Natural gas industry in Yukon viable but expensive, says report

A conventional gas industry may be viable in Yukon, but it would be expensive, says a study by the Canadian Energy Research Institute.

The group released the feasibility report in March.

"It does work from a planning perspective," said Peter Howard, with the institute, one of the report's authors. "There is area to drill, there's resources to get at."

The most feasible areas for development would be the Eagle Plain basin, followed by the Peel Plateau and Plain basin, the report said.

One scenario has gas produced at Eagle Plains for consumption within the territory, being piped from Eagle Plains to Stewart Crossing and to the Casino mine. The study estimates this would produce $452.9 million in royalty income for Yukon over 25 years.

A second scenario would move natural gas from the Peel Plateau and Plain basin and Eagle Plain basin to Stewart Crossing and then further south to the Alaska border near Haines, producing $1.3 billion in royalties for the territory over 25 years.

Howard said the cost of developing the industry is high, but that there's also a cost to doing nothing.

"If you do not develop your domestic resources, then you are going outside of your territory to buy energy," he said.

"If you develop those resources, the revenues stay inside the territory."

Howard said without an economy of scale, the cost of developing the industry in Yukon would mean the end user would pay three times more than their counterpart in Alberta.