By Jason Small

27-08-03 The US government is planning to lease the rights to explore for oil and gas in the Beaufort Sea above the Yukon despite Ottawa's protests. Earlier this week, the federal Department of the Interior announced a sale of exploration lease rights for 1,800 blocks of land under the Beaufort Sea totalling 36,900 sq km.
The vast majority of the blocks are north of Alaska in US waters. However, four of the parcels of land, totalling 65 sq. km, are north of the Yukon, not Alaska. If the boundary line between the Yukon and Alaska is extended north into the Beaufort Sea, the eastern edge of the available area in the sale is on the Yukon side of that line.
However, the United States believes that land belongs to it. Canadian Foreign Affairs spokesman Andre Lemay pointed out this is a "decades-old" dispute between the neighbouring nations. The scrap has been over the exact location of the boundary between the two nations.

Since the boundary has not been agreed upon and the US wants to sell rights to part of the disputed area, the Canadian government has expressed its displeasure at this manoeuvre. Lemay said that last February, the Canadian government expressed its concern to the possible sale which was being discussed at the time.
"We basically said, 'Hey, no, it's a no go.'" He noted that if there is a disputed area, "You can't go ahead unilaterally and do what you want." But the US government proceeded anyway.
Robin Lee Cacy, spokeswoman for the US Department's Minerals Management Service (MMS), said the sale will continue despite Canada's objection. Cacy was asked why the department proceeded with this controversial action. "These decisions were made at a higher level (in) Washington," Cacy said.

For now, Ottawa is monitoring the situation and letting the US know what its views are on the sale of the rights to the disputed land.
At this point, said Lemay, the US is going through a process which Canada does not recognize. Acting Premier Archie Lang said the territory is paying close attention to this matter. "It's a big issue for the Yukon," Lang said. (Premier Dennis Fentie is on holidays.) "We certainly are going to voice our opinions and our concerns," said Lang. He was asked how the Yukon will deal with this situation. "I don't want to approach (it) the same way Iraq did," he quipped.

The Yukon will write a letter to Alaska about the matter. The acting premier indicated that he feels the US has gone too far. "(This) definitely oversteps their bounds," Lang said of the US. "We are concerned that they're muscling a decision on borders that hasn't been resolved," added the acting premier. He thinks the US may just be testing the waters on the issue.
Lang said Washington may eventually say it was just a mistake that the area was included in the matter. He thinks the US may say, "'Oops, our pen slipped.'" The acting premier is not sure how much say the territory will have in the matter.

There is also a question of whether the region falls under the Yukon's borders, if it is in Canada. When the Yukon Act was being reviewed over the past few years, before it was passed in 2002, the Yukon Party wanted it inserted that the territory's boundary extended well beyond the shoreline on the Beaufort Sea.
For now, it's not clear if the Yukon's boundary extends any further north than Herschel Island, which is just off the mainland. Lemay noted there are a few boundary disputes between Canada and the United States. Besides the Beaufort Sea, there are also disputes in the St. Lawrence River and in the Thousand Islands area in Lake Ontario. Often, if there is a dispute but no incident requiring a need to settle it, the two countries will leave the boundary contested. To this point, there has been no incident, he said. Since the land is considered disputed, "We basically assume the US will not take any unilateral action." But that's what has happened here.

If the two sides cannot reach an agreement on the boundary, then the matter can go to an international court or arbitrator but that will not happen until "intense negotiation" between the two countries fails.
The two nations have been negotiating the dispute for the last 10 to 15 years, said Lemay, but those discussions do not fall in the "intense" category. Even if the dispute is not settled, Lemay doesn't think any company would bother to buy the rights because of a fear of getting caught in a boundary dispute.