August 16, 2001 --- Vol. 7, No. 100August 2001

British Columbia Natives threaten to cap gas boom

Three Indian communities in northeastern British Columbia have set up blockades of a Petro-Canada gas well site and pipeline project, threatening the hottest gas play in North America.

Petro-Canada is a new leaseholder in the Brooks Range foothills of Alaska.

Treaty 8 First Nations say they are overwhelmed by the oil and gas rush in their region, worried about the cumulative impact on hunting grounds and frustrated by the B.C. government's reluctance to protect aboriginal rights.

A spokesman for the Halfway River First Nation said the blockade will last as long as it takes to get a moratorium on resource development and until the completion of an environmental-impact study. Chief Bernie Metecheah said "we want to put everything on hold for now ... and we want the government to listen to our concerns."

B.C. Energy Minister Richard Neufeld pledged the resolve the confrontation, saying it was a "big issue" for the recently-elected government which is anxious to promote a new investment climate in the province.

But he expressed concern that Petro-Canada was given permission in June to build a 12-mile pipeline after consulting with the Halfway tribe and agreeing to reroute the system away from hunting camps. Petro-Canada has a dozen wells in the affected area producing about 11.5 million cubic feet per day and wants to add three more wells with a combined output of 10 million cubic feet per day.

Other aboriginal leaders in the Treaty 8 region say it's only a matter of time before similar moves are made against other gas exporters and producers.

David Luff, vice-president of the Canadian Association of Petroleum Producers, urged the B.C. government to waste no time in finding a solution. "This is a critical issue," he said. "We require clarity and predictability and access to the resource and the First Nations issue must be resolved as quickly as possible so that we can proceed with our activity this winter."

At stake is the Ladyfern area, where a wave of discoveries in the past year by Murphy Oil, Apache, Alberta Energy Company and Canadian Natural Resources has added 600 million cubic feet per day to Canada's gas production.

Lana Garbitt, a councillor with the Saulteau River First Nation, said the Natives demand "mutual respect and understanding, proper consultation, and we want our treaty and aboriginal rights protected." She said the First Nations have received no monetary benefits from resource development because issues such as co-management and resource-sharing remain unresolved.

Jeff Rath, an attorney for the Doig River First Nation, accused the industry of "basically destroying the whole area" and causing a confrontation that will have a "profound effect on the certainty of tenure of the oil and gas industry."

BP plans fuel cell project at Nikiski gas-to-liquids facility

BP Exploration (Alaska) Inc. said in a statement today that a “state-of-the-art power generation system designed to increase electrical efficiency and reduce emissions” will be installed at BP's gas-to-liquids test facility” in Nikiski.

The Siemens Westinghouse "solid oxide fuel cell" unit that will convert natural gas directly into electricity through an electrochemical process similar to that used in a battery.

BP said that the technology, which is not yet commercially viable, could have “far-reaching implications for power generation in remote areas like villages in rural Alaska … (and) offshore oil and gas platforms.”

The project is expected to cost about $6.5 million and begin operating by mid-2003.

Using natural gas as feedstock, BP said its Nikiski fuel cell project will generate 250 kilowatts of electricity - roughly the consumption of 50 average homes - and power the warehouse and administration building at the GTL facility.

The fuel cell will be connected to the local electrical grid operated by Homer Electric Association to study operating characteristics and costs. Homer Electric and Chugach Electric will share operating information.

BP's $86 million GTL demonstration plant is expected to begin operating in the first half of 2002.

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