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Court tosses parts of oil company's lawsuit against Yukon government

A Yukon Supreme Court judge has thrown out part of a lawsuit against the territorial government. The suit stems from a 2015 moratorium on hydraulic fracturing, or fracking.

Chance Oil and Gas seeking up to $2.2 billion in damages over fracking moratorium

Chance Oil and Gas, formerly Northern Cross, drilled four exploratory wells in the Eagle Plains area of Yukon in 2012-13. (Northern Cross)

A Yukon Supreme Court judge has thrown out part of a lawsuit against the territorial government. The suit stems from a 2015 moratorium on hydraulic fracturing, or fracking.

Chance Oil and Gas, formerly Northern Cross, is seeking up to $2.2 billion in damages after the government imposed the moratorium.

The company's statement of claim, which was re-filed a year ago, alleges the government's fracking ban amounts to an "unlawful de facto cancellation" of the company's oil rights in the Eagle Plains area. 

In a statement of defence filed in late March, the government says it never granted Chance the right to establish commercial production at Eagle Plains. The statement says Chance was only ever granted exploration permits that gave it the right to drill test wells and sell any oil it found during those tests.

In a written ruling issued on Wednesday, Supreme Court Justice Edith Campbell struck down three claims against the government, including a claim of unlawful interference with economic interests.

She also threw out Chance's request to order the government to exempt it from the fracking ban.

Campbell also granted a request from the government to remove Energy Minister Ranj Pillai from the suit.

The former Yukon Party government issued the fracking moratorium in 2015 following months of hearings on the practice by a select committee of the Legislative Assembly. Fracking is only permitted in the natural-gas rich Liard Basin in southeast Yukon, and only with the approval of local First Nations.

The Liberal government, elected in November of 2016, later said it would not issue permits for fracking operations anywhere in the territory.

With files from Chris Windeyer

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