Yukoners to Pickup Clean Up Tab on Kotaneelee Gas Well

Monday, 5 June 2017 16:01

YG to pay $1.8 million to remediate abandoned gas well from EFLO.

Yukon taxpayers are on the hook for the clean up of an abandoned gas well in the Kotaneelee gas field in southeast Yukon, after well owner EFLO went bankrupt. The territorial government became the owner of well L38 after it was not able to transfer ownership to Apache Resources which has accepted liability for three wells, as EFLO was 100 percent owners of the well.

Economic Development Minister Ranj Pillai (Porter Creek South) confirmed that indeed taxpayers were going to pay significantly, as the security deposit from EFLO would not cover the clean up. “The current estimate for the well abandonment is approximately $2.4 million. The estimated costs to the Yukon Government for this work is about $1.8 million, as the Yukon government is in possession of security in the amount of $625,000 for this well.”

Pillai says the government has an application before the Yukon Environmental and Socio-Economic Assessment Board for clean up, which he is hoping to start this summer.

NDP leader Liz Hanson (Whitehorse Centre) says the government needs to review its securities deposit program, to shield taxpayers from having to pay for clean ups. “Yukon's history is full examples of public dollars being spent having to clean up an industrial user, who has gone bankrupt or walked away. We need to learn from the past and make sure that private or corporate costs are factored in--upfront, and not left to be paid by the public down the road.”

Hanson is turning her attention to North Yukon and Northern Cross’s ambitions to extract oil and gas in the Eagle Plains Basin where test wells have been drilled. While she says she understands the government is reviewing security deposit requirements, she questions what protections for taxpayers is the government looking for? “What measures is this government taking to make sure any amount required for clean up or abandonment of gas wells, whether they are testing wells or production wells is not paid by the public?”

Pillai acknowledged that changes could be coming, following the cleanup of the Kotaneelee well. “We have to ensure within our oil and gas industry that we have the proper security in place. I think going through the process in the Kotaneelee is going to give a good run through of a process, seeing what costing looks like, and then taking a look at what's going on in North Yukon.”

(Dan Jones June 5, 2017)