While a breakthrough in aboriginal relations is about to dismantle a long-standing political obstacle to natural gas production and pipeline development in the Northwest Territories, the Canadian government and the industry stand warned that the problem of accessing native territory and rights could escalate.

Canadian Indian Affairs and Northern Development Minister Robert Nault said a land claim agreement is at hand with the last holdout among the territorial First Nations, the Deh Cho. But as negotiators wrapped up 30 years of work on settling issues that made a strong contribution to aborting the 1970s attempt to build a Mackenzie Valley gas pipeline, other natives warned that there is potential in the western provinces for projects to be disrupted no matter how well their corporate sponsors behave.

The Canadian government, rather than any company, is to blame, the National Energy Board (NEB) was told by natives in a case involving EnCana Corp. and a pipeline crossing of the boundary between British Columbia and Alberta.

The warning surfaced as the NEB approved a link called the Tupper South Gas Pipeline, between a production field developing in the BC region around Dawson Creek, the starting point of the Alaska Highway, and TransCanada PipeLines’ Nova grid in northern Alberta.

An aboriginal community in the area, Saulteau First Nations, fired off an irate statement to the NEB. The letter raised concerns that the Canadian Energy Pipeline Association has repeatedly raised in Ottawa over federal policy of delegating responsibility for dealing with native groups to industry.

The Saulteau said it had no objection to the EnCana project, because the new pipeline link did not all by itself pose a threat to treaty and aboriginal rights. The natives also said they felt that as much consultation as could be expected reasonably from a company was done.

“Notwithstanding,” said the letter, “this project represents a further incremental increase in the overall cumulative impact on this region, which will render Saulteau First Nations’ treaty and aboriginal rights meaningless over time. The federal Crown must undertake meaningful consultation and this consultation must address the cumulative impact on the rights, interests and way of life of Saultea First Nations.”

The aboriginal group predicted “it will be increasingly difficult for the NEB to approve projects based on the rationale that little or no infringement of First Nations’ treaty and aboriginal rights is occurring.” The Saulteau leadership “is prepared to work with the NEB and federal agencies to address this critical deficiency. However, it is also prepared to challenge future project reviews and approvals by the NEB and the Canadian Environmental Assessment Agency if this issue remains unredressed.”

The case illustrated the high stakes that can be involved in even apparently small supply projects in western Canada. Improved access to drilling targets ranks high on the priority list of the Canadian Association of Petroleum Producers, where president Pierre Alvarez rates the western resource endowment as still robust if the authorities keep promises to maintain a favorable political and regulatory environment.

The Tupper South connection is only a 5.4-kilometre (three-mile) leg of pipe that EnCana expects to lay in 25 days for C$1.25 million (US$835,000). Much of the gas program in the area is under “tight-hole,” confidential status because acquisition of drilling prospects is hotly competitive in northern BC. But EnCana disclosed that the link represents a lasting addition to output from a 50 square-mile area.

The new length of pipe will allow shut-in wells to be tapped and trigger new drilling, EnCana told the NEB. The Tupper development program is described as opening up access to gas from “numerous productive horizons,” with each well delivering recoverable reserves ranging from 250 MMcf to “several billion cubic feet.”

The friction with western natives has developed in the wake of Canadian court rulings that aboriginal communities must be consulted on development that affects traditional land-use areas as well as assigned treaty territory. Compliance with the rulings has fallen through bureaucratic cracks.

The NEB a year ago handed down guidelines that turned the consultation job over to the industry. The NEB said that as a quasi-judicial, court-like agency it could not become an advocate for either natives or corporations. Companies were given detailed instructions to identify aboriginal interests potentially affected by industrial activities, contact all concerned, explain their projects, keep records of issues raised and provide complete reports to the NEB. Companies are also required to canvass government agencies liable to have interests in aboriginal-relations aspects of projects.

In the Tupper South case, the report to the NEB included a catalogue of government authorities that refused to become involved on grounds that they had no mandate, no jurisdiction, too few resources or no time to take on the aboriginal consultation side of such a project. EnCana made overtures to the BC Department of Justice, the BC Oil and Gas Commission, the federal Department of Fisheries and Oceans, Indian and Northern Affairs Canada, Indian Affairs and Northern Development, Land and Water British Columbia and the BC Ministry of Energy.

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