Juno News - Trudeau's ‘just transition’ hurts Northern Canadians

00:00:00.000 joining me now is richard wyman president of chance oil and gas and you're the one for whom

00:00:17.320 north of 60 is not just an old canadian television show this is part of your you know these like

00:00:21.680 it is it's uh we might be the only company still trying to be active north of the 60th parallel

00:00:29.680 the uh end of the mckenzie valley pipeline has caused most of the industry to leave

00:00:36.440 pursuing shale opportunities either in canada or elsewhere in the world oh why are you still up

00:00:42.800 there then why why have you not had that same you know reduction in optimism i guess that so many of

00:00:47.660 your counterparts yeah well the primary reason is it's our only asset uh we started this business

00:00:52.900 in the fall of 1994 purchasing the three significant discovery licenses representing

00:00:59.860 the only discoveries in the northern yukon from a period of early exploration that began in 1955

00:01:06.300 and probably terminated around 1973 and uh and so we had it in our plan as a being a small company

00:01:15.340 wanting to have a large position with some resources in a region that would be viewed for

00:01:22.120 the long distant future as being energy dependent and uh and so as a little company back in the mid 90s

00:01:29.740 uh it was a pretty competitive industry down here and so we wanted to go somewhere that

00:01:35.000 didn't have a lot of traffic in the sandbox and i did a thesis in my mba on stranded resources for

00:01:43.760 local markets and so that kind of got me into it but it's taken a long time and in the period that

00:01:50.880 since we began there's been a devolution from being a federal jurisdiction to a territorial jurisdiction

00:01:56.400 and then modern land claims have led to some implementation of legislation and practices that

00:02:03.440 didn't exist when we first got involved and so we're living in a in a landscape that

00:02:09.380 has had its own economic ups and downs and because we were trying to be married to

00:02:16.500 a local economy it did have a big bearing on our pace of activity

00:02:22.060 and we have also had some challenges getting sufficient capitalization to proceed

00:02:28.940 so we've had periods where we've had a lot of money to explore and spent that money and that

00:02:36.640 exploration was aimed at uh beginning the process of evaluating unconventional natural gas and crude oil

00:02:43.600 resources in shale uh yukon government imposed a moratorium on hydraulic fracture stimulation which is

00:02:50.480 a technique that is required if you want to economically extract hydrocarbons in that kind of a geological

00:02:57.840 setting so that uh ended up with uh losing a pretty significant shareholder

00:03:05.280 and we've been doing our best to activate an exploration project in the same area

00:03:11.600 um but it's it's a slow process the uh governments in yukon have changed and they mirror the

00:03:18.000 the both the party composition the minority situation and the policies of the federal government

00:03:25.920 so it's been difficult for the last few years just just on that point for a moment because

00:03:31.520 you know if there is a declining number of companies that are wanting to invest and have

00:03:36.400 roots there why is the territorial government not welcoming one of the the last players or the last

00:03:41.440 player left doing this well you know when we started on this the yukon government and the federal

00:03:46.880 government were welcoming but uh this is back in the nineties in the nineties and even through the first

00:03:54.160 decade of this century but uh environmental ngos have done a remarkable job of scaring people about 0.99

00:04:03.200 fossil fuels and elevating the climate change agenda but the the reality is in the yukon it's it is a

00:04:11.600 uh heavily dependent on uh energy most of it has to come from the outside there is a little bit of

00:04:20.080 hydro power generation locally but uh you know it's it's a mining jurisdiction it's got big geography

00:04:28.480 generally a pretty hostile climate so its appetite for energy is high and so that you mean that was

00:04:36.320 kind of framework that we were trying to tuck ourselves into and the uh the main non-government

00:04:43.360 aspect of the local economy is wrapped around tourism to some extent but mostly mining and that's a

00:04:50.800 energy intensive industry at the best of times especially when you're in an area where it's cold

00:04:55.600 most of the time so you mean we try to position ourselves as being a local supplier adding value to the

00:05:03.760 territory trying to shorten up supply lines who and and trying to contribute to security supply reliability

00:05:12.000 supply and affordability of supply but also create economic benefits in a region that were was economic

00:05:21.440 and still is economically depressed he so i mean all those reasons still continue it's just that we haven't

00:05:29.360 caught quite the framework of of uptake and i think the other impediment uh is that um uh yukon and a lot

00:05:40.080 of jurisdictions in this country is a significant beneficiary of but uh transfer payment and it's a

00:05:48.400 it's a big number the territorial government has roughly ten percent of its budget ten percent

00:05:54.080 ninety percent of its money for its budget comes from ottawa so that so your contribution or your

00:06:00.800 industry's contribution is never going to dwarf what the government gives no that's right and so there's

00:06:05.360 there's no incentive for these governments to have genuine economic development policies because

00:06:11.840 the bills are looked after i think if uh if they were in a different situation we might be in a

00:06:17.840 different situation ourselves we'd be moving forward and and building out resources that could serve the

00:06:24.160 the regional market and at the same time there's that in this geopolitical environment we live in today

00:06:30.320 having a presence economically is a very strong basis for preserving your strategic interests in

00:06:37.680 the area too so so i mean there's a lot of things about what we're trying to do that make a great deal

00:06:42.960 of sense but we have some barriers to that have to be overcome to to proceed there's the narrative

00:06:50.720 advanced by i mean some of those environmental ngos you mentioned that oil and gas development is

00:06:55.520 antithetical to um you know indigenous priorities but you and i were chatting just before the

00:07:00.800 interview you said half your firm is in fact indigenous so what's that relationship been like

00:07:05.040 for you great the uh there there's four uh salaried employees with the company we used to have more

