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An aerial view of Fort McKay, Alta., Monday, Sept. 19, 2011. The First Nation has worked with government and industry for 20 years to develop an access management plan for an area around Moose Lake, 65 kilometres northwest of Fort McMurray.Jeff McIntosh/The Canadian Press

Alberta’s United Conservative government will spend the next three months working with the Fort McKay First Nation to finalize a land preservation plan for a northern lake, clouding the future of a long-delayed oil sands project in the region.

The First Nation has worked with government and industry for 20 years to develop an access management plan for an area around Moose Lake, 65 kilometres northwest of Fort McMurray, which would allow responsible oil and forestry development while protecting the nation’s treaty rights. On Friday, officials from the province and oil sector gathered to go over the final draft.

With a finish line now in sight, Chief Mel Grandjamb emerged from the meeting feeling victorious.

“We feel positive, we feel optimistic. The time has come to sit down at the table and hammer this out,” he told The Globe and Mail.

Fort McKay First Nation is surrounded by oil sands developments. It operates a dozen businesses that serve the industry and employ more than 1,400 people, generating $500-million in revenue in 2018.

Part of the Moose Lake management plan, which requires provincial certification, includes a 10-km buffer zone around the lake. But some of that area has been earmarked for the Rigel oil sands project proposed by Prosper Petroleum Ltd. that was approved by the Alberta Energy Regulator (AER) in June, 2018.

The First Nation wants Prosper to move the proposed crude processing plant outside the buffer. It appealed the AER’s approval of the project, arguing the regulator should never have given Rigel the green light while the Moose Lake plan was under development. Prosper counters that relocating the project would increase overall environmental effects and likely eliminate the project’s financial viability.

Friday’s development comes less than two weeks before the Alberta Court of Queen’s Bench hears a separate case in which Prosper has taken the provincial government to court to try to force cabinet’s hand on final approval of the Rigel project.

In court on Jan. 14, Prosper argued that 19 months of waiting for an Order in Council put it in dire financial straits.

Brad Gardiner, Prosper’s chief executive, has criticized Premier Jason Kenney’s government for demanding that Ottawa expedite approvals for major projects such as the Trans Mountain pipeline expansion and Teck Resources Ltd.’s Frontier oil sands project, while stalling his company’s proposal.

Justice Barbara Romaine adjourned Prosper’s case to Feb. 12 and, on Friday, Prosper said in a statement it was “very frustrated” with yet more delays caused by the three-month consultancy period on the land-use agreement.

It also criticized the provincial government for negotiating the timeline “without any notice or consultation with industry,” which it said leaves Prosper with no time to secure financing or commence construction as planned next winter.

"This further delay would seriously threaten the viability of both the Rigel Project and Prosper,” it said.

As for the next steps on the Moose Lake plan, Mr. Grandjamb said the First Nation will hold monthly meetings and weekly working sessions with the province “to ensure a high level of collaboration.”

“It’s important to my community that we’re able to retain our culture and pass it on to future generations. We’re taking the lead on ensuring the Moose Lake plan is approved so we can adequately address responsible development,” he said.

As the world works to address climate change, Mr. Grandjamb said he is confident development in the region will meet sustainability goals and emissions targets.

Alberta Environment Minister Jason Nixon said in a statement his government is encouraged by progress the community and government have made to date.

“It’s time we finalize a plan that balances the area’s complex needs and opportunities,” he said.

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