Despite a regional pocket of persistent resistance, Canadian producers keep on expanding their northern frontier of natural gas development by connecting newly-discovered reserves to the pipeline grid. While a small Indian band continued to hold up the action last week in a 50,000-square-mile area of northeastern British Columbia, the industry moved to add an entirely new supply area in the southern Northwest Territories.

In B.C., Westcoast Energy and Anadarko Petroleum joined Petro-Canada in voluntarily suspending work in order to try ironing out a new understanding with Halfway River First Nation, which has confronted the industry and the provincial and federal governments with a wish list ranging from scholarships for job-training schemes to fences around industry installations to keep wildlife away. Westcoast postponed starting construction on a 100 MMcf/d capacity expansion that the National Energy Board earlier approved for its Pine River complex near Fort St. John. Anadarko postponed a seismic survey intended as a preliminary for a winter drilling program with an undisclosed number of gas wells described as significant. Petro-Canada earlier suspended production testing of a well in the area.

While heightened industry activity has aroused rising interest in obtaining the most from it among the population of the Canadian North, disputes remain rare and have not affected the biggest discovery of the past two winter drilling seasons. Titled Ladyfern, it continues to expand, with Murphy Canada, Apache Canada, Alberta Energy Co. and Canadian Natural Resources producing about 450 MMcf/d, projecting capacity of the new field at more than 1.3 Bcf/d and proposing a second pipeline to make sure the growth happens in early 2002.

Next on the industry agenda comes an area of the southwestern Northwest Territories known as Cameron Hills. Paramount Resources filed with the NEB for a short pipeline connection across the Alberta boundary to the mainstream gas and oil transportation and processing grid. Paramount estimates gas reserves uncovered by drilling in the area at more than 100 Bcf, a level it considers the threshold for building a connection. The plan calls for initial daily production of 25 MMcf of gas and 1,000 bbl of oil.

As in much of northeastern B.C., the Cameron Hills development is a modest commitment compared to the Arctic megaprojects under consideration by Alaskan and Mackenzie Delta-Beaufort Sea producer and pipeline groups. But the one-step-at-a-time expansions on the southern fringe of the northern gas frontier highlight its requirements for big investments of patience and diplomacy in community relations.

The Cameron Hills border-crossing project only involves a nine-mile stretch of pipe expected to cost just C$3.6 million (US$2.4 million), provided it can be built when muskeg swamps are frozen and the work becomes relatively easy during the coming winter. But public consultation with the diverse native, trapper, hunter and settler population of the region has been under way since May of 2000. Paramount realistically reports a “generally favourable” response, knowing no one can count on achieving permanent consensus among the varied, often ruggedly individualistic and sometimes conflicting interests in the Canadian North.

The B.C. case stands out as a reminder that northern community relations is an enterprise in continuously mending fences. Like its larger peers in a regional confederation known as the Treaty Eight First Nations, the Halfway River band in the late 1990s negotiated a memorandum of understanding on policing gas-industry expansion with the B.C. Oil and Gas Commission. The deals give the aboriginal communities rights to review applications for industry activity from seismic surveys through drilling to pipeline construction, and to request changes prior to commission proceedings. Also provided are financial and technical resources to get the job done.

In the Halfway River case, the community has not torn up the agreement. Instead, a rush of three dozen industry applications for the area, reflecting rising Canadian gas activity across northern regions, has led to questions locally about whether now is the time to stop dealing with projects on a case-by-case basis and call a wider review of environmental and socio-economic effects plus community compensation. Discussions continue, both between the companies and the native band and with industry sources saying efforts are also under way to work out a common front within the Canadian Association of Petroleum Producers rather than make member companies do separate deals believed by some to cause steady escalation of community demands.

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