00:07:12.400 when we were active but uh that's still that to replace those bodies would have to come when we are

00:07:19.920 cleared to do do some more drilling but uh the staff we have are two gwich'in uh so they're born and 1.00

00:07:26.960 raised in old crow the most murderly community and in the yukon uh it's in the the area of their 1.00

00:07:34.800 traditional territory and they're both smart people uh one of them is university educated the other one

00:07:43.680 is uh uh has been involved in the implementation of their land claim that was settled in 1993

00:07:52.720 so his experience with the uh strategic objectives of the first nation at the time that they were

00:07:58.960 negotiating and settling their land claim have brought a lot of value to us and positioning ourselves

00:08:06.000 in the same area uh and they're both great guys to work with uh you know without them i think we

00:08:13.360 would be struggling even more why to bring it back to what you said about the territorial governments

00:08:20.000 not really having a an incentive to have development i mean is there a solution to that i mean if you were

00:08:26.720 to to write a federal policy would there be something that could be done about that or is that just so

00:08:32.000 baked in that it's not really because your company as you just said there is in limbo because of this

00:08:37.200 and and you really can't grow without waiting for approval that you really can't control yeah i don't

00:08:43.120 know if they're the probably the one policy would be the the uh transfer payment is getting cut

00:08:50.240 and forcing the local territory to develop economic policy that would establish its own tax base i mean

00:08:57.680 there's there are mines there a lot of it is the placer mines that are still a legacy of the klondike

00:09:04.880 gold rush over 120 years ago but there have been mines that have been operating uh aren't operating

00:09:13.280 anymore depleted or otherwise some are on the books to go to a development but they're caught in the

00:09:20.880 uh uh prolonged and unpredictable assessment practices uh leading up to getting permits

00:09:30.240 but this is another area where you know if those mines were allowed to proceed

00:09:35.280 their energy requirements are huge and the the yukon is from its own power uh generation isolated from

00:09:44.000 the rest of the continent so you need to have an energy producer there to meet that that's right yeah so

00:09:49.120 right now uh there's about i think the total power grid is something like 150 megawatts or something

00:09:57.920 like that and around 100 maybe a little more is electric hydro from runner river or dams

00:10:06.960 and the balance is fossil fuel diesel and liquefied natural gas but the marginal electron is generated by

00:10:15.680 burning diesel or or liquefied natural gas and in order to expand the the grid to meet anticipated

00:10:23.360 demand from mines that are going through some kind of a process leading up to uh development

00:10:30.400 that source of energy is yet to be determined and i don't think any of it is large enough to justify

00:10:36.400 these modular nuclear so it's going to have to be something like me showing up with some natural gas or

00:10:42.480 a crude oil or it's going to have to be trucked from edmonton or barged up from a refinery on the

00:10:47.680 uh pacific northwest through skagway and all of which free about more emissions than having

00:10:53.600 production i mean demand it's all domestic but having you know on site or in territory that's right

00:10:57.920 i mean uh there there is a benefit to having local energy supply from uh reducing collective emissions

00:11:05.600 that may not do much for the inside the ring fence of the yukon territory but uh from the point of view

00:11:12.400 of the eight or nine thousand kilometers of supply line that from wellhead through refining and

00:11:18.880 distribution back to the burner tip in the yukon that's a long long supply line and in in this

00:11:26.960 world that we live in especially with the carbon taxes that that magnifies its cost

00:11:33.360 e in everything in the yukon fuel delivery food delivery you know there's too many touch points

00:11:39.920 from source to deliver why you end up with a you know a ten dollar cauliflower or something that's

00:11:44.960 right yeah if you if you were buying milk in anubic you're paying like 17 or 18 bucks

00:11:49.520 wow for a four liter jug and there's a good chance that its shelf life in your fridge isn't going to last

00:11:55.840 very long because it's been on the road for 10 days yeah so that kind of stuff is a common theme

00:12:03.760 so you know i'd like to think that uh you know we bring a good idea i mean it's exploration still

00:12:08.880 so that the resource mass is yet to be defined that would allow you to flick the light switch on

00:12:14.800 but you got to start somewhere and uh and it's the bleeding edge of the industry is the exploration

00:12:21.680 side of it but if it does work it could have a profoundly positive impact on the on the yukon itself

00:12:29.360 uh both from a government revenue point of view but also on the local first nation communities that are

00:12:36.800 sharing traditional territory or bordering on each other in the northern yukon

00:12:41.120 because there's nothing much going on otherwise wow wonderful i hope you'll be able to have some

00:12:45.840 certainty but how long is this process for you of getting that approval that you well um covid kind of

00:12:54.000 through a bit of a monkey wrench in in the timing but uh so we started this process of

00:13:01.760 engagement with the first nations on on a multi-year exploration project in 2017

00:13:10.080 and uh we've been working on it ever since and there was a hiatus with covid uh as you might imagine

00:13:16.240 uh in the north where medical facilities are a bit limited he keeping the virus out was a preferred

00:13:23.760 um objective and the first nations themselves have a long memory of epidemics wiping out their

00:13:30.880 populations from a history of europeans traversing their territory over the last few centuries so

00:13:38.480 the nervousness was high and so we had to take a bit of a breather through that

00:13:43.360 uh but in the last year or so i think pace has picked up and uh so we're moving forward but still

00:13:50.640 it's going to take probably two to three more years before we clear the impact assessments and regular

00:13:57.440 short approval process richard wyman chance oil and gas thank you very much thank you andrew thanks for

00:14:02.800 listening to the andrew lawton show support the program by donating to true north at www.tnc.news

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Juno News - February 04, 2024

Trudeau's ‘just transition’ hurts Northern Canadians

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