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Aboriginal claims target Alberta oil fields; conflict could impact investment Contractors face blockades as Native leaders demand compensation for use of land Gary Park PNA Canadian Correspondent
Almost out of sight and hearing, a conflict has been building in northern Alberta that could threaten new oil and natural gas investment throughout the province.
For several months, aboriginal groups have been erecting blockades north of Lesser Slave Lake to support their demands for 10 percent of the value of construction work on what they regard as “traditional” lands.
The lands were turned over to the Canadian government under Treaty 8, that was signed in 1899 and spelled out in precise detail the benefits that Indian tribes were to receive.
The treaty gives the government the right to open the traditional lands to resource development, such as mining and forestry, but makes no mention of oil that wasn’t discovered in Alberta until 1914.
Gordon Auger, chief of the Bigstone Cree Nation, told reporters last month that his ancestors never intended to sign over subterranean rights and that his tribe and others still claim sovereignty over traditional lands.
He said the 10 percent fee is purely an administration charge. Billions in royalties could be at risk To date the dispute is confined to smaller contractors and the fees run only to tens of thousands of dollars.
But the fear within the petroleum industry is that a precedent could be set that threatens billions of dollars of oil and gas royalties.
David Chatters, a Member of Parliament for the region, described the situation as “huge and volatile” and said that it has already involved threats and extortion.
He said many non-aboriginal contractors are facing bankruptcy and the potential for violence is real.
The tension carries echoes of similar blockades by three Indian bands in northeastern British Columbia in 2001 that virtually shut down activity in a hotbed of oil and gas exploration.
Those three bands are also members of the Treaty 8 First Nations that stretches into northern Alberta.
They finally signed a five-year agreement with the British Columbia government that sets out application review time frames for new oil and gas developments and a fee structure for services provided by the Native communities. Schedule of fees proposed Four years ago, Indian chiefs in northern Alberta proposed a schedule of fees to cover exploration and development of traditional lands — C$3,000 per well site, plus C$500 per additional wellhead on multi-well pad sites.
Tensions eased with a ground-breaking pact assuring aboriginals of better opportunities to gain jobs, training and contracts in return for access by oil companies to government land.
In Alberta, a committee has been established by the province’s Aboriginal Affairs and Northern Development Minister Pearl Colahasen to seek a solution to the current dispute.
In a February letter to a newly formed Northern Oilfield Contractors Association, Colahasen confirmed that contractors with leases and permits have the right to work on government land without interference and suggested that any illegal demands by aboriginals should be referred to the Royal Canadian Mounted Policy.
She said the government will work with industry and aboriginals to improve the understanding of government policy.
“We will strive for clarity and consultation, not confrontation,” the letter said.
Impact on contractors The impact of the demands and blockades has already had an impact on contractors. For instance, Sequin Construction (1979) Ltd. has slashed its staff to 22 from 120 in 1998.
But a spokesman for the contractors association said his member companies are reluctant to involve the police on alleged extortion demands. He said court action would only be a last resort.
What makes the industry uneasy is a claim by Auger that First Nations believe that the disagreement is just the beginning of a struggle to reassert control over traditional lands, where Natives have hunting and fishing rights.
Because others make a fortune from that land, he said the aboriginals should be entitled to an automatic 10 percent ownership of oil and gas wells.
The Canadian Association of Petroleum Producers has warned that unless there is a resolution the dispute could spread over a wider area. If the industry is forced to pay compensation out of its own pocket, the economics of such major projects as multi-billion dollar oil sands ventures could be jeopardized, producers association said.
Other flash-points have also surfaced, prompting the Canadian Energy Pipeline Association to warn a conference of energy ministers last fall that it could see no end to aboriginal frustration unless governments acted on court rulings and consulted with First Nations on projects.
It took an 11th-hour agreement to rescue a C$270 million natural gas pipeline expansion in British Columbia by Duke Energy Gas Transmission Canada.
Until then, the National Energy was faced with holding a special hearing to determine whether the Duke project would be stalled until aboriginal claims were settled, a potentially drawn-out court action.
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