Development of a homegrown gas industry in the Yukon could yield millions of dollars and hundreds of jobs to the territory, plus more energy self-reliance, according to the Canadian Energy Research Institute (CERI).

A recent study by the Alberta-based non-profit sees conventional natural gas production as a means to reduce dependence on diesel and fuel local mining operations.

Peter Howard, CERI’s president emeritus and one of the report’s three authors, cautioned against delusions of exporting conventional gas beyond the Yukon anytime soon, however.

Its remote location and minimal infrastructure could jack up prices, shrink competitiveness and render profits a far-fetched fantasy.

Shale gas extracted via hydraulic fracturing – a freighted term in the Yukon and elsewhere – was not considered in the study.

The study, released in March with a 25-year scope, found that natural gas produced and used exclusively inside the territory could pile on $875 million to Yukon GDP, spike taxes by $101 million and provide 6,000 “person years” of employment between 2017 and 2041.

That translates into hundreds of jobs and millions of dollars in royalties, Howard said.

“Currently, the Yukon buys diesel fuel to run part of its power system, and that’s money that leaves the territory and enters the province of Alberta or B.C. If you develop it, then those dollars would actually be re-injected back into the local economy,” he told the Star this morning.

About 99.5 per cent of the territory’s electricity is produced via hydroelectric dams and wind, according to Yukon Energy.

Diesel generators serve mostly as backup energy sources in the winter, when demand goes up and hydro production goes down.

“The power generation would then be relying on natural gas instead of diesel fuel, so it’s a much cleaner fuel,” Howard said.

The scenario envisioned by the economic impact study sees the Yukon pumping out 50 million cubic feet per day of natural gas, “half to power generation and half to feed the mine sites,” Howard said.

A 500-kilometre pipeline would carry natural gas extracted from conventional wells — drilled 2,800 metres down at $4 million to $5 million apiece — from Eagle Plain to Stewart Crossing.

There it would be put to either electricity generation or conversion to liquefied natural gas (LNG). The LNG would then travel 125 kilometres west via pipeline to the Casino Mine, the largest potential mining project in the territory’s history.

Except for the Dempster and North Klondike highways, virtually all infrastructure under this scenario would need to be built from scratch.

That would include the wells, pipelines, gas-fired generating facility, LNG conversion plant and Casino mine itself.

“Eagle Plain gas could well serve the Yukon’s needs as the territory grows since it is cheaper to develop than new large-scale hydro, is less GHG-intensive than diesel, and more reliable than intermittent wind,” the report states. (GHG refers to greenhouse gas.)

“Honestly, at the end of the day, it’s more about developing a natural resource for the benefit of the citizens of the Yukon,” Howard added.

The report, titled Economic Impacts of Hydrocarbon Development in the Yukon Territory, examines a second scenario whereby natural gas would be exported from the Peel region to Haines, Alaska, and ultimately to ports in Asia.

While linking the Yukon to the international gas market could offer “more economic benefits,” the study warns such a move would expose the territory to price volatility stemming from the whims of the global marketplace and a possible excess of supply.

Howard noted 18 natural gas projects proposed along the B.C. coast alone.

On top of an LNG-based proposal in Alaska, many more in the works in the Gulf of Mexico, Australia, East Africa and other regions could glut the market, he said.

Howard also noted the uncertainty surrounding the Peel River watershed, currently off limits for development pending a Yukon Court of Appeal hearing in August.

Depending on the final judgment, 20 to 71 per cent of the region could be open to resource companies.

“We recognize that not all the basin availability has been sorted out,” he said.

The report comes in the wake of the Yukon government’s announcement on April 9 that it will work toward possible hydraulic fracturing operations in the Liard basin, now available for fracking.

The decision prompted renewed outcry from many of the 7,000 Yukoners who have signed an anti-fracking petition and voiced sustained criticism of the prospect.

It also came hand-in-hand with acceptance of the 21 recommendations made last January by the select committee on fracking.

These include First Nations consultations and consent and – key for possible natural gas exploration further north – baseline data collection on air, water and seismic activity around the Yukon with a focus on the Liard and Eagle Plain regions.

About three-quarters of the Eagle Plain basin is currently open for development.