The Lubicon Lake First Nation in northwestern Alberta is considering a court fight and even a campaign directed at shareholders of oil companies looking to drill a test well near claimed lands.
The Alberta Energy and Utilities Board (EUB) recently denied a Lubicon request to assess an application to drill near the disputed territory. The Lubicons are seeking to have the application treated not as a one-well case but rather a broader project of hundreds of wells that the companies have indicated they hope to eventually carry out.
A senior oil and gas industry official says relations between the sector and First Nations groups have improved greatly in recent years, but concedes more work must be done to forge stronger ties between the two sides.
"I think there are still uncertainties around the expectations of First Nations for both the industry and the Crown," says David Price, vice-president of Western Canada for the Canadian Association of Petroleum Producers (CAPP).
While unable to comment specifically on the Lubicon case, Price says much progress has been made to better relations between Aboriginals and industry.
"I think the challenge for the First Nations is to build the capacity around being consulted, and we're looking for that capacity so that when we go out in the field, we've got people to talk to."
The Lubicon band is still studying its next move, but says it could include legal action or a campaign directed at shareholders to let them know their investments could be at risk.
"These companies, most of them are relatively small and one of the things they're very dependent on is investment, and for every well they drill they have to find more investors," says Kevin Thomas, spokesman for the Lubicon.
Surge Global Energy, the well operator, did not respond to requests for an interview prior to press time. The other partners in the well are Edmonton's Deep Well Oil and Gas Inc., Calgary-based Pan Orient Energy Ltd. and Vancouver's Paradigm Oil and Gas Inc.
However, Deep Well announced last week that Surge defaulted on the terms of the agreement when it failed to spud the test well by Sept. 25.
Deep Well president and CEO Horst Schmid - a former Alberta MLA and cabinet minister during the 1980s and early 1990s - says this latest development does not necessarily mean the test well will be cancelled. "That's something we have to have our lawyer interpret."
Deep Well and its subsidiary, Northern Alberta Oil, hold an 80-per-cent working interest in 63 sections of oilsands leases in the Sawn Lake area, near the Lubicon's claimed traditional lands about 450 kilometres northwest of Edmonton.
The 500-member Lubicon band has been pressing for 66 years to resolve a 246-sq.-km land claim that would provide them with a reserve, compensation and self-government.
CAPP, which has drafted guidelines for working with communities such as First Nations, says it is vital to begin the consultation process early and to take seriously the community's concerns.
Price notes there are practical reasons for proceeding this way. Relationships must be forged so that when problems arise, the communities contact the company before putting a call in to the regulators. And the oil company must consider cultivating a potential workforce.
"It's far easier to hire and maintain staff locally than it is to have to import staff to areas," he says. "We are facing a crunch in labour resources and First Nations communities represent a good opportunity in that regard."
Lubicon spokesman Thomas says if the band had its choice, oil and gas activity would be halted until the land-rights issue was settled. However, he acknowledges that "we can't take on every single oil company in the province," so instead are focusing on protecting "vital interests" such as water.
Some companies have acted in better faith that others, says Thomas. Storm Exploration, for example, has regularly met with the Lubicon as it developed resources plays in the heart of the claimed land.
"They would meet regularly with the Lubicon, they'd discuss what the Lubicon wanted done and they'd accept it when the Lubicon said, 'No you can't do that here.'" According to the Lubicon, Surge and its partners only agreed to meet this past July, almost one year after the band first learned of their intentions to operate in the area and about four months after work began to clear the wellsite. Thomas says that in the July meeting, the company's representatives stated they would not proceed with the application without notifying the Aboriginal group.
He adds that a week later, the companies went to the EUB saying they'd secured the band's blessing, something the Lubicon say is untrue.
Deep Well's Schmid declined to address specific Lubicon concerns, but said: "We will do our best to work with Aboriginal peoples.”
In the Lubicon case, he added, "their land claims are quite a ways away from the Deep Well Oil and Gas lands."
Thomas concedes that the well lies outside the area that will one day likely become the Lubicon reserve, but says some of the parcels fall within a buffer zone that rests against the proposed reserve boundary.
This past summer, Lubicon Chief Bernard Ominayak wrote a letter to the EUB urging it not to grant Surge's exploratory well without an assessment of the overall impact of the entire plan. In the letter, he cited the companies' failure to engage the Lubicon in a dialogue.
An EUB spokesman says what usually occurs in such cases is that the affected party can raise concerns on "fairly generic" issues such as health effects, environmental effects, safety concerns or socioeconomic effects.
"In this particular case," says EUB spokesman Bob Curran, "They said, 'This is a several-hundred well program and you have to assess it based on that.' All we have is a company that wants to drill an evaluation well, which is a tool that gives them information to see whether they want to proceed with the development."
Curran notes the board can only look at how the land is currently classified, and adds that land claims "fall well outside our jurisdiction."
But a research associate with the University of Calgary's Canadian Institute of Resources Law says the board's mandate need not be so black and white.
Monique Passelac-Ross says the board can insist a company do its utmost to consult with an affected community.
"It is the EUB that usually enforces those informal arrangements and the EUB will usually expect the companies to do those things," she says. "To pretend that this is Crown land and that's the end of the issue is just hypocritical."
Passelac-Ross, a specialist in resource law and treaty rights, says the Lubicon case underscores the need to resolve outstanding land claims. She calls the federal government "negligent" because it has failed to abide by the promises it made.
(John Ludwick can be reached at firstname.lastname@example.org)