Oil­sands project wins reg­u­la­tor ap­proval de­spite In­dige­nous ob­jec­tions

Edmonton Journal - - FINANCIAL POST - DAN HEAL­ING

A north­ern Alberta oil­sands project has been ap­proved by the Alberta En­ergy Reg­u­la­tor over the ob­jec­tions of lo­cal In­dige­nous peo­ple who say it will en­croach on sa­cred lands and poses a risk to their drink­ing wa­ter.

The 10,000-bar­rel-per-day steam-driven Rigel oil­sands project pro­posed by pri­vately held Pros­per Petroleum Ltd. of Cal­gary is in the pub­lic in­ter­est, the AER said in a de­ci­sion posted on its web­site.

Con­struc­tion is ex­pected to cost $390 mil­lion, with an ad­di­tional $50 mil­lion to be spent on drilling and com­plet­ing wells be­fore startup.

“Our plan is to start con­struc­tion in Q4 of this year and we be­lieve we can have it built and in op­er­a­tion in 2020,” said Pros­per CEO Brad Gar­diner.

The project is be­ing built with the sup­port of part­ner Petro­lama Na­mur Oil Sands En­ergy, a sub­sidiary of Czech Repub­lic-based Lama En­ergy Group, as its first in­vest­ment in the oil­sands, he said.

The Fort McKay Metis Com­mu­nity As­so­ci­a­tion board will meet to dis­cuss the de­ci­sion and to for­mu­late a response, said ex­ec­u­tive direc­tor Ed­di­son Lee-Johnson on Wed­nes­day.

“It’s close to a sa­cred place, Moose Lake, which the com­mu­nity has used for cen­turies and con­tin­ues to use and this project is def­i­nitely go­ing to af­fect that tra­di­tional and cul­tural use,” he said.

In hear­ings ear­lier this year, the Metis group and the Fort McKay First Na­tion told the three-mem­ber AER panel that they op­pose the devel­op­ment be­cause it would come as close as 1.5 kilo­me­tres to Moose Lake.

The panel wrote in its de­ci­sion that it ac­cepts that oil­sands devel­op­ment has raised fears of a loss of con­nec­tion with the land with Fort McKay res­i­dents. “The fear ex­pressed is gen­uine. What is miss­ing is ev­i­dence that the Rigel project it­self will cause a loss of con­nec­tion and re­la­tion­ship,” it wrote, ex­plain­ing that the op­er­at­ing Sun­shine Oil­sands project and ex­plo­ration projects by other com­pa­nies are also nearby.

So­cial and eco­nomic is­sues and po­ten­tial im­pacts on In­dige­nous and treaty rights were con­sid­ered in its de­ci­sion, the AER says in the de­ci­sion.

How­ever, it added it could not con­sider whether gov­ern­ment con­sul­ta­tion was ad­e­quate. Nor could it ac­count for a pro­vin­cial pro­posal to cre­ate an ac­cess man­age­ment plan for the Moose Lake area be­cause that plan hasn’t been im­ple­mented.

Pros­per Petroleum, for its part, is com­mit­ted to ad­dress its neigh­bours’ con­cerns, Gar­diner said.

“We have tried to de­sign our project to min­i­mize im­pact and their abil­ity to prac­tise tra­di­tional rights and we will con­tinue to work with them as we go for­ward with the project,” he said.

Cana­dian oil­sands pro­duc­tion is ex­pected to rise by 58 per cent rise to 4.2 mil­lion bar­rels per day by 2035, the Cana­dian As­so­ci­a­tion of Petroleum Pro­duc­ers said in its an­nual fore­cast re­leased Tues­day.

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