wilderness Tourism Association of Yukon, the Department of Tourism and Culture (DTC), and the DOE have identified the importance of the Dempster Highway to tourists traveling by road and for the wilderness tourism industry. VGG said The Eagle Plains Oil and Gas Basin economic potential can only be achieved if (YG) co-manages industrial development on a scope and scale that is acceptable and sustainable to our arctic environment. June 6, 2013 page 13 of 18

14 EMR Response Tourism along the Dempster Highway is an active and important part of the economy in northern Yukon. EMR has worked closely with the Wilderness Tourism Association of Yukon and the DTC to develop the Best Management Practices for Wilderness Tourism found on the OGR web page Through the use of best management practices YG is confident that tourism along the Dempster Highway and the wilderness tourism industry will continue to be an important component of the economy of northern Yukon. If a CFB is approved, companies interested in bidding on the requested locations will be advised that impacts of oil and gas activities on tourism values along the Dempster Highway can be reduced by the implementation of BMPs such as those found in the Best Management Practices for Wilderness Tourism. In addition, direct communication between companies and wilderness tourism operators are encouraged, to address specific concerns and review potential mitigation measures. 2.2 Heritage Values What We Heard VGG stated the area is traditionally, and currently an integral area used for trade and travel purposes. The strategic and resource potential of this area is reflected in the multitude of trail networks, archaeological sites, camp sites and place names. The DTC stated, Systematic heritage resource inventories are limited in the area of 2013S001 and 2013S002 and heritage values are largely unknown. Three archaeological sites have been identified in 2013S001 and (there are) areas of high potential for the presence of additional archaeological sites. Palaeontological sites are also likely in the locations, and a heritage resources overview assessment is highly recommended in advance of any oil and gas activity. The DOE indicated it is aware of a traditional travel route between Fort Macpherson and Old Crow along the LaChute River which has recreational and heritage values. EMR Response Those conducting oil and gas activities must comply with the Yukon Historic Resources Act which requires that any finds of heritage sites, historic sites, or objects are reported and left undisturbed. Known heritage and cultural information must be identified before companies proceed with any activity to ensure their protection and heritage assessments undertaken. YG has developed Best Management Practices for Historic Resources which can be found on the OGR website EMR expects companies to work in collaboration with First Nations to identify sites and conduct June 6, 2013 page 14 of 18

15 activities in such a way that culturally sensitive areas are not negatively impacted by oil and gas development. 3.0 SURFACE ACCESS CONCERNS The NYRLUP states that the Dempster Highway is recognized as critical infrastructure for future regional economic development 5 and that the Dempster Highway corridor is intended to encourage the location of land use activities within the existing zone of influence of the highway. The NYRLUP goes on to identify new access routes off the Dempster Highway as one of the most important management issues facing the region in the future. What We Heard Concerns were raised about the distance of the location from the Dempster Highway, and the obvious need for access to the locations to conduct exploration. VGG: The area of interest is situated a considerable distance away from the Dempster Highway, without knowing the access routes to the RFP our comments are limited. The PCMB is concerned that increased traffic on the Dempster Highway could lead to increases in the direct loss of caribou due to road-kills or injuries and recommends that existing roadways be used and shared, that roads be constructed to as short a distance as possible, and where possible, winter-only access be created by utilizing water bodies to construct ice-roads. The Department of Highways and Public Works is currently working on an access management plan for the Dempster Highway. That plan is in its early stages. EMR Response YG is confident that the use of best management practices and mitigative measures such as those found on the OGR website for seismic activities: will limit the detrimental effects of new access. Companies are required to address all regulatory requirements associated with surface access. Oil and gas industry proponents are encouraged to review regulatory requirements for access outlined in Additional Information Regarding the Regulation of Oil and Gas Activities and the Issuance of Oil and Gas Rights in Yukon found on the OGR website, When all-season roads are required to access producing wells, EMR will work with disposition holders to undertake access planning. There are also several BMPs for seismic exploration that address access activities. These include the reduction of new public access and travel corridors, as well as managing the access needs of all users (industrial, 5 Vuntut Gwitchin Government. Yukon Government. (June 2009). North Yukon Regional Land Use Plan NICHIH GWANAŁ IN LOOKING FORWARD. Pages June 6, 2013 page 15 of 18

