The Yukon government is seeing significant oil and gas interest in the Whitehorse Basin.

Twelve areas have received "posting requests” for oil and gas rights between Carcross and Carmacks as part of the Energy, Mines and Resources (EMR) disposition process.

The competitive bid process starts with industry telling the government what areas they are interested in exploring. This happens twice a year.

Last Friday, the public consultation process began. For the next 60 days, Yukoners are being asked to provide comments on any environmental, socio-economic or surface area concerns related to the areas of interest.

The 12 areas take up about 4,113 square kilometres — just a bit smaller than the Eagle Plain dispositions in northern Yukon.

Both EMR Minister Brad Cathers and representatives from the department say the sudden interest in the basin comes from a realization that the territory's electrical grid is reaching its capacity.

"What's notable about this is it's the first time requests for postings have been in the Whitehorse area,” Cathers told the Star Friday.

Cathers said people are really starting to see liquified natural gas (LNG) as the next option.

The government is hesitant to speculate what these companies might find underground and when production could start.

At a technical briefing this morning, officials from the oil and gas resources branch and the Yukon Geological Survey (YGS) explained they still know very little about the geology of the basin.

"Industry and the geological survey know about two per cent of what they would like to know,” said Richard Corbet, manager of operations for EMR's oil and gas resources. "It's way too soon to speculate what might be found down there.”

The area of interest is mostly composed of what geologists call the "Laberge Group”. This is made of mostly sandstone and conglomerates from the Jurassic period, about 160 to 180 million years old.

Maurice Colpron, a project geologist for YGS, explained that, except for a seismic survey completed in the Carmacks area in 2004, geologists only have information from surface sampling.

"It really is an incomplete picture,” Colpron said.

Debra Wortley, manager of rights and royalties for EMR, explained when the public review period ends EMR will present the minister with a report in mid-April.

Based on the areas companies have requested combined with public input, the government puts select locations up for bid.

Oil and gas companies then have the chance to submit a bid. The minimum bid for any locations is $400,000. An oil and gas permit is given to the company with the highest work commitment bid.

The successful company then has six years to drill a well in order to keep its lease active.

"It's not like we're going to see drilling of wells and production this summer,” said Wortley.

Corbet guessed the territory would not see more than two wells drilled in the next six years.

The Kotaneelee natural natural gas field in southwest Yukon is the only producing operation in the territory.

Northern Cross has the rights to 15 oil and gas leases in the Eagle Plains basin. The company announced last September — with the help of several million dollars in investment from a Chinese oil company —that it's planning on drilling two or three wells in the next year or so.

It won its first 13 leases in 2007.