Feds to study oil and gas potential on First Nation lands

Feds to study oil and gas potential on First Nation lands by James Munson, November 23, 2012, ipolitics
A branch of Aboriginal Affairs and Northern Development is commissioning a study on potential oil and gas production on First Nations lands in Western Canada. The winning contractors will fan out across British Columbia, Alberta and Saskatchewan to find future production sites on land belonging to nearly 60 First Nations where no drilling currently takes place. The study is necessary because new reserve lands have been granted to First Nations and advances in technology such as hydraulic fracturing, or fracking, have been made since the last time the federal government collected this kind of data, said Kelsy Uhryn, acting general manager of production division at Indian Oil and Gas, a branch of AAND. “It is something that we do routinely for First Nations with oil and gas production, not so often for First Nation that don’t have production,” said Uhryn, speaking from Indian Oil and Gas’ offices in Calgary. “So this study is focusing on those that don’t have oil and gas production – that only have potential, and it was time for an update.”

Indian Oil and Gas is a stand-alone regulator for any First Nation reserve looking to produce oil from their lands, and it decided to do the study on its own without direction from the rest of AAND or its minister, said Uhryn. While the body does not do advocacy work, it seeks to have up-to-date information on potential petroleum reserves if a company approaches a First Nation or if the First Nation’s government seeks to develop a resource on its own, said Uhryn. The information on speculative oil reserves are shared with First Nations, policy-makers and the private sector, she said. Since few Aboriginals live under the reserve system north of 60, and because Canada’s largest oil reserves are under the Western sedimentary basin, Indian Oil and Gas’ work is focused in the West.

Also, extraction methods like fracking, horizontal drilling and gaining better access to shale resources have made big advances in the last half-decade, opening up a potential money-maker where none had previously existed.
“With new oil and gas technology, (the classification for First Nations) may be changed from poor potential for oil and gas production to good potential for oil and gas production,” said Uhryn. Oil is Canada’s biggest commodity export and the Harper government has made petroleum production a central part of its economic plan, deregulating environmental oversight in the past year to encourage the sector’s growth. First Nations – often situated in remote regions where resource extraction is one of the few viable economic engines – should benefit from the push to generate more commodities from Canada’s mineral bounty, Natural Resources Minister Joe Oliver has said. But that mantra is far from uniformly accepted among First Nations in Canada. Some First Nations are receptive to resource development following the resolution of political issues such as land claim negotiations and regulatory powers, including aboriginal groups along the proposed Mackenzie Valley oil pipeline corridor in the Northwest Territories. At best, First Nation’s interest in resources is best understood by looking at potential projects case-by-case. Along the same corridor Enbridge is having trouble building its Northern Gateway pipeline in British Columbia due to First Nation opposition, aboriginals have jumped on board the construction of a natural gas pipeline.

In July, the Canadian Council of Chief Executives published a report urging a bigger role from First Nations in the extractive sector. As for who holds the rights to petroleum reserves, its held in trust by Ottawa but First Nations can receive royalties under a regime managed by Indian Oil and Gas. Other First Nations may have a unique situation that depends on their treaty and land claim situation with their respective province and the federal government. “In some provinces, you have to go look right at the documentation for that reserve, the historical documentation to figure that out,” said Uhryn. As of last week, 18 companies had applied to perform the study. The call for bids ends on December 17. [Emphasis added]

[Refer also to: Harper launches major First Nations Termination Plan: As negotiating tables legitimize Canada’s Colonialism ]

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