16 commercial, recreational and subsistence activities). In cases where the impact of conventional seismic activities cannot be tolerated, access for low impact seismic or geophysical exploration could be allowed. EMR will ensure that when companies propose activities, any associated access plans include consideration for BMPs, regulatory approvals and YESAB recommendations. In addition, access from the Dempster Highway will require a Dempster Highway Development Authorization under regulations pursuant to the Yukon Area Development Act. These regulations were put in place to control access and hunting along the Dempster Highway within the range of the PCH. Companies are required to contact the DOE regarding permits under the Dempster Highway Development Area Regulations. 4.0 Concerns from the Public and NGOs What We Heard Approximately 35 responses were received from the public in this RFP Review compared to thousands received in the Spring 2012 RFP Review. Of these, 4 people responded in favour of oil and gas development, although it was unclear if those favourable responses were in specific reference to the current locations under review, or endorsed oil and gas development in Yukon in general. The remaining responses included a call for a total ban on hydraulic fracturing, and a postponement of the disposition process until a public discussion is conducted. Ninety-one persons signed forms requesting an extension to the RFP Review. Public concern also included a call for baseline water quality testing, and the maintenance of habitat integrity for caribou and other wildlife species. YCS sent, a formal request to Yukon Government to postpone the Spring 2013 Oil and Gas Disposition Request for Postings that is currently in the public review period until after the Yukon Government s oil and gas consultation. Failing a postponement of the disposition process, at the very least YCS asks Yukon Government to extend the public review period by 60 days. CPAWS asked, Please accept this letter as formal request to Yukon Government to postpone the Spring 2013 Oil and Gas Disposition Request for Postings, currently ending March 28 th, until after the Yukon Government s oil and gas consultation has been completed. If a postponement is not made, we ask that the current public review period be extended by a minimum of 60 days. June 6, 2013 page 16 of 18

17 EMR Response On November 27, the Yukon legislature passed a motion, which in part committed YG to Motion No. 309, and reads (in part) as follows: THAT this House urges the Government of Yukon to: (3) work with the Vuntut Gwitchin First Nation and stakeholders to facilitate an informed public dialogue about the oil and gas industry, including risks and benefits of hydraulic fracturing, also known as fracking, before any regulatory approvals or permitting allows the use of this activity in Yukon. 6 On April 24, a motion was tabled in the Yukon legislature proposing that a select committee regarding the risks and benefits of hydraulic fracturing be established. Permits that may be issued as a result of a CFB grant oil and gas rights. Oil and gas Permits do not bestow a licence to carry out oil and gas activity. This RFP Review is only one step in a complex process that must be conducted before the obtaining of rights to explore for oil and gas. Further into the process proponents applications are reviewed under YESAA before licences to carry out oil and gas development or activity, including hydraulic fracturing may be issued. These licences, if issued, often come with rigorous and responsible terms and conditions attached. Although the industry is small in comparison with other jurisdictions, there are positive economic benefits to be realized from the safe development of oil and gas in Yukon, and this energy source is still critically needed. EMR is working diligently and has the expertise to ensure that the legislative regime is current with existing trends and industry standards in oil and gas development. EMR will continue to invite public input on the oil and gas disposition process, and inform proponents wishing to carry out oil and gas activity in Yukon about the technical and cultural characteristics integral to this territory. 6 Yukon government. Tuesday November 27, Yukon Legislative Assembly, First Session of the 33 rd Legislature, Order Paper No. 59. page 3. Retrieved April 26, 2013 from June 6, 2013 page 17 of 18

18 RECOMMENDATION OF THE DIVISION HEAD The Division Head has made a recommendation pertaining to the Spring 2013 Disposition. The Minister has two options with respect to the proposed Call for Bids locations and Division Head recommendation and may choose to: 1. Accept the locations and recommendation of the Division Head, or 2. Reject the locations and recommendation of the Division Head. It is the recommendation of the Division Head that a Call for Bids proceed for the locations included in the Spring 2013 Request for Postings in the Eagle Plain basin as shown on page 5. If the Minister accepts this recommendation, there are individuals and agencies who responded during this and previous RFP reviews that may feel that government did not listen to their concerns. The Division Head is of the opinion that the environmental, socio-economic, and surface access concerns raised during the Spring 2013 RFP Review can be addressed by the use of mitigative measures, BMPs and the existing regulatory regime. It is important to re-state that the RFP is only the first step toward the disposition of oil and gas rights. Further consultations with First Nations, government agencies and the public will take place prior to the licensing of oil and gas activities. If activities are licensed, only a relatively small footprint on the land is temporarily disturbed for exploration activity, and that footprint must fall within the thresholds established in the NYRLUP. EMR continues to work diligently to ensure the orderly and responsible development of an oil and gas industry in northern Yukon. June 6, 2013 page 18 of 18