Alberta First Nation loses lawsuit over B.C. oil and gas rights sales

VANCOUVER – Members of an Alberta First Nation lost their bid to stop the sale of oil and gas tenure in neighbouring British Columbia, but they did win recognition from the judge that they must be consulted.

The Dene Tha filed the lawsuit against the B.C. Ministry of Energy and Mines, Nexen Inc., Penn West Petroleum Ltd., and Vero Energy Inc., claiming the band was not adequately consulted on the B.C. government’s sale of subsurface exploration rights on 21 parcels of land three years ago, most for shale gas “fracking” development in northeastern B.C.

In his written ruling, B.C. Supreme Court Justice Christopher Grauer found the band was properly consulted on the sale, so far. The process is ongoing and consultation continues, he noted.

“I have concluded that the process in which the Crown has engaged to date complies with these guidelines in so far as the June 2010 dispositions are concerned,” he wrote in the judgment posted Tuesday.

“But the appropriate depth of consultation will likely become greater, not lesser, as the process continues, as existing parcels proceed into development and further parcels are sought for disposition.”

Of the 21 tenure parcels sold for almost $405 million, three were petroleum and natural gas leases and the remainder were drilling licences. Tenure grants the holders exclusive rights to explore or produce petroleum or natural gas, but the tenure holders have yet to apply to the provincial oil and gas commission for approval of proposed activities.

In a letter quoted in the judgment, Dene Tha’ Chief James Ahnassay wrote to the B.C. aboriginal affairs minister in August 2009 saying his band was not anti-development.

But the government approach of dealing with each project separately means the cumulative effects on the area are not taken into account, he said.

“Our traditional territory is already covered by significant numbers of oil and gas producing wells, oil sands projects, many kilometres of seismic lines and pipelines, forestry and many kilometres of roads associated with such activity,” Ahnassay wrote.

“We continue to be inundated with new applications for forestry, oil and gas and other industrial activities every year.”

Lawyers for the band argued that the exploration and development activities across the provincial boundary affected their traditional activities such as hunting and fishing but Grauer found that was not probable.

The judge noted that the B.C. government provided the First Nation with $450,000 annually to fund its review of oil and gas referrals. He also noted that the province deferred sale of 31 other parcels of land due to concerns expressed by the Dene Tha’, and all 31 remain in a state of deferral and that will not change without further consultation with the band.

The Dene Tha’ are covered by Treaty 8, unlike B.C. First Nations that never signed agreements with the Crown, Grauer noted in his ruling.

He said some concerns of the band are common to all British Columbians and are being addressed outside the consultation process.

Shale gas and other non-conventional gas development is a priority for the B.C. government, which envisions a trillion-dollar liquefied natural gas industry exporting the product to Asia.

The Crown has met the standard of consultation to date, the judge said.

“That is not to say that I doubt the force of the (Dene Tha’) concerns,” Grauer wrote. “Ultimately, if the development of shale gas. . .is to continue and grow, the scope of the process of consultation and, if warranted, accommodation, will likely broaden.”