First Nations ramp up sands dispute

Growing tensions between aboriginal communities and the Canadian and Alberta governments are facing a showdown that could see development of northern Alberta’s oil sands region tied up indefinitely in legal and civil action.

The aboriginal campaign to gain public attention started down a different path Jan. 12 when Canadian singer-songwriter Neil Young held the first of four fund-raising concerts across Canada.

That will be followed on Jan. 23 and 24 when the Fort McKay First Nation hosts a conference to air concerns about environmental impacts, industry practices and the failure to resolve treaty and aboriginal rights.

Fort McKay is seeking permission from the Alberta Court of Appeal to challenge the Alberta Energy Regulator’s, AER, approval of the Dover Commercial Project by Athabasca Oil Corp., AOC.

Dover and the nearby McKay River Commercial Project will be operated by Brion Energy, a partnership of AOC and Phoenix Energy, wholly-\ owned by PetroChina, with Dover scheduled to grow in four phases over the 2015-22 period to 150,000 barrels per day and ultimately reach 250,000 bpd, while the McKay project is targeting an initial 150,000 bpd, aiming for 250,000 bpd.

Buffer zone requested

Separately, the Athabasca Chipewyan First Nations group in the northeastern corner of Alberta, which is organizing the Young concerts, is trying to block Shell Canada’s proposed 100,000 bpd expansion of its Jackpine mining operation.

In approving the Shell proposal, a Joint Review Panel of the AER and Environment Canada set 22 conditions — mostly tied to water usage, environmental protection and the rights of First Nations — that would extend to mining areas, related processing facilities, utilities and infrastructure.

A spokesman for the Athabasca Chipewyan community said publicity from the fund-raising drive will ensure the First Nations’ argument is heard by a wider audience and reinforce guarantees in the Canadian Constitution covering aboriginal rights to land and habitat and a mandatory duty-to-consult clause applying to developers and governments.

Stale Tungesvik, president of Statoil’s Canadian division, which may shift its focus from the oil sands to Newfoundland’s offshore, said the oil sands industry could play a leading role in raising education standards and providing training for skilled jobs to reduce chronic unemployment among aboriginals.

Constitutional issues

He said the essential steps include: Building trust, fostering inclusion, advancing reconciliation and setting up a tripartite energy working group of the federal and provincial governments and First Nations.

Chief Martin Louie, of British Columbia’s Yinka Dene Alliance, said the aboriginal community is facing a limited choice: Either go to court or erect roadblocks.

“It’s important to save whatever we have — the water and the land for our children,” he said.

The sense of urgency in the oil sands region is gathering pace, even at a time when the industry is unsure about its future, with two more large-scale projects rolled out in the last month.

Imperial Oil has filed a regulatory application for its C$7 billion Aspen project to produce 135,000 barrels per day by using solvents for a thermal recovery operation to recover about 1.1 billion barrels of bitumen.

To allow time to introduce the technology and carefully allocate capital, Imperial expects to proceed in three phases of 45,000 bpd each, bringing the first onstream by about 2020 and counting on a 40-year lifespan. A final investment decision is expected in 2017.

Husky Energy has announced plans to build two projects of 10,000 bpd each in the Lloydminster area of Saskatchewan, using steam to extract the heavy crude.

The company said it expects its overall thermal operations will yield 55,000 bpd by 2016, a year earlier than its original goal.

—Gary